Greetings, and welcome to Rexford Industrial Realty, Inc. Fourth Quarter 2019 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 the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. Stephen Swett with ICR. Please go ahead, sir.
We thank you for joining us for Rexford Industrial's fourth quarter 2019 earnings conference call. In addition to the press release distributed yesterday after market close, we posted a supplemental package in the investor relations section on our website at www.rexfordindustrial.com. Today's call, management's remarks, and 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 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 reconciliation 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, Adeel Khan. They will make some prepared remarks, then we will open the call for your questions. Now I'll turn the call over to Michael.
Thank you. Welcome to Rexford Industrial's fourth quarter 2019 earnings call. I'll begin with a summary of our operating results and some perspective on our market opportunity. Howard will then cover our acquisition activity. Adeel will follow with more details on our financial results and guidance. We will then open the call for your questions. We are very pleased with the fourth quarter and full year 2019 results. Our team continues to execute on our strategy to create value by investing within the infill Southern California industrial market. For the quarter, we achieved a company share of core FFO of $35.8 million, which is a 31.4% increase over the prior year quarter. Core FFO per share was $0.32, which represents a 10.3% increase year-over-year. On a same -property basis, NOI increased 5.5% on a GAAP basis and 7.2% on a cash basis.
After excluding the impact from the lease-up of properties and repositioning, stabilized same-property GAAP NOI increased by 4.1% and cash NOI increased by 5.1%. During the quarter, we signed 115 leases for approximately 1.5 million sq ft. Our comparable leasing spreads were 42% on a GAAP basis and 27.1% on a cash basis. We achieved 97.6% occupancy in our stabilized same-property portfolio at year-end. We also completed 10 acquisitions during the quarter for an aggregate purchase price of approximately $258 million and completed $20.8 million of dispositions. For the full year, we grew the company share of core FFO by 34.3% and by 9.8% on a per share basis. Same-property NOI increased 6.2% on a GAAP basis and 8.7% on a cash basis. Excluding the impact from the lease-up of properties and repositioning, stabilized same-property GAAP NOI increased by 3.7%, and cash NOI increased by 6.1%.
We signed over 400 leases totaling 5.3 million sq ft, and we completed 34 acquisitions for a total of $970 million of investment in our target infill Southern California industrial market, representing a 24.7% increase in portfolio square footage. Approximately 79% of 2019 acquisitions were achieved through off-market or lightly marketed transactions sourced through our proprietary origination method, with 41% of investments providing value -add renovation and repositioning opportunities to increase cash flow and value over time. 2019 was also notable for the release of our inaugural environmental, social, and governance report, which detailed numerous positive ESG impacts achieved through the execution of our unique business model. We quantified the substantial environmental benefits associated with our value -added repositioning and recycling of industrial buildings to higher -value industrial use.
The year was also notable as our team drove the dramatic growth of Rexford's unique portfolio within the nation's largest and strongest industrial market while maintaining a low -leverage, fortress-like balance sheet, which ended the year at 3.7x net debt to adjusted EBITDA. As a result of these exceptional results, we are pleased to announce that we are increasing our quarterly dividend by 16.2% to $0.215 per share. This is our fifth consecutive year with a dividend increase, and we have now raised the quarterly dividend by 79% since our IPO in 2013. With regard to market conditions, we continue to experience a substantial supply-demand imbalance. Despite extremely limited supply, incremental tenant demand continues to be driven by a few key factors, including a strong economy with Southern California positioned as the nation's largest and most diverse zone of consumption.
We also benefit from sustained e-commerce growth and the continued demand for shorter delivery time frames. Our portfolio is 100% positioned within prime last -mile infill Southern California industrial markets located within and adjacent to the nation's largest regional population. Our infill locations are critical to enable tenants to satisfy the increasing demand for short delivery time frames. Meanwhile, on the supply side, although certain other large U.S. industrial markets are experiencing an increase in supply, infill Southern California continues to experience diminishing supply due to a lack of developable land, permanent barriers limiting new construction, and the fact that product continues to be removed from the market through conversion to non-industrial , higher-value uses. As a result of these factors, our portfolio is operating at essentially full occupancy, and we believe we are positioned to generate favorable NOI growth into future periods.
