Laura Clark: Yes. On a cash basis, and we’re happy to provide the cash mark-to-market. We do feel like the net effect of mark-to-market is much more helpful. It certainly captures the significant embedded rent steps that we’re achieving on our leases. But that being said, the cash mark-to-market is 38% today. That’s down from 43% in the prior quarter as a similar change that we saw from our net effective mark-to-market. It was impacted by about 200 basis points from the conversion of the mark-to-market in the fourth quarter of leases that we signed about 200 basis points from rent steps and about 100 basis points from those properties moving under repositioning.
Operator: Our next question comes from the line of Greg McGinniss with Scotiabank.
Greg McGinniss: So I know you may be tired of answering the question, but just to expand on Craig’s point, that $0.34 that was originally disclosed was that the expected contribution to 2024 or the expected run rate contribution by year-end?
Laura Clark: It was not a run rate. But I think let’s go back to mark-to-market really quick. And one of the reasons that — and I think that One of the reasons that we decided to take out that [indiscernible] is because our mark-to-market changes every single day. Mark-to-market is a point in time, and it’s based on the leasing that we’re doing. So in the fourth quarter, we — in the fourth quarter, we marked the portfolio to market on a daily basis, some of those releases that were expiring this year, some of those releases that were expiring in 2024 and some even in 2025. So I think it’s really pretty important to really work holistically the portfolio mark to market and provides transparency into what we expect to achieve for marking the portfolio to market as Leslie’s role.
Greg McGinniss: Okay. Could you just walk us through the expected cadence of occupancy levels through this year? — that get us to the guidance range and while we’re not looking for future guidance, whether this overall downward trend is expected to continue in 2025.
Laura Clark: We are not providing 2025 occupancy guidance. In terms of the cadence of guidance, we don’t provide the cadence of occupancy guidance on a quarterly basis. We provide you with the average occupancy number can allow you to appropriately model occupancy and those impacts through the year.
Greg McGinniss: Okay. Maybe just one follow-up here. Regarding the 1.5-months of concessions that are currently being offered in leases, I understand that’s in line with pre-COVID levels. Have concessions ever gone above that level? And what is the risk of seeing concessions increase from here.
Michael Frankel: I would say that on average, we have generally not seen levels rise above that. There are exceptional moments in time, for instance, during the great financial crisis, which obviously we don’t really see anything of that nature on the horizon today. And those — those are very consistent levels during the probably many, many years, pre-COVID and oftentimes, we beat that on a submarket basis or a certain size product type, but it’s probably a very reasonable assumption.
Howard Schwimmer: But I think if we think about different product and market — submarkets and what competition could be out there, on a case-by-case basis, you’ll see a lot of variability perhaps and Michael mentioned an example earlier about what’s happening in the Inland Empire on some of those larger buildings probably would see a little bit more concession on those, whereas the majority of the infill markets, you would.
Greg McGinniss: All right. So we take 1.5-months as an average then, right?
Michael Frankel: That’s a good indicator.
Operator: Our next question comes from the line of Nick Thillman with Baird.
Nick Thillman: Can you start with Howard or Michael, but maybe wanted a little update on the transaction market and kind of what you’re seeing, you’re seeing like more competition in the market, larger institutions looking to buy? And do you see that as an ability to maybe recycle some more assets that you view as like non-core.
Michael Frankel: Thanks so much for joining us today. Just briefly, I’d say, and Howard could add if he adds some more color. But generally speaking, the transaction market really hasn’t seen much change probably over the last six months or so. I think — and maybe the higher interest rate environment a contributor or just some general uncertainty out there, which is good news for Rexford, quite frankly. It means that buyer competition is somewhat moderated, generally speaking, and we continue to find great opportunities as a buyer. So I would say no big change in the transaction environment. With regard to dispositions, that also can have an impact because if buyer competition is low, it means there might just be generally speaking, fewer buyers in the market to take a little longer on the [indiscernible] activity, although we do have a recycling program in place, we have assets that we intend to market for sale and our marketing for sale this year.
So we’ll see where that goes. But we’re going to continue to use our best judgment in terms of how and when we transact on those.
Nick Thillman: That’s helpful. And then maybe a couple of quick ones for Laura. Of this mark-to-market, is that still only 80% of the square footage just being represented in that statistic?
Laura Clark: Yes, that’s about right.
Nick Thillman: Okay. And then the other 1 is just on the bridge from the prior presentation to what you quoted on net effective spreads for 2024, I think the prior presentation said 67% now you’re quoting around like 60%. Is that just based on activity that’s happened in the past?
Laura Clark: Yes, that’s correct. We saw flat market. We saw flat market rent growth in the quarter. So that’s a good assumption.
Operator: Our next question comes from the line of Vikram Malhotra with Mizuho.
Vikram Malhotra: Laura, I guess just you — or Michael, you’ve given sort of a broader three year outlook on FFO growth the next two years, I think you said 14 — 17 annually. I’m wondering in the last few presentations, you usually give like a two year or a multiyear same store growth since you’ve given us FFO, do you mind giving us sort of a broad kind of multiyear same store growth? Just where are you thinking things will shake out?
