Greetings, and welcome to Rexford Industrial Realty Fourth Quarter and Full Year 2020 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during this conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to David Lanzer, General Counsel. Thank you. You may begin.
We thank you for joining us for Rexford Industrial's fourth quarter earnings call. In addition to the press release distributed yesterday after market close, we posted the supplemental package in the investor relations section on our website at www.rexfordindustrial.com. On today's call, management's remarks and the answers to your questions contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements address matters that are subject to risks and uncertainties that may cause actual results to differ from those discussed today. For more information about these risk factors, we encourage you to review our 10-K and our other SEC filings. Rexford Industrial assumes no obligation to update any forward-looking statements in the future. In addition, certain financial information presented on this call represents non-GAAP financial measures.
Our earnings release and supplemental package present GAAP reconciliations and an explanation of why such non-GAAP financial measures are useful to investors. Today's conference call is hosted by Rexford Industrial's Co-Chief Executive Officers, Michael Frankel and Howard Schwimmer, together with Chief Financial Officer, Laura Clark, and myself, David Lanzer, our General Counsel. We will make some prepared remarks, and then we will open the call for your questions. Now, I will turn the call over to Michael.
Thank you, and welcome to Rexford Industrial's fourth quarter 2020 earnings call. Most importantly, we hope you and your families are well and healthy. Today, I'll begin with a brief introduction. Howard will then cover our transaction activity, and Laura will discuss our financial results and outlook for 2021. We will then open the call for your questions. Although last year brought significant hardship within our communities and across the globe, our team at Rexford Industrial completed one of our most outstanding years on record, despite the pandemic. Our Rexford experience demonstrates the strength of our infill Southern California tenant base and of our entrepreneurial team. The team's 2020 performance speaks for itself. We achieved a record leasing volume of over 6.3 million square feet, with exceptional releasing spreads averaging about 20% cash and 30% on a GAAP basis.
Our investment volume of over $1.2 billion of acquisitions also set a new high watermark for the company, and combined with our strong internal growth, drove a 22.1% increase in core FFO, which grew 7.3% on a per share basis. A range of growth sectors drove incremental demand through 2020, from healthcare and consumer staples to aerospace and electric vehicles, among others. While a dramatic acceleration in e-commerce adoption pushed our infill tenant demand to unprecedented levels. When we consider these incremental demand drivers, combined with the fact that our infill Southern California industrial market serves the nation's largest zone of consumption and benefits from an incurable supply-demand imbalance, it is easy to understand why our infill market is positioned to outperform.
These factors, combined with our entrepreneurial business model, have enabled Rexford to generate sector leading total shareholder return of about 330% since our 2013 initial public offering, substantially exceeding the total shareholder return of any other publicly traded logistics REIT in America. Looking forward, we see continued strength. By way of indication, CBRE recently projected Greater Los Angeles County rental rate growth of 41% over the next five years, which equates to 7.1% average annual compounded rent growth for the next five years in Greater L.A. Meanwhile, by way of comparison, the same CBRE study projects 2.9% compounded annual rent growth for the nation's other major markets outside of Southern California over the same period. Rexford's future is bright.
We believe the company has never been better positioned with respect to the volume and quality of our internal and external growth opportunities. Although we've grown Rexford to become the third largest logistics REIT in the U.S. by market capitalization, we see substantial opportunity to creatively expand well beyond our current 1.7% market share within the [front infill] Southern California industrial market. We intend to maintain our low leverage investment grade balance sheet to fuel our growth, capitalize upon our deep proprietary acquisition pipeline. The company is also well positioned to further enhance our financial performance as we scale our business. Technology, data, and process improvement, increasing operating leverage and operating margins grow our portfolio into future years. Above all else, our extraordinary performance reflects our extraordinary team.
We'd like to express our deep thanks to the entire Rexford team for your resilience, determination, spirit in the face of unprecedented pandemic. With that, I'm very pleased to call on Howard.