Our in-place portfolio, for example, assuming no additional acquisition, is positioned over the next 18-24 months to potentially generate about 17% incremental annualized NOI growth compared to Q4 2019, equal to almost $40 million, driven by the following go-forward contributions to NOI. About $14.6 million from the completion and lease -up of properties in repositioning and approximately $12.6 million through the mark-to-market of 9.3 million sq ft of expiring leases, with rental rates estimated to be about 15% below market. About $6 million from the impact of properties acquired in the fourth quarter, plus about $5 million generated by 2.4 million square feet of executed but uncommenced leases. In addition, as our investment pipeline continues to grow in volume and quality, we expect to continue to acquire accretive investments within high-demand infill Southern California industrial markets, which we believe will drive additional NOI growth.
In closing, we couldn't be more excited about our go-forward opportunities. Our team continues to execute at an outstanding level, and we are grateful to our team members, each of whom makes an exceptional contribution towards our collective success. In particular, we'd like to acknowledge and thank our Chief Financial Officer, Adeel Khan, for his exemplary service at Rexford over the prior eight years. As we announced last month, we are excited and support Adeel as he seeks a new chapter in his career as he ultimately transitions out of the CFO role. Adeel plans to stay on board serving as our CFO until a new CFO is transitioned into the role, and thereafter, we hope to establish a new go-forward role for Adeel at Rexford, consistent with his personal and professional objectives. With that, I'm very pleased to turn the call over to Howard.
Thanks, Michael. Thank you , everyone, for joining us today. The infill Southern California industrial market continues to outperform with the supply-demand imbalance maintaining the strong landlord market that allows us to continue driving rents and maintain high occupancy levels. Our target markets, which exclude the Eastern Inland Empire, ended the fourth quarter at 2% vacancy, with asking rents up 8.7% on a weighted average basis over the past 12 months, according to CBRE. Turning to acquisitions, the full year 2019 was stellar for our growth. We completed 34 acquisitions for a total of $970 million, which added 5.4 million rentable square feet to our portfolio. During the fourth quarter, we completed 10 acquisitions totaling approximately $258 million and adding 1.8 million sq ft to the portfolio. 80% of these transactions were off-market or lightly marketed, with 50% of the transactions being value-add.
Our ability to source off-market investment opportunities derives from our unique sourcing methodologies and deep market relationships, which result in significant benefits to Rexford in terms of superior returns. Our projected stabilized yields remained very attractive and accretive, ranging from 5.3% - 7.3% in the quarter. In October, we acquired Slauson Commerce Center, a 336,000sq ft industrial complex located within the L.A. Central submarket for $41 million. The two-building property is in an extremely supply-constrained sub-market, fully leased at rents that are estimated to be approximately 17% below market. Our initial yield is about 5% and growing thereafter. As a note, the yields I reference here and for subsequent transactions are presented on an unleveraged basis. We acquired West Mandeville Street , a 60,000 sq ft, 22-foot clear industrial building in the L.A. South Bay submarket for $11.5 million.
The property is fully leased on a long-term basis at an initial yield of 5.3%. Also in October, we acquired Crestmore Point, a 56,000 sq ft building in the central San Diego submarket for $8 million. The two-tenant low -coverage property has the opportunity to increase approximately 24% below market rents by renewing in-place tenants or repositioning the property. The initial yield is 4.8% with a projected stabilized yield on total cost of 7.3%. In November, we acquired Berry Way, a 120,000sq ft , three-building industrial property with excess land located in the Orange County North submarket for $27.6 million, which equates to a below-market land value of $58 per square foot. The fully leased property offers future value -add opportunities, and our initial yield is 5.6%. Also in November, Rexford acquired Motor Avenue, a 4.2 acre land site located in the L.A. San Gabriel Valley sub-market for $7.2 million.
We intend to construct a 97,000 sq ft, 32-foot clear Class A industrial building on this infill land parcel. At completion, our yield on total cost is estimated to be 5.7%. We also acquired East E Street, located in the L.A. South Bay submarket, for $14.9 million. The port-adjacent 58,000 sq ft modern property is fully occupied by three tenants at approximately 38% below market rent and includes excess paved land for container storage. Our initial yield is 3.1%. The estimated stabilized yield on total cost is 5.3%. Rexford also acquired Monarch Street, a five-tenant, two-building complex located in the Orange County West sub-market for $34 million. The project contains approximately 277,000 sq ft. At lease expiration, we intend to redevelop one of the buildings into a state-of-the-art 97,000 sq ft Class A industrial building and also improve functionality and aesthetics for the remaining building.
