Greetings, and welcome to Rexford Industrial Realty, Inc's second quarter 2019 earnings call. At this time, all participants are in a listen only mode. A brief 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 Steve Swett of ICR. Thank you. Please begin.
We thank you for joining us for Rexford Industrial's second 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 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, Adeel Khan. They will make some prepared remarks, and then we'll open the call for your questions. I will turn the call over now to Michael.
Thank you. Welcome to Rexford Industrial's second quarter 2019 earnings call. I will begin with a summary of our operating and financial results. Howard will cover our transaction activity. Adeel will follow with more details on our financial results, balance sheet, and guidance. We will open the call for your questions. Our team just completed another exceptional quarter. Rexford's target infill Southern California markets remain strong, and tenant demand continues at historic levels, driven by robust growth of regional consumption, business activity, e-commerce, and the continued push for shorter delivery timeframes. Despite this intensity of tenant demand and historically low vacancy within our infill markets, permanent barriers limit new construction, even as the market continues to lose supply that is being converted to other uses.
As a result of these superior fundamentals and the high barriers that constrain supply growth, our target infill Southern California market is also the most highly valued industrial market in the nation by a substantial margin. Scarcity of supply has driven rental rates to levels that have consistently been about 80% higher than the average of the next 10 largest U.S. markets. As a consequence, per square foot building values are about 3x higher than the average of the next 10 largest markets. What we find interesting is that in addition to the nation's highest rents, rental rate growth in our markets has increased by about 9.4% on average over the prior five years. Our market rent growth has been nearly double the national average, according to CoStar, driven by the unique supply-demand dynamics within our markets. However, Rexford's performance reflects more than the unique dynamics of our markets.
More importantly, it is a direct result of the strength of our team and the consistent execution of our value-driven strategy. Our exclusive focus in the infill Southern California industrial market enables us to penetrate more deeply than other less focused investors, which translates into favorable cash flow growth, value creation, and what we consider to be the attributes of what makes for a great business. First, these qualities include our ability to identify and source investments through off-market or lightly marketed transactions, representing about 70% of transactions completed since our 2013 IPO, which translates into better economics and superior cash flow and NAV growth. Second, these include our creative capacity to increase cash flow and value through modernization and repositioning of underutilized industrial property. Finally, our vertically integrated operating platform enables us to out-compete on leasing, asset management, and customer service.
We believe our operational excellence drives outperformance over time and through cycles. Now, turning to our second quarter results. We increased company share of core FFO by 40% and increased core FFO per share by 11% to $0.30 per share over the prior year quarter. Our same property NOI grew by 6.8% on a GAAP basis and by 11.1% on a cash basis. Excluding the impact of space under repositioning, our stabilized same store NOI growth was 3.9% on a GAAP basis and 7.9% on a cash basis. Our stabilized same property portfolio closed the quarter at approximately 98% occupied. Our leasing performance reached record levels during the second quarter. We signed 106 leases for 1.7 million square feet. Our leasing spreads were an exceptional 39.4% on a GAAP basis and 22.3% on a cash basis.
On new leases, our spreads were 45.6% on a GAAP basis and 28.4% on a cash basis. Our retention rate was 85% for the second quarter, and net absorption was about 431,000 sq ft . With regard to our external growth, we completed approximately $340 million of acquisitions during the second quarter, bringing our year-to-date investment volume to $489 million, with 77% of this year's investments completed through off-market or lightly marketed transactions. To support this growth, we continue to maintain a fortress-like low leverage balance sheet, providing us with maximum flexibility to capitalize upon emerging opportunities. Our net debt to EBITDA ratio was 3.2x at quarter end, which equates to approximately 11.1% debt to total enterprise value.
As a result of this outstanding execution by our expert team, we are pleased to announce that we are increasing our full year guidance and now expect company share of core FFO in the range of $1.19- $1.21 per share. As we reflect upon the company's performance and unique market position, we couldn't be more excited about our future growth opportunities. Although we've grown our portfolio over four-fold to 24 million square feet since our IPO six years ago, our portfolio only represents a 1.2% share of the infill Southern California industrial market. In addition, with about 1 billion square feet built prior to 1980, our value creation opportunity through renovation and repositioning of existing buildings is extensive. Consequently, we are exceptionally well-positioned as a value-driven consolidator of industrial property within infill Southern California, the nation's largest and most sought-after industrial market.