Thanks, Michael, thank you everyone for joining us today. Looks like for the most throughout our infill Southern California industrial markets, though COVID-19 shutdowns continued through the fourth quarter. Vacancy decreased and demand remained strong, [driven by a variety within] our highly diversified economy and a dramatic increase in e-commerce activity. As a result, we continue to see organic growth and healthy net absorption. Our target market, which exclude the Inland Empire East, ended 2020 at historically low vacancy of 2.2%, a 40 basis point reduction quarter. By way of indication of the strength of our Southern California markets, our same property pool ended the year at ABR of $10.48 per square foot, representing an increase of 8% year-over-year.
During the fourth quarter, we completed over 1.8 million square feet of new and renewal leasing at spreads of about 30% on a GAAP basis and 18% on a cash basis. About 1/2 of these leases were early renewals for 2021 lease expirations. At year-end, we had approximately 4.8 million square feet of expirations remaining in 2021. The mark to market on these leases is approximately 17%, putting us in a strong position to grow NOI as we continue to address these expirations throughout the year. Turning to the external growth, during the fourth quarter, we completed 10 acquisitions totaling approximately $875 million, adding 17 properties and 3.4 million square feet to our portfolio. For the full year, we acquired $1.2 billion of properties, adding 5 million square feet to the portfolio.
Seven of these acquisitions included low coverage, outdoor storage sites and land for redevelopment totaling 36.7 acres, with improvements equating to 14% site coverage. Our investment activity truly demonstrates the unique strength of our operating platform. To begin with, about 75% of our 2020 investments were acquired through off-market or lightly marketed transactions, originated through our proprietary research-driven sourcing methods and deep market relationships. Additionally, we are capitalizing upon an historical generational shift in ownership as longtime owners increasingly age out of active management. Consequently, we've [seen an UPREIT transactions], which represented almost 30% of 2020 acquisitions. In these transactions, owners contribute their property to the company in exchange for ownership in Rexford, allowing a seller to achieve tremendous tax efficiency. Further, our value add repositioning and asset management expertise continues to deliver substantially better than institutional yields. Recent repositioning stabilizations demonstrate the value creation capability.
For the full year 2020, we stabilized 600,000 square feet of repositioning projects at a weighted average unlevered yield on total cost of 5.6%, which represents an approximately 150 basis point or greater premium to comparative cap rates on marketed transactions. We look ahead in 2021; we have approximately 700,000 sq ft currently under repositioning or redevelopment and another approximately 2 million square feet to start over the next 18 months. Given the strength of demand for highly functional industrial space and strong rent growth potential in our markets, we are optimistic superior value creation through timely lease up of projects delivering this year. Turning to dispositions, in 2020, we sold $45.5 million of properties, and we expect to continue to sell assets on an opportunistic basis to unlock value and recycle capital. Finally, we are well positioned with respect to 2021 acquisition opportunities.
Subsequent to year-end, we have closed on $95 million of investments, and we have approximately $280 million of new acquisitions under LOI or contract. This includes the recently announced $217 million transaction that we are targeting to close in the latter half of the year. Of course, this and all other acquisitions are subject to completion of due diligence and satisfaction of customary closing conditions, which are not guaranteed. We'll provide more details as transactions are completed. I'm pleased to now turn the call over to Laura.
Thank you, Howard. I'll begin today with details around our strong operating and financial results. For the full year, same property NOI growth came in ahead of projections at 3.7%, driven by strong stabilized same property occupancy, which ended the year at 98.2%. Consolidated NOI grew by over 24%, leading to core FFO per share growth of 7.3% or $1.32 per share, exceeding our guidance range. The continued strength of our tenant base also contributed to our outperformance as bad debt reserves came in better than expectations at 150 basis points of revenue for the full year. In the fourth quarter, stabilized same property NOI was up 2.5% on a GAAP basis and up 7.1% on a cash basis, primarily driven by strong collections of COVID related deferral billings.