Our initial yield is 4.6%, and the projected stabilized yield on total cost is estimated to be 5.3%. In December, we acquired the Pomona Distribution Center, a two-tenant industrial building located in the L.A. San Gabriel Valley submarket for $88 million. The property contains approximately 752,000 sq ft with an in-place rent estimated to be about 20% below market. At lease expiration, we expect to drive cash flow by re-tenanting at higher rates or by executing value -add repositioning, generating a projected stabilized yield on total cost of about 5.6%. Also in December, we acquired Del Amo Boulevard, a single-tenant industrial building located in the L.A. South Bay submarket for $12 million. The 57,000 sq ft building is fully leased at approximately 50% below market rent and contains excess land for container storage. Upon lease expiration, we expect to perform minor repositioning to drive rents to market.
The initial yield is 3.6%, and the projected stabilized yield on total cost is 5.8%. Finally, Rexford acquired Euclid Street, a single-tenant industrial building located in the Orange County West sub-market for $14 million. The 63,000 sq ft property was acquired in a long-term sale -leaseback transaction at an initial yield of 5.3%. Turning to dispositions, during the fourth quarter, we sold two multi-tenant properties for an aggregate of $20.8 million. This brings our 2019 disposition total to $33.6 million. We expect to continue to sell assets on an opportunistic basis to unlock value and recycle capital. Now I'd like to take a moment to update you on our value -add repositioning program. During the fourth quarter, we completed the repositioning of a 110,00 sq ft building in our Mission Oaks project in Ventura.
The fully stabilized 462,000 sq ft project has achieved a 9% return on cost, exceeding our initial underwriting by 160 basis points. For the full year 2019, we stabilized about 875,000 sq ft of repositioning at an average stabilized yield of 8.1%. Moving forward, we have a deep pipeline for value creation with approximately 1 million sq ft currently under repositioning or about to start construction and another approximately 400,000 sq ft to start later in 2020 and 2021. Finally, though 2019 was certainly a record year in terms of acquisition volume, our pipeline remains strong as we look ahead in 2020. We currently have $268 million of new investments under LOI or contract, which includes a $210 million portfolio recently announced. These acquisitions are subject to completion of due diligence and satisfaction of customary closing conditions. We will provide more details as transactions are completed.
I'll now turn the call over to Adeel, whom I'd also like to thank and acknowledge for his outstanding contributions to Rexford's success over the past years. Adeel?
Thank you, Howard, and thank you, Michael and Howard, for your kind words. Beginning with our operating results. For the fourth quarter 2019, net income attributable to common stockholders was approximately $19.9 million or $0.18 per fully diluted share. This compares to $12.4 million or $0.13 per fully diluted share for the fourth quarter of 2018. For the three months ended December 31, 2019, the company share of core FFO was $35.8 million as compared to $27.2 million for the three months ended December 31, 2018. On a per share basis, the company's share of core FFO was $0.32 per fully diluted share, representing a 10.3% increase year-over-year.
For the full year 2019, Rexford Industrial Realty reported net income attributable to common stockholders of approximately $50.5 million or $0.47 per fully diluted share as compared to net income attributable to common stockholders of $36.1 million or $0.41 per fully diluted share for 2018. For the full year 2019, Rexford Industrial Realty reported a company share of core FFO of $131.1 million compared to $97.6 million for the year ended December 31, 2018. On a per share basis, the company's share of core FFO was $1.23 per fully diluted share for 2019, a 9.8% increase compared to $1.12 per fully diluted share reported in 2018. Same property NOI was $39.3 million in the fourth quarter, which compares to $37.3 million for the same quarter in 2018, an increase of 5.5%.
Our same property NOI was driven by a 6.7% increase in total rental revenue and a 10.5% increase in property operating expense. Increase in property operating expenses was due to a favorable property tax adjustment in the fourth quarter of 2018, combined with an unfavorable property tax adjustment in the fourth quarter of 2019. Including the combined effect of these adjustments, property expenses increased by 4.1%. On a cash basis, the same property's NOI increased by 7.2% year-over-year. Stabilized same property NOI growth, net of the impact of repositioning, was 4.1% in the fourth quarter on a GAAP basis and 5.1% on a cash basis. For the full year 2019, the same property NOI increased 6.2%, driven by a 5.7% increase in revenue and a 3.9% increase in property operating expense. On a cash basis, the same property's NOI increased by 8.7% compared to 2018.