Finally, our comments would not be complete without acknowledging and thanking our Rexford team for their tireless dedication, creativity, teamwork, and excellence that have enabled our success and achievement. I'm now very pleased to turn the call over to Howard.
Thanks, Michael, and thank you everyone for joining us today. The infill Southern California industrial market remains exceptionally strong with a supply-demand imbalance that continues to favor owners of well-located industrial real estate, driving rents and occupancy levels. Our target markets, which exclude the eastern Inland Empire, ended the second quarter at 1.9% vacancy, with asking rents up 8.4% on a weighted average basis over the past 12 months. With regard to recent investment activity, during the second quarter, we completed 10 acquisitions totaling approximately $340 million, adding 1.8 million square feet to our portfolio. Approximately 70% of these transactions were off-market or lightly marketed and sourced through our proprietary research and broker relationships.
In April, we acquired East 15th Street, a 238,000 sq ft industrial property located in the L.A. Central submarket, in exchange for partnership units through an UPREIT transaction valued at $28.1 million. We completed a new 10-year lease with a quality tenant shortly after closing and stabilizing the asset at an approximately 6.1% yield. We also acquired a three-building portfolio containing 456,000 sq ft for $76.6 million located in the San Gabriel Valley, Orange, and San Diego counties. The portfolio generates an initial yield of 4.3% with a projected stabilized return on total cost of just over 5%. We acquired Rancheros Drive, a 49,000 sq ft , 100% leased industrial property located in the North San Diego submarket for $7.9 million. The property generates an initial yield of 6.1%.
In our largest off-market transaction this quarter, we acquired San Fernando Business Center, a five-building, 88% leased industrial park containing 592,000 sq ft , located in the L.A. San Fernando Valley submarket for $118.1 million. The initial portfolio yield is 3.6%, with in-place leases estimated to be 20% below market on average. After lease roll and implementing certain value add enhancements, we project a year three return of approximately 4.7% and growing thereafter. In another off-market transaction, we acquired Waples Court, a 106,000 sq ft vacant high image industrial building located in the Central San Diego submarket for $21.3 million. We intend to demise the 31-foot clear building into two units to create higher rental value space, and our projected stabilized return on total cost is 5.3%. We also acquired Susana Road, a 53,000 sq ft , 23-dock position transload facility located in the L.A. South Bay submarket for $13.5 million.
The property is fully leased to a single tenant and generates an initial yield of about 5%. In May, we acquired Oxnard Street, a 71,000 sq ft , 405 freeway frontage industrial property located in the L.A. San Fernando Valley submarket for $16.8 million. The property is fully leased to a single tenant at an initial yield of 5.3%. We also acquired 9750 San Fernando Road, a 2.7 acres paved industrial land site located in the L.A. San Fernando Valley submarket for $7.4 million. The property is fully leased to a single tenant at an initial yield of 6% and offers the potential for future development of a new distribution building. We also acquired Turnbull Canyon Road, a 191,000 sq ft , 30-ft clear industrial building with 44 dock doors located in the L.A. San Gabriel Valley submarket for $27.1 million.
The property is fully leased to a single tenant at an initial yield of 4%, with in-place rents estimated to be approximately 30% below market. In June, we acquired a 15.5- acre, fully entitled development site in the Inland Empire West submarket for $18.2 million plus an additional $5 million holdback to be released to the seller upon meeting certain development milestones. The seller will serve as the fee developer for construction of a 334,000 sq ft, six-building industrial complex comprising state-of-the-art warehouse space. The project is scheduled to be completed in the second quarter of 2020 for a total all-in cost of $56.7 million and is expected to yield about 5% at stabilization. Turning to our repositioning activity.
During the second quarter, we stabilized West Carson Street in the Los Angeles South Bay submarket with a 10-year, 44,000 sq ft lease to a credit tenant, achieving a stabilized return on total cost of 6.3%. At mid-year, we have 1.5 million square feet of space under repositioning or future development, with several completions targeted for the second half of this year. With regard to dispositions, in June, we sold a 62,000 sq ft, two-building industrial complex in Orange County for $6.8 million, achieving a 13% IRR. We will continue to pursue asset sales opportunistically to unlock value and recycle capital. Finally, we continue to leverage our deep industry relationships and our proprietary research and technology as we add to our pipeline of acquisitions.