Overall collections continue to be near pre-COVID levels as we collected 97.7% of contractual billings in the quarter, which includes 96% collection of deferral billings. As a reminder, during the year, we executed $4.7 million of total deferrals or 1.4% of revenue, averaging 1.5 months' rent. $900,000 remains to be collected in 2021, and based on our experience to date, we feel good about the probability of collection. With this strong performance, we are very pleased to announce that the board declared a dividend of $0.24 per share, representing an increase of 12%, demonstrating Rexford's continued commitment to delivering superior total shareholder returns. Turning now to our balance sheet and financing activities. Maintaining a best-in-class low leverage balance sheet while driving superior growth remains a fundamental focus at Rexford.
During the quarter, we demonstrated access to a diverse array of capital sources, funding our robust investment activity while maintaining our sector leading low leverage. At year-end, net debt to EBITDA was 4x, coming in at the low end of our target leverage range of 4x - 4.5x. In the quarter, we were pleased to secure additional investment-grade ratings from both Moody's and S&P, adding to our existing Fitch investment grade rating. In November, we successfully completed our inaugural public bond offering, raising $400 million of 10-year senior notes with a coupon of 2.125%. Proceeds were used to fund our investment activity and the repayment of our $100 million term loan that was due in early 2022. Also in November, we renewed our ATM program, upsizing our total capacity to $750 million and included the ability to issue shares on a forward basis.
During the quarter, we raised $35.6 million of equity through the ATM program at an average price of $50.13 per share. In December, we completed a secondary offering of 6.9 million shares of common stock, including the exercise of the underwriter's option at a net price of $47.15 per share, representing proceeds of $325.3 million. As of December 31st, we had approximately $176 million of cash on hand. We remain in a very strong liquidity position with no debt maturities until 2023, full availability on our $500 million revolver, and approximately $721 million available under our ATM program. Before we turn the call over for your questions, I'll provide an overview of our 2021 full year guidance. Company share of core FFO is expected to be in the range of $1.40 - $1.43 per share. This represents earnings growth on a per share basis of 6% - 8%.
It is important to note that consistent with our prior practice, our guidance does not include acquisition, disposition, or balance sheet activities that have not yet closed to date. Our core FFO guidance range is supported by several key factors. First, stabilized same property NOI growth of 3%-4% on a GAAP basis and 6%-7% on a cash basis. Next, average full year stabilized same property occupancy is expected to be in the range of 97%-97.5%. We expect G&A expense to be in the range of $44.5 million-$45.5 million. Approximately $17 million is related to non-cash equity compensation, which includes time-based and performance-based units that are tied to the company's overall performance. Finally, net interest expense guidance is $36 million-$36.5 million.
Complete details of our 2021 guidance can be found in our supplemental financial package, where we have also included a roll forward of the components of earnings per share growth. We hope you will find this additional detail helpful. This completes our prepared remarks, and we now welcome your questions. Operator?
Thank you. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. And for participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question is from Jamie Feldman with Bank of America. Please proceed.
Thank you. I guess just starting out, going back to the guidance you outlined, can you talk about your bad debt assumption in the 2021 same store outlook and in the FFO? Well, first I'll let you answer that, then I'll ask the next question.
Yeah. Hey Jamie, good afternoon. It's great to hear from you today. Our 2021 guidance implies a bad debt expense in the 125-150 basis point range for the full year. Roughly in line to slightly better than our 2020, which was 150 basis points for the full year. As you know, there's much uncertainty remains in this environment, particularly around the timing of the California moratoriums being lifted. Those moratoriums, as a reminder, have given our tenants the unilateral right to defer rent. The timing of those moratoriums being lifted will have the most significant impact on the trajectory of bad debt levels in 2021, as about 1/2 of our watch list of the bad debt is related to tenants that are following the moratorium.
Okay, thanks. You mean 1/2 is tied to tenants you think are healthy but not paying because they don't have to?