Net of the contribution from properties and repositioning, 2019 stabilized same -property NOI increased 3.7% on a GAAP basis and 6.1% on a cash basis. Turning now to our balance sheet and financing activity. We continue to focus on maintaining a highly flexible balance sheet to support our growth objectives. During the fourth quarter, we issued approximately three million shares of common stock for ATM at a weighted average price of $46.77 per share. Which resulted in net proceeds to Rexford of approximately $337 million. We utilized this fund to fund our acquisitions for working capital and other corporate purposes. At the end of the fourth quarter, we had $78.9 million of cash, full availability on our $350 million credit facility, and approximately $344 million available on our ATM program. We have no debt maturities through 2021, with our next maturity being our $100 million term loan in 2022.
Finally, our net debt to adjusted EBITDA ratio at year-end was approximately 3.7 x, which equates to about 12.3% debt to total enterprise value. With regard to our dividend, on February 10, our board of directors declared a cash dividend of $0.215 per share for the first quarter of 2020, payable on April 15 to common stock and unit holders of record as of March 31. Additionally, our board of directors declared a Series A and B preferred stock cash dividend of approximately $0.37 per share for the first quarter of 2020, payable on March 31 to our Series A and B preferred stockholders as of March 13. Also, our board of directors declared a Series C preferred stock cash dividend of approximately $0.35 per share for the first quarter of 2020, payable on March 31 to our Series C preferred stockholders as of March 13.
Finally, I'd like to introduce our outlook for 2020. We expect to achieve a company share of core FFO within a range of $1.30-$1.32 per share. Our guidance is supported by several factors. We expect year-end stabilized same-property occupancy within a range of 96%-97%. We expect to achieve stabilized same-property NOI growth for the year of 3.7%-4.2%. Please note that our 2020 stabilized same-property pool comprises 160 properties with an aggregate of 19.8 million sq ft, representing approximately 75% of our consolidated portfolio square foot. This portfolio was 97.9% occupied on January 1, 2020. For G&A, we anticipate a full-year range from $36.5-$37 million, including about $14 million of non-cash equity compensation.
Please remember that our guidance refers to our in-force portfolio as of today and the pending acquisition of the 11-property portfolio previously disclosed in the Form 8-K filed on December 23, 2019. Our guidance does not include any assumptions for acquisition, disposition, or capital transactions that have not yet been announced. Our guidance for core FFO does not include acquisition costs or other costs that we typically exclude when calculating this metric. Finally, as a note for 2020, we're only providing guidance for stabilized same-store NOI as we believe this is the best measure to convey the performance of our operating portfolio. That completes our prepared remarks. With that, we'll open the line to take any questions. Operator?
Thank you. At this time, we'll be conducting a question-and-answer session. 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. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. One moment, please, while we poll for questions. Your first question comes from the line of Jamie Feldman with Bank of America Merrill Lynch. Please proceed with your question.
Great. Thank you. I guess just to start out, can you talk about your outlook for cash same-store NOI next year? I know you provide GAAP.
Yeah. Hi, Jamie. The outlook for cash, just for everybody, 3.7, 4.2 with the GAAP numbers. Cash would be 5.2% - 5.7%, so 1.5% higher.
Okay. Can you talk about your assumption for interest expense for next year? What's baked into the model, and just how should we think about any kind of pieces of debt that might be ? I know you said you have no expirations over the next couple of years, but any other kind of unique financing should we be thinking about?
Right. Jamie, it's Adeel here again. For debt, just making certain that we are factoring in the model the debt that we placed last year. You're going to see the full-year impact of that, but that was fixed debt, $75 million and $25 million, which was done in Q3 last year. That needs to be in the model for everybody. The other piece that is part of our guidance is relating to the 11-property portfolio
Which is going to have some assumed debt, and that 8-K was issued in December 2019. That's also factored into our interest expense for next year, which is also going into the FFO guidance that we issued.
Okay. Sorry to keep nitpicking on some of these details, but leasing spreads—what do you guys think that looks like next year?
Hi, Jamie. It's Howard. We don't see really any changes in the market. Today, in 2020, things are fast-paced. We're signing a lot of transactions. From what I've seen through the beginning of the year, we're pretty similar to where we've been in the past. Maybe not as high as the past quarter we've just reported on in terms of those spreads. Very impressive spreads.