After a strong first half of the year, we have another $324 million of new investments under LOI or contract, 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.
Thank you, Howard. Beginning with our operating results. For the second quarter 2019, net income attributable to common stockholders was approximately $12.8 million, or $0.12 per fully diluted share. This compares to $5.2 million, or $0.06 per fully diluted share for the second quarter of 2018. For the three months ended June 30, 2019, company share of core FFO was $32.1 million as compared to $22.9 million for the three months ended June 30, 2018. On a per share basis, company share of core FFO was $0.30 per fully diluted share, representing an 11% increase year-over-year. Same property NOI was $38.8 million in the second quarter, which compares with $36.3 million for the same quarter in 2018, an increase of 6.8%.
Our same property NOI was driven by a 5.2% increase in same property rental revenue, and same property operating expenses were essentially flat, increasing by just 0.4%. On a cash basis, same property NOI increased by 11.1% year-over-year. Turning now to our balance sheet and financing activities. As we continue to seek opportunities to drive long-term growth, we intend to maintain our strong liquidity position and balance sheet capacity to allow us maximum flexibility and access to well-priced capital. During the second quarter, we issued approximately 5.7 million shares of common stock through our ATM at a weighted average price of $38.21 per share. Which resulted in net proceeds to Rexford of approximately $213 million. At the end of the second quarter, we had approximately $183 million of cash and full availability on our $350 million credit facility.
We also ended the quarter with $535 million of availability on our ATM program. At June 30, we had no debt maturities until 2022, and our liquidity position is strong, with a net debt to EBITDA ratio of 3.2x . In July, we closed on a $100 million private placement, including $25 million of 10-year unsecured notes with a rate of 3.88%, and $75 million of 15-year notes with a rate of 4.03%. The proceeds will be used to fund near-term acquisitions and repositioning activity. With regard to our dividend, on July 29, 2019, our board of directors declared a cash dividend of $0.185 per share for the third quarter of 2019, payable on October 15, 2019, to common stock and unit holders of record on September 30, 2019.
Additionally, our board of directors declared a preferred stock cash dividend of approximately $0.37 per share for the third quarter of 2019, payable on September 30, 2019, to our preferred stockholders as of September 13, 2019. We're increasing our full year 2019 guidance for company share of core FFO to a range of $1.19-$1.21 per share from our previous range of $1.18-$1.20 per share. Our new guidance range is supported by the following updated assumptions. Same property NOI growth to range from 5%-6.5%, up from our previous range of 4.5%-6%. Year-end same property portfolio occupancy of 96%-97%, up from 95.5%-96.5%. Year-end stabilized same property portfolio occupancy of 97%-97.5%, up from 96.5%-97.5%. The rest of our guidance assumptions are unchanged and detailed on page 23 of our 2Q 2019 supplemental information package.
Please note that our guidance does not include the impact of any transactions or capital market activities that have not yet been announced, nor acquisition costs or other costs that we typically eliminate when calculating this metric. That completes our prepared remarks. With that, we'll open the line to take any questions. Operator?
Thank you. We'll now be conducting a question and answer session. If you'd 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'll press star two if you'd 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 keys. One moment please while we poll for questions. Thank you. Our first question comes from the line of Jamie Feldman with Bank of America Merrill Lynch. Please proceed.
Great. Thank you. I guess just to start, I want to ask you about the San Fernando Business Center. Can you just talk about the potential occupancy upside, what you're seeing in terms of tenant demand? I think you said it was a stabilized 4.7% return. What gives you comfort at that number after you've done all the work?
Hi, Jamie. It's Howard. Thanks for the question. The San Fernando Business Center is really a class A project in that market. It's been a bit mismanaged, so there's some deferred maintenance and really some modifications we can do to drive rental value there. It had a bit of vacancy. There's really one building, and what we're doing on that building is we're actually demising it into three units. We've actually, I think, are pretty close to signing a deal on one of those units, and I expect probably we'll wind up leasing the other two units pretty close to when construction's completed. Looking at that project, the in-place rents were 20% below market, so there's some great upside. The 4.7% yield is really just looking at the initial lease-up and then some roll that's happening.