Yeah, absolutely. Important to note that we are collecting the vast majority of our rents from our tenants. Collections this quarter were near 98%, and that's really close to pre-COVID levels. Big picture that the number of tenants not paying rent is really minimal. As we talked about last quarter, we did anticipate a pickup in bad debt and about 1/2 of our bad debt reserve is related to tenants that are following moratorium. We don't have certainty, but we have a pretty high level of confidence that these tenants are in good financial health. They're open, they're operating, and will begin paying rent and their outstanding AR when the moratoriums lift.
Do you have any latest thoughts on when the moratoriums might lift across your sub-markets?
Yeah.
Hi, Jamie. This is-
That's a really-
David. Oh, sorry. Yeah, this is David. The moratorium was extended by the governor through the end of March. This is basically the statewide enabling action that allows each locality to have their own orders in place. We had 48 initially that we were tracking, and of those, about 22 have been rescinded. Many have already been lifted. However, the most impactful are the orders for the city and county of L.A., which are both still in effect. As long as the governor's order is still allowing this, there's the potential for the orders to remain in place. Our expectation is that, it's very likely that the governor, who's already extended the order several times before, would extend it again.
Okay. How does bad debt and deferred rent impact your same-store growth rate, both, I guess, when we think about what you delivered in 2020 and what you projected for 2021?
Yeah. In terms of projections for 2020, it impacts the growth rate. Certainly depends on where we come in terms of the 125-150 basis range. In terms of the impact to same property for 2020, that number for the full year was about 210 basis points of growth impact.
It was a 200 basis point drag in 2020?
Yeah, it was a 200 basis point drag to our growth. Yeah.
Just to be clear, like the $6-$7 cash in 2021, like what do you think that is normalized?
Yeah. In terms of that same property cash versus GAAP spread, COVID deferrals and repayment account for about half of the 300 basis point variance. Our cash same property NOI guidance is 6%-7%. Our GAAP is 3%-4%, that's 300 basis points. Say ex-COVID and the deferral collections, it's about 4.5%-5.5% on a cash basis.
Okay. All right. Finally, from me, just as you think about the acquisition pipeline, can you talk about how big it looks overall today and what percent might be OP unit deals?
Hi, Jamie. It's Howard. Nice to hear from you. Well, we announced we have about $280 million under LOI or contract. We really don't talk much about what that makes up until we announce the transactions. That said, we're really optimistic about more UPREIT transactions. I can't comment on what might be in play, but that audience, or group, let's call it, of owners, you've heard us talk about them for many years now. They continue to age and they're really heading toward making their major life decisions. All of the UPREIT deals we did during the year were exactly that. People that are well into their 80s, doing estate planning. There's tremendous tax efficiency around these OP transactions. Yeah, we're optimistic that we'll be able to talk more about those. Otherwise, the pipeline is very strong.
I think today, behind that $280 million in terms of sort of the top line of what we tracked, you've seen us show you some of the heat maps of those properties between the one week, one month, six months. In terms of the top of the list, there's probably 200 million square feet of product that we're tracking. I'll give you an example of how deep the pipeline was. Last year, we made offers on $22 billion worth of product. That's 544 LOIs. The year before was about 1/2 that amount in terms of the valuation of those LOIs. The pipeline's growing. Year in and year out, we're just getting better at what we do, and the opportunity set for us is growing. Obviously, we focus on cataloging these off-market type transactions, which is really the differentiator in our marketplace.
Jamie, this is Michael. I just wanted to add some color to that. If you put yourself in the shoes of one of those longtime owners, they've owned in Southern California, in many cases, for many decades, and they understand and appreciate this market. They know it as the strongest market in the country by far. When they look at Rexford, it's a truly unique opportunity. There is no other industrial REIT in the country that's solely focused on infill Southern California. What we hear repeatedly from these owners is they're very reticent to consider an UPREIT with another REIT that's diversified across the entire country because any other market would represent a dilution in quality relative to what they already own in terms of their market presence and long-term tenant demand fundamentals. Rexford really is a unique solution for them.