Jamie, it's Michael. Good to hear your voice. I think we've indicated that the mark-to-market on expiring leases is about 15%.
Okay. Just last month for me, some of your peers have talked about just how business feels today versus this time last year. How would you answer that question?
It's a great question, and business feels equally strong as it did a year ago. We're not seeing any signs of change in terms of tenant demand.
Okay. All right, thank you.
Your next question comes from the line of Blaine Heck with Wells Fargo. Please proceed with your question.
Great. Thanks. Good morning out there. Clearly the coronavirus has been dominating headlines and has been a popular topic of discussion amongst retailers and some logistics companies. Can you just talk about whether you guys have seen any disruption in leasing or even discussions with tenants that might be worried about the impact to their supply chain?
Hi, Blaine, it's Howard. That's a great question, and we polled all of our leasing people and the property management staff, and I think really the best barometer that we're seeing is a couple of our projects. One is a few of the small bay dock-high projects in the Inland Empire as well as the San Gabriel Valley. There's one with a 1.1 million sq ft project, and we have two others that really do add up to about 1.5 million feet. They're occupied in the high 90% range. Our leasing people, surprisingly, actually, were telling us that there's been a resurgence of leasing activity at the beginning of the year. Surprisingly, we're doing quite well, and they're not seeing any signs of a slowdown in those particular projects, which are probably 80% or more occupied by Asian businesses.
We also talked to a few of the different tenants we have that are expiring right now that were already in lease renewal negotiations that are 3PL. Interestingly, they're all telling us that they're diversifying, or rather, their customers are actually diversifying where their goods are coming in from, so they're not as reliant on China. Some of these guys are actually talking to us now about even taking more space. Again, not really seeing any impact or slowdown in demand or growth from the 3PL.
Blaine, it's Michael. I'll add to that, too, as a reminder that our tenant base in infill Southern California in our portfolio is disproportionately driven by local regional consumption. About 50% of all imports are distributed and consumed regionally, ±. We've seen other periods in historical periods where we've seen a slowdown or even a shutdown of the port, which would be a good proxy for a slowdown of imports driven by anything. For instance, in 2002, we had an actual shutdown of the port due to labor. What we saw during those periods was literally no change at all in tenant demand within our portfolio. Again, it's principally because it's demand-driven, consumption-driven. As Howard stated, the tenants get creative if they need to in terms of where they find the goods or how they source the goods.
Demand has not shown any signs of letting up.
Great. That's helpful. Great job on the renewal lease that you guys signed with Cosmetica Labs during the quarter. I think the other large expiration you guys have this year is 280,000 sq ft with Command Logistics. Can you just speak to the probability of renewal there or any discussions you guys are having with that tenant?
Sure. This is Howard again, Blaine. If you looked at our top 20 expiring leases, that's about one and three-quarter million square feet. That represents about 45% of all of 2020 expirations. Today, we're actually in discussions for renewals with about 70% of those top 20 tenants. That certainly also includes Command, for which at this point we feel there's a high probability of their renewal as well.
Great. Last one for me. It was reported, I think, that you guys bought a property from Prologis this quarter for $41 million. I think it was this Slauson Commerce Center. Can you just talk about any differences you guys may have seen in negotiating with a large kind of publicly traded REIT versus maybe some of the off-market deals you guys do with more local players?
I'd say it's always a pleasure to work with a professional. Most of the time when we deal with institutional sellers or large REITs such as Prologis, the transactions go very smoothly because we all know what we're doing.
Do you guys expect a lot more opportunity could come from PLD since they're trimming down a couple of the large portfolios they purchased recently, or is this more of a one-off?
Well, we actually bought two properties from them. The other was the 700,000 chain distribution building in Pomona. That was also purchased from them as well. We have ongoing discussions, and we'd love the opportunity to buy more. Obviously we can't predict or tell you anything about what's happening today.
All right. Fair enough. Thanks, guys.
Your next question comes from the line of Manny Korchman with Citi. Please proceed with your question.
Hey, everyone. Adeel, if we look at your occupancy guidance for the year, it shows a significant dip at year-end 2020 versus January 1st , 2020. Can you talk about maybe the trend of occupancy throughout the year and what's causing that year-end stat to drop as much as it is?
