Industrial REIT Switches CEOs, Looks To Sell Assets

Rexford Industrial Realty has named a new CEO for the first time since it became a REIT and launched a portfolio recalibration following discussions with an activist investor. 

The Los Angeles-based company with a focus on small-format Southern California warehouses announced Wednesday that its chief operating officer, Laura Clark, will become CEO starting in April. Clark joined Rexford as chief financial officer in 2020 and has been its COO since last year. 

She will replace co-CEOs Michael Frankel and Howard Schwimmer, who had been in the roles since the company morphed into a REIT in 2013. They will continue to serve on the board of directors until their terms expire next year.

Rexford also announced Wednesday that it will reevaluate its holdings and future development projects, a process that includes evaluating asset sales.

The moves come after activist investor Elliott Investment Management took an undisclosed stake in Rexford in August. Rexford said the leadership and strategy moves announced Wednesday come after “constructive engagement” with the new partner.

Elliott partner Marc Steinberg commended the actions. 

“As one of the Company's largest investors, we believe these bold actions position Rexford Industrial well for this next stage in its evolution,” he said in a statement, adding that Elliot believes the company “is on a trajectory to deliver significant long-term value for shareholders.”

For its development pipeline, the REIT said it is prioritizing “the highest-return opportunities that meet rigorous return thresholds,” which means selling assets or delaying development on projects that don’t meet that criteria.

It is also evaluating sales of existing assets that are either underperforming or “fully valued” to redirect those gains into “opportunities with higher risk-adjusted returns.”

“Our near-term priority is maximizing returns through a programmatic disposition strategy that strengthens the quality of our future cash flows and recycles capital into high-yielding repositioning projects and share repurchases,” Clark said in a statement. 

“Furthermore, future repositioning and development projects, and acquisitions are being reevaluated through revamped, rigorous underwriting criteria to ensure these opportunities align with our current cost of capital and market dynamics,” she added.