The other factor that could play a role as we move forward is the potential for the 1031 exchange tax treatment to be removed from the tax code. If that happens, that's going to really, we think, drive incremental demand towards the UPREIT. Long as the UPREIT structure survives, and we haven't heard otherwise, because it'll be virtually the only solution for folks to monetize the value of the property on a tax-deferred basis and continue the growth in a manner that they could with Rexford. For a range of reasons, we're pretty excited about the overall opportunity going forward.
Okay. Thank you for your thoughts.
Our next question is from Emmanuel Korchman with Citigroup. Please proceed.
Hey, everyone. Just over time, your average lease size, or I guess that can be translated to average tenant size, has ticked up. Is that sort of by design, or has it just happened based on the mix of assets you've been able to buy?
Well, I think a lot has to do with the assets we've been buying, Manny. There was a time where we could buy multi-tenant industrial at a tremendous discount, and today, multi-tenant is fairly attractive to people and is selling at full value. You don't see us buying a lot of those type of product anymore. Because we're buying assets that have bigger tenancies, obviously the average tenant size is growing. We've also sold off several of those multi-tenant projects as well, so that's had an impact too. I think our average size in the portfolio now is about 20,000 square feet, and that's moved up from previous. I think, and even today, if you look at the leasing we did, I think the last quarter, the average size lease was about 17,000 ft.
Right. And then, just looking at G&A into next year, it's a pretty big ramp. Is that just based on where the equity is and just natural inflationary G&A growth, or are there other investments that you guys are making as you're growing as a company?
Yeah. Hey, Manny, it's Laura. As you've all seen, we've experienced really robust growth in our overall asset base over the last few years. Over the prior two years alone, we've added $2 billion of assets to our portfolio. Last year, market capitalization grew nearly 30% in 2020, in the full year of 2020. At the same time, our G&A as a percent of revenue, which was about 11.2% in 2020, is certainly trending in the right direction, and we believe we're closing the gap relative to the peer average. I'll note that I think it's important to think about kind of where we are in terms of nearing the completion of building out our platform. It certainly makes the G&A comparisons more difficult relative to our peers that may not be growing at the same pace.
We do expect that our G&A ratios will level out, and we'll begin to see a decline in the near term as we've built out the bulk of our platform. One other note in terms of our G&A is that about $17.1 million of our G&A is non-cash compensation, is related to non-cash compensation. Much of this, as well as some of the cash performance compensation, is tied to our overall company performance. Our guidance assumes a max level of payout related to us achieving max performance. We believe this is the most conservative way to provide guidance. All that being said, if we don't perform at these max levels, we won't achieve these projected levels of G&A that we've guided to.
Just as an example, if we achieve target performance versus max performance in 2021, that equates to a reduction in the cash G&A of nearly $2 million.
Manny, this is Michael. I think the other part of your question around are we making sort of interesting incremental investments that might be in part representative within that G&A, and I think that's absolutely the case. Not only are we still very much a growing company, I think there's no industrial REIT that grows anything close to the way Rexford is growing. I think if you look at the incremental investments we do make, it drives a return on G&A that I think is also unique in our sector. I'll just give you a couple of quick examples. You look at the investments that we make, for instance, in our originations capability.
By that I mean, we have a dedicated research team, a dedicated marketing team, and an acquisitions team that in terms of sort of, I would say, just size and quality and depth of expertise is substantial. Looks very different than probably any other industrial REIT in our sector. If you look at the return on that investment, well, we've made about $1.2 billion of investments last year, and a full 75% of the transactions were through off-market and lightly marketed transactions, which were a direct result of that incremental investment. Which in turn drives substantially better economics and return on investment, return on equity, as compared to just typical institutional type yields and investments, had they been marketed transactions.
And then if you look [audio distortion] I think most of you on the phone who've met with us have seen our acquisition pipeline workflow system that's 100% digital and enables us to drive that tremendous volume of workflow. We've invested and created a similar system on the leasing side. Leasing at Rexford is 100% digital, and we try to squeeze all the latency out of the system, and that's why you see us handling the growing volume of leasing activity, still driving sector-leading spreads and record volumes for Rexford year-over-year. We take a similar approach in how we service our customers and how we operate the company internally. It's a company that's very focused on innovation, and that does drive some of the incremental G&A, but it has very substantial long-term ramifications, including the ability to hire fewer people proportionate to our growth going forward.