Hey, Manny. Thanks for the question. Yeah, just as a reminder, that's the year-end guidance on the occupancy, and that's a spot number as of [inaudible] 31, 2020. It's not indicative of what the average occupancy might look like for the full year, and that is going to be higher. The second piece that's important to note is that the occupancy that we guide, specifically the 97% on the high end at the end of the year or on the low end, is not directly correlated to the NOI. You are benefiting from the average occupancy that's within the portfolio during the year. There is not a direct correlation between those two. That's not different from what we've experienced in the past. Those are just timing differences and nothing more than that.
1st January 2021, those tend to be rectified pretty quickly, and it's based on the releasable spreads that you have seen over the last +12 quarters. I think that gives us a lot of opportunity and ability to take those leases that are not being renewed and be able to push higher rents. I think it's an opportunity. It's nothing more than timing from that perspective, but the correlation to the NOI is not one to one.
Manny, this is Michael. Thanks for joining us today. I'd like to give a little insight in terms of how we think about expiration and occupancy on a go-forward basis relative to cash flow growth and the opportunity to drive NAV growth. So if you were sitting here at Rexford Management, if you were in our shoes and you looked at those expiring leases through the end of the year and next year, for example, we have a lot of optionality associated with those choices. It's not infrequent that we choose to not renew a tenant who would otherwise wish to stay in the space because we see an opportunity to drive additional cash flow and NAV growth. I'll give a couple examples. Let's just say we have a space, a typical property of 100,000 sq ft. Let's assume $10 per square foot rent per year.
Let's say we've owned that property for a while. As we've stated, we have about a 15% mark-to-market on expiring leases into the next year and two years. If all we did was roll that tenant, and maybe we suffered a dip in occupancy for a short period of time to a higher tenant paying about 15% more rent, well, there alone, we've driven NAV by 15%. Now let's take another example that gets even more interesting. Let's look at our acquisitions last year. Of the 34 acquisitions we made last year, 28 of them had in-place inbound cash flow at about a 5% cap rate. Even though they may not have been fully leased and even though there may have been some value creation opportunities with low embedded rent. On average, those same 28 properties have a projected stabilized cap rate that's projected to be about 6%.
Now take that same property example, a 100,000 sq ft property, for $10 rent today when we bought it. Bought it at 5% cap rate. That means we paid $20 million for the asset. Let's assume that we solve for a 6% stabilized cap rate. That drives rent to $1.2 million from $1 million. That's a 20% increase in rent, much of which would fall straight to the FFO bottom line. Let's remember that market cap rates are substantially lower than what we're typically buying at. Let's assume a market cap rate around 4%, although we know that market cap rates are oftentimes below 4%. If you take that math together, the asset would then be worth $30 million, which would result in a 50% increase in NAV. I'm just going to take one more example, and then I'll finish up here.
Let's assume that another option for some expiring space is if we can reposition it, and we do that a lot. Let's assume that same asset, 100,000 sq ft, started with $10 rent and was bought at a five cap. Let's assume that we invest another 15% of the purchase price, so we invest another $3 million. The total cost becomes $23 million. If you'll notice, as we disclosed last year, all of our repositioning work we saw to about an 8.1% unlevered stabilized yield on completions last year. It's not to say we're going to do that every year, but it's indicative of what our capacity is. You take that math together, and the resulting NAV would be about $46.5 million. That's over a 100% increase in NAV on a total cost of $23 million.
We've increased NAV by two times. Frankly, we do a lot of deals where we're increasing NAV by substantially greater amounts. I think it's really important to internalize and understand the Rexford business model, that occupancy is not the primary measure of how we're creating value here at the company. That's one of the beautiful things about Rexford that truly differentiates us from any other peer in the industrial sector and from any other REIT in the REIT universe. We have a fragmented universe of tenants and spaces within our portfolio and within our pipeline of acquisitions, where we have continuous opportunities to create a tremendous amount of value. Oftentimes you'll see us trade occupancy for value creation.
Thanks, Michael. Just switching topics. The Proposition 13 split roll has been a big topic of conversation recently. Can you give us your updated thoughts and impacts in your portfolio and whether it's changed anything in the transaction market to date with sellers trying to get ahead of it?
Hey, Manny, it's Adeel. Thanks for the question. If the Proposition passed in November 2020 and would be effective in 2022, and we ran a bottom-up analysis based on our current leases and what the tax complexion looks like in terms of assessed value and so on and so forth, the impact would be less than $0.01 of FFO if we were to do this today. It's not very material in terms of the FFO impact. The other thing that's important to note , which we've always educated everybody about, is about 48% of our portfolio has been acquired over the last three years. Certainly, we're benefiting from that, and I think that allows us to do things that are different.