We really, as I mentioned in my prepared remarks, we see substantial operating leverage building through the company as we grow.
Thanks for that, Michael. Just a final question from me. On the occupancy guidance, it looks like that sort of midpoint decline is similar to the one going into 2020 that was given with 2019 results. Is there anything specific that you think may expire, or is that just using sort of that average absorption and turnover number and just applying it as if this was a more normal year?
Hey, Manny. First, I want to note a change in our occupancy guidance this year. Previously, we have guided on year-end occupancy, and our guidance number now is average occupancy for the full year. I think this metric more directly is reflected in NOI and is hopefully helpful for you all. For 2021, the comparable 2021 pool, the average occupancy was 97.8% in 2020. The midpoint of our 97% to 97.5% guidance implies around a 50-basis point decline in occupancy. We have about 4.5 million square feet of total leases expiring in 2021. While we're seeing great activity, strong demand, there's still a lot of blocking and tackling that remains. As the pandemic continues, uncertainty does as well. At this point, we feel that our guidance is prudent.
Thanks, everyone.
Our next question is from Dave Rogers with Baird. Please proceed.
Yeah. Hey, everyone. Mike, you talked about again this quarter. Can you talk about kind of the underlying market rent trends and now looking back over the last three or four quarters, kind of what's developed involved, any changes overall that you're seeing kind of underlying in the market?
Hi, David. I'm sorry. I don't know if the others could hear, but if you wouldn't mind repeating and maybe take yourself a little closer to your mic. It was just really you were breaking up there.
My apologies. Is this better?
Much better.
All right. I guess it really came back to your leasing spreads were strong. You mentioned that just a moment ago. I wanted to get at more of the underlying market rent growth trends and kind of the underlying economics of the markets now that you can kind of look back three, four quarters from pre-pandemic through the worst of it and now what seems to be much more normalization. Give us an update on kind of where the market trends are.
Hi, Dave. It's Howard. I think just boots on the ground today, I'll tell you that it's nothing short of astounding what we see in terms of rents. We typically reforecast our rents each quarter. The team seems to be doing it now weekly. I mean, it's unbelievable. There's such demand for space, and rents are growing so quickly. I'll give you a great example. We just finished construction on a 335,000 sq ft park in the Inland Empire West. There's 10 buildings. We have 10 spaces, or rather, 10 spaces and six buildings. That was about 18% leased at the end of the year. I think we're just about now 48% leased with some of the leases signed and a couple about to be signed. Rents are up 20% above what our market rent assumptions were.
You're talking about rents that literally changed $0.05 or $0.10 within the past month. It's pretty hard to look back on prior quarters right now and garner some trends just from that. There's just so many different industries coming into the market in terms of existing uses that are growing and businesses that are doing well. You've got the e-commerce impacts. There's a tremendous amount of leasing that we're doing now for companies that are trying to separate a bit from selling through Amazon or even just having Amazon carry their products in their warehouses versus distributing themselves. It's just a lot of blocking and tackling on the ground right now. It's really exciting. It's going to be interesting to see where things go this year.
When you talk to a lot of the brokers and look at projections, it seems like high single-digit rent growth is where things are headed for 2021 in most of the markets.
Howard-
If you want to also, just I think relevant to that, Howard, do you want to give a sense for where the annual bumps? One thing that's a little unique to our market is that our leases have, for the most part, predominantly have annual rental rate increases in them. Howard, do you want to chat about where we see that going and kind of the year-to-date activity in that respect?
Yeah. We've really kicked up the push in terms of growing rents faster than 3% per annum in leases, and we're starting to have some real traction on it. The park I just mentioned to you that we just delivered, all the leases we're setting there have 3.5% increases in them. There's a 1.1 million square feet industrial park we have in the Inland Empire West.
Sort of a premier complex with mid-bay dock high type space. We're now doing 4% increases across the board on all the renewals and the leasing over there. We're making a big effort and rolling this out to all of our product. I think really we implemented that at the beginning of the year, this other push. Stronger growth ahead.
That's great. Then just one follow-up on the acquisitions. Obviously, a big increase in acquisition volume the last two years. How much of 2020 may have been driven just by early fear some people's hands and wanting to get out, and maybe then at the same time took some of your competitors out of the business just for a couple of quarters, and now maybe they're coming back. I guess the questions really geared to what's going to stop acquisitions from being at or above last year's levels, or is there anything really outside of economics that do that?
Year-to-year, we don't offer guidance on acquisitions because we just can't predict what's going to happen. Earlier in the year, yes, you're right. We did have a slowdown and a pause. A lot of people were on the sidelines. We were still active a bit. Certainly thinking differently initially at the start of the pandemic. Most of our acquisitions occurred in the fourth quarter. We had $875 million worth of acquisitions. That said, again, I mentioned earlier the pipeline's deep. We certainly have high hopes for where we might go. We just can't predict. It's hard to predict really what ultimately happens throughout the year.
All right. Thank you.
Our next question is from Sarah Pan with JPMorgan. Please proceed.
Hi, this is Sarah. I'm on for Michael Mueller. Just two questions from me. The first one is on the competitive landscape. Could you tell me a bit about the capital that you're seeing, the same assets you're going for, and also prevailing cap rates that you're seeing? The second one is, could you comment on just increased port activity and the impact it has on your tenants?
I'll take the first one, and then Michael, maybe you want to address the ports. As far as competition in the marketplace, we're certainly seeing a lot of capital shifting out of some of the other sectors into this setting. Industrial's a great place to be. They have limited access to our market. They're really going to be focusing on more marketed transactions. Michael described earlier the size and breadth of our acquisitions team, and our business model is to focus on lightly marketed and truly off-market transactions where we really don't compete against anyone or very few people. I gave some numbers earlier about the amount of LOIs we write in a year. I think we're our own greatest competition. We could be buying a lot more product.
It really just gets down to some of the underwriting criteria that we apply in whether we inbound or pass on different opportunities or whether they're just not ripe to be able to buy. There's always been a lot of capital in Southern California. It's no secret. There hasn't been one for years that we're really the best market in the country to own industrial product. The difficulty, though, is just accessing the market, and we've created a differentiated business that allows us a unique access to the market.
I'll just comment maybe briefly on the ports. We have seen a tremendous amount of record port volumes for the year, up just under 3% for the year compared to 2019. Obviously, we saw a substantial surge in the second half of the year, in part pent-up demand being sort of reentering the market, but also reflecting really strong underlying consumer consumption and demand. We continue to see that. There's a backlog at the ports of Southern California, the number one and number two largest ports in the country, L.A. and Long Beach. There's a substantial backlog of ships anchored offshore, which is not uncommon. We've seen that in prior periods, peak distribution periods, and they're working through that, partially caused by some pandemic-related shortage of labor and longshoremen offloading the containers at the port, which is being resolved.
We see extremely healthy volumes through the ports. As a reminder, by the way, one of the important elements of the Rexford position and portfolio in infill Southern California is that we are predominantly driven by consumption. In prior periods when we've seen disruptions in the ports, we have not seen disruption in our tenant demand. They figure out how to get the goods if they can't get it through the ports. Depending upon which research one would like to believe, probably upwards of 15% or more of goods imported through those two ports are actually consumed locally and regionally.
It's that regional consumption that's the key driver for our demand within our tenant base, as opposed to some of the big box tenants in non-infill locations that are going to be disproportionately driven by changes in port volumes or global logistics, shipping trends, et cetera.
Thank you.
As a reminder, just star one on your telephone keypad if you would like to ask a question. Our next question is from Vince Tibone with Green Street Advisors. Please proceed.
Hi, good morning. Given the success of your recent bond offering, how are you thinking about potentially repaying some of your existing debt early ahead of maturity in order to lower borrowing costs and extend the overall maturity profile?