The other thing is that about 90% of our leases allow us to pass the increases back, that's why the impact is very mitigated when I speak about the FFO impact. It's a pretty great spot for us to be. I'm sure Howard and Michael can add a little bit more color in just the opportunity set, what it does in terms of us playing in a level playing field compared to the other landlords who are going to see this increase.
As a reminder, if you would like to ask a question, please press star one on your telephone keypad. One moment, please, while we poll for more questions. Your next question comes from the line of Eric Frankel with Green Street Advisors. Please proceed with your question.
Thank you. I just wanted to discuss the capital markets environment. Obviously, REIT share prices have come up quite a bit since the start of the year. Has that changed the mindset of either you or your competitors in terms of just the investment landscape and what buyers are willing to bid in terms of prospective returns on acquisitions?
Hey, Eric, it's Michael. Thanks for joining us today. Obviously, we can't speak for competitors out there. We see intense activity on marketed transactions. A lot of capital is trying to get into Southern California industrial because it's the strongest market in the country. It's been that way pretty much forever. Is it more intense today than it was a year ago? It's equally intense. I would describe it that way. With regard to how we look at the world, I think that was the first part of your question. We don't really think about our hurdle rates or weighted average cost of capital in terms of the spot cost of debt or equity, because that can change on a daily or almost hourly basis, particularly with the stock price.
When we think about our weighted average cost of capital and the hurdle rates, it's more in terms of steady -state cost of capital and on the equity and debt side. Our hurdle rates are probably a little higher than a lot of our competitors internally. That's why you see us actually working so hard to identify off-market and lightly marketed transactions, which comprised, I think, about almost 80% of our transactions last year. What's amazing with that intensity of activity is that we turned down about 90% of the deals that we actually sent LOIs for last year. We sent out LOIs on about $10.5 billion worth of transactions last year. Frankly, had we been willing to pay just a little more on a lot of those deals, we had the potential to deliver substantially higher transaction volume last year.
We're staying true to our knitting, staying focused, and going to keep the discipline, and hopefully, that gives you a little insight into how we see our hurdle rates and investment activity given in light of today's capital markets.
That's a very helpful color. Thank you. Adeel, just to follow up on the Proposition 13 split roll, could you maybe just clarify how much your reimbursed taxes would increase if the Proposition came through and you had higher assessed values in 2022?
Yeah, absolutely. Right now, again, obviously, we're looking at this analysis as of today. Right now, the gross dollar amount would be about $9 million approximately in terms of increase in the dollars in terms of taxes. Keep in mind that it's a 1% or maybe slightly higher increase just on assessed value, and the rest are just direct assessments, which are not impacted. It's about $9 million, of which we're recovering most of it, and that's how we can go up to that little less than $0.01 in terms of the net FFO impact after recovery.
Okay. Thank you.
Your next question comes from the line of Jon Petersen with Jefferies. Please proceed with your question.
Oh, great. Thank you. In the 8-K you put out on the 11 property portfolio, which I know you guys said is in your guidance, you indicated that you might finance that through OP units. Curious if there's any update there on how you plan to proceed, if you could still continue to do that, and how that is worked into the guidance.
Hey, Jon, it's Michael here. Thanks for joining us today. We're just not able to update at this time, but once the transaction closes, you'll get all the information. I apologize we're not able to give any more information.
Okay. I guess, how is it factored into the guidance then?
You know what? We really can't comment because of it—
Can't comment. Okay.
...we haven't closed the transaction, and frankly, we don't have that information yet.
Yeah.
As soon as we know, you'll know.
Okay. Maybe if you could just speak more broadly in terms of conversations you're having with potential sellers and the attractiveness of using your OP units as currency. Are you seeing more or less of that today?
Hi, Jon, it's Howard. Yeah, we've seen those conversations growing in frequency. I think that from where we are as a company, we're a much more stable and attractive business for people to consider trading their assets into. Frankly, I think at this point in the cycle, people appreciate the focus on being in Southern California and the strength of the market here. Most of the people we talk to, obviously, we're talking about their assets in Southern California, where they have great familiarity with the market, and it's a lot easier to understand what they'd be getting by trading into a company like Rexford versus potentially another business that perhaps owns assets around the country, around the world. These people are used to being able to understand and make decisions locally.