Hey, Vince. It's Laura. Thank you for joining us today, and welcome to the industrial sector coverage. We're constantly evaluating our debt maturity profile, and especially the rates in the market today certainly very attractive. At the end of the day, we're really focused on maintaining our very strong investment grade profile. We ended the year with a low net debt to EBITDA at 4x at the low end of our current range. As I said, we're constantly evaluating it, and rates continue to be very attractive.
No, thank you for that. Just maybe to clarify or follow up, the term loan facilities that are the next two unsecured debt that's coming due, could you pay those without penalty? Is there something, if you're going to prepay the swaps, there'd be some kind of real cash outflow there?
Yeah. They are prepayable, but there is a swap termination charge that we would incur.
Got it. Thanks. One more from me. I know in the past you've described some of your acquisitions or different deals as core plus, value add. I'm just curious how you think about the different return thresholds for each. Just if you were going to categorize your 2020 acquisitions in total, what would be the rough mix maybe between those buckets?
Hi, Vince. It's Howard. Well, first of all, we can't really predict year to year what that bucket will look like in terms of the mix between value add or core or even core plus. When you look at 2020 acquisitions, it turns out to be a year that we were able to buy more core than we've been able to land in many years, which we're real pleased with, frankly. The value add was a bit lower in terms of the component of acquisitions for 2020. Interesting, though, we announced some transactions for 2021. We closed about $95 million, and 1/2 of those transactions are value add.
In terms of yields, I'd point you really to our repositioning page, where if you look at both the repositionings and some of the redevelopment projects, the yields that we're projecting are very similar, achieving just below 6% return on total cost for both types of projects. Clearly, there's huge value we're creating in a marketplace that you see today assets that are stabilized and marketed, trading at sub-four yields to the growing amount of investors clamoring to get their hands on the product here in our markets.
By the way, just to add a little more color to that. That activity that we generated last year and in recent years, if you look on a go-forward basis in terms of the embedded NOI growth embedded in our current portfolio, assuming we didn't buy another asset, we're looking at a full almost 23.5% NOI growth potential embedded in the current portfolio over the next 18-24 months. That's over $62 million of incremental NOI projected, and roughly 1/3 of that is coming from Q4 acquisitions alone. Even more interesting to me is 1/3 of that, well over $20 million, is expected to be derived from repositioning assets as we stabilize them and lease them up. Those are some of the more value add, core plus type yields that you also were asking about.
It's driven by the balance of investment activity. I think it's real interesting if you look forward at the incredible impacts that these investments are scheduled to have.
That's great color. Thank you. Maybe just one more quick follow-up. Is there any caps in terms of how much future repositioning or [valuing] your portfolio before the market is hot, you'll kind of take the deals that you think will return?
We don't really look at deals in terms of the heat, number one. I'll let Howard address that. Whether the market's hot or cold, our investing discipline, whether the stock is trading at a perceived high or perceived low value, those are not the primary drivers of our investment criteria activity. I'll let Howard address it otherwise.
Yeah. No, I was just going to say, we've spent the past 18 months rebuilding our team in terms of the design and construction group at the company to grow our capacity. We have some very seasoned members on this team, and we literally have a licensed architect now that came from a highly prolific industrial architectural firm. We're gearing up, and we actually can handle quite a bit more in terms of the projects that we're doing right now. It's an exciting aspect of the business, and I already pointed out the yields that we're able to achieve through that type of work. It's an essential component of what we do, and we hope to be able to grow and do even more than you're seeing currently on our repositioning page.
Great. Thanks a ton.
Thank you. This does conclude our question and answer session. I would like to turn the call back over to management for closing remarks.
Well, on behalf of the entire Rexford Industrial team, we want to thank everybody for tuning in today. We want to thank you for your interest and support of Rexford. We wish you and your families well and healthy, and we hope for vaccination soon for all. Thank you again, and we look forward to connecting in about three months.
Thank you. This does conclude today's conference. You may disconnect your lines at this time, and thank you for your participation.