Those conversations are getting more fruitful, and we're hopeful that in the future, we'll be able to transact more frequently on an OP unit type basis.
Okay. All right. Thanks for the color. Thank you.
Your next question comes from the line of Michael Mueller with JPMorgan. Please proceed with your question.
Hi, good morning. This is Sarah on for Mike Mueller. Just a question on cash spread. Given that they've been in the 20% range this year, do you see that being indicative of the overall portfolio mark-to-market today?
I'm sorry, could you repeat the question? You were breaking up a little bit there.
Yeah. Given that cash spreads have been in the mid-20s in Q1 2019, do you see that as being representative of the overall portfolio mark-to-market today?
Did you ask if cash rent growth is projected mark-to-market at 20% in 2019? Was that the question?
Yeah. If that is representative of the overall portfolio mark-to-market, given that they've been in the mid-20s in 2019.
I think what we've indicated is on the expiring leases, there's about a 15% mark-to-market, and then of course, on the in-place leases, typically we have about a 3% rental rate bump embedded in those contractually. That's sort of the color that we can provide at this point in time.
Okay, thank you.
Your next question comes from Chris Lucas with Capital One Securities. Please proceed with your question.
Hi, guys. Just a question on the G&A guidance for 2020. Looks like about half of the bump in gross dollar increase in guidance from 2020 to over 2019 is related to non-cash comp. The rest of it, are there headcount increases associated with that or infrastructure investments, or how should we be thinking about what you're doing with this sort of $+3 million increase in G&A on the cash side?
Yeah, no, we appreciate it. thanks for joining us today. There is some head count increase. Not so much on the facility side marginally, but more on headcount. I think also, if you look at the G&A increase, you brought up a great point, which is the bulk of it is non-cash equity, and the bulk of that, frankly, is performance-based. At the end of the day, if we're not performing at or exceeding high levels over the longer term, then we won't actually receive that. Unfortunately, we have to account for it today, though.
I think also if you look at the G&A growth relative to the growth of the company, whether you measure it by FFO growth or whether you measure it by portfolio growth in terms of square footage, which sometimes drives headcount growth, you'll find that the G&A growth has been substantially lower than the actual growth of the company. We think we do have a good amount of operating leverage embedded in the company. Maybe we're doing a little catch-up this year on the organizational side and the staffing side relative to the growth we've seen over the prior two, three years. I think as we move forward, you'll continue to see more leverage in the operating structure of the company, and those margins will continue to grow. Operating margins continue to grow as well.
Chris, this is Adeel. Just to add just on the headcount piece. Obviously, about a year ago, when the leasing costs were now part of the G&A, as our portfolio continued to grow, that was some of the headcount that you were also experiencing because that's part of your G&A. Our portfolio square footage is increasing very meaningfully, and that takes a certain caliber of people and just the overall headcount. That's also something we're experiencing. I just wanted to add that color in terms of the headcount in the market as well.
Okay, thanks. Just one more follow-up on that, which is just simply, as it relates to the CFO transition, are there embedded costs that are associated with that process in the guidance, or is that a sort of an extra deal?
Yeah, Chris, Adeel again. We took a conservative approach, and we essentially kept my comp in its entirety, cash and stock in their entirety, for the full 2020 year. I think that was the most conservative way to do it. Obviously, once the transition is completed, we will have further announcements, and we can further provide guidance if necessary. Right now, we took the most conservative approach.
Mike or Howard. Could you comment in terms of where you are in that search process?
Yes. We can comment a little bit, of course, we'll disclose when we actually have more concrete knowledge. I would say that the interest in the role at Rexford has been very strong. One of the side benefits of sending out the 8-K some weeks ago was it kind of put everybody in the finance world that operates or is interested in operating in a REIT on notice that there's an opportunity here. We're very fortunate. We're operating in the strongest industrial market in the country. I think we've got a great company and a great team. Frankly, in terms of what we're going to create here at Rexford, our vision for the future, we truly feel we're barely out of the starting gate. It's an exciting opportunity for the right candidate.
So far, we're cautiously optimistic based on a very high quality of interest that we've received so far.
Great. Thank you. That's all I had.
Ladies and gentlemen, we have reached the end of the question-and-answer session, and I would like to turn the call back to management for closing remarks.
On behalf of the company, we'd like to thank everybody for tuning in today, and we look forward to reconnecting in about three months.
This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.