That's a project that'll climb over 5% in the not-too-distant future after that 4.7% stabilization.
Jamie, this is Michael. I'll just add that when you hear us project out future yields, typically, we're not assuming anything close to the market rent growth as has been occurring. There is room for outperformance, but frankly, that's just how we like to underwrite.
Okay. Thank you. That's helpful. Can you talk about, you've got expirations next year from Cosmetic Labs and Command Logistics. Any early read on those leases?
Hi. Yeah, it's Howard again. We're making a lot of progress actually on those expirations. If you look at, I think, the top 14 expirations next year in terms of revenue, that represents about 35% of 2020 expirations. We're already in discussions with, I think, 60% of that top 14. If you even look at what we've done this past quarter, 60% of our renewals were for expirations that occurred starting after January 2020. We're well ahead of our efforts in terms of those expirations. I think we're trending also some of the lease term as far as those renewals. Those are terming up. I think our average lease term this past quarter was about six years, which is well above what you've seen in the past.
Those two are on your top tenant list. Is there anything specific about those two leases?
As far as Cosmetics, we've been talking to them. It's a 300,000-ft building. They've subleased out 100 of it. From the earlier discussions we've had already, them and their subtenant don't really intend to leave. Frankly, there's nowhere for them to go in that marketplace, even if they wanted to leave. We're fairly comfortable at this point that we'll be able to renew them. It's not 100%, obviously.
Command Logistic Services, that's a top tenant also.
Yeah. Same story there. The South Bay market, it has a 0.6% vacancy rate. That's the largest market in the Southern California region. It's close to 250 million square feet. Again, nowhere to go. We had them in some temporary space for a short time. They actually downsized earlier this year. They moved out of 100, and I think they're pretty comfortable in the building that's there. The tenant we put into the 100 is actually interested in their space if they do leave. We're pretty confident in our ability to maintain an income stream out of that space as well.
Okay. Thank you very much.
Thank you. Our next question comes from the line of Blaine Heck with Wells Fargo. Please proceed.
Hey, guys. Good morning. Clearly, there have been some large transactions in the market recently and aggressive bidders on industrial properties. Does any of that deal flow change the way you guys think about your business or your capital recycling strategy?
Hey, Blaine, it's Michael. Thanks for the question. Good to hear from you. There have been some larger portfolio transactions. Really, frankly, doesn't impact how we see our business or our business model or how we're underwriting transactions. I think if you see our transaction activity, it's indicative of the same strategy we've been executing ever since we went public about six years ago. We find that every few years, you get a little surge in the institutional portfolio trading. Folks need to mark to market in their portfolios. It's not unusual. The activity we've seen this year is not unusual. It's a little more than last year in terms of large portfolios, but certainly indicative of what we've seen many years prior.
Also, Blaine, that's Howard. I think what's interesting and very comforting is to see what kind of yields we're hearing those larger portfolios are trading for, which to us indicates that the Southern California pieces in them are trading at extraordinarily low yields, most likely below 4% or perhaps even well below a 4% yield.
Right. Okay, that's helpful. Retention was very high this quarter at 85%, and you guys continue to see extremely strong rent spreads. How do you think about the desire to keep steadily high occupancy versus maybe pushing rents even harder on renewals?
Hey, Blaine, it's Michael. We've talked about this in the past. We're aggressive, we work hard, we have a tremendous leasing team that works with our listing brokers and often works directly with our tenants. We think they're doing a great job at maximizing our rents. There's a balance. I think in some quarters, you've seen us roll more tenants, not renew tenants who wanted to stay because we could re-tenant at much higher rates. It's just hard to predict quarter to quarter, how those percentages of those we keep who want to stay and those we roll might fall in place. I think what we're seeing today, as Howard mentioned, is an exceptional level of occupancy in these markets, tenant demand that is truly at historic levels, tenants who have very few options in these markets.
You're seeing retention this quarter really performing for us.
Do you guys have any specific expectation for retention in 2019?
It's really tough to say. We have a lot of expirations through the end of the year still, and tremendous amount of activity. It's hard to speculate. We don't believe that retention also is a primary metric for us because we've been creating so much value by from time to time rolling tenants and rolling to higher-paying tenants. We have a tremendous number of small, medium-sized leases rolling through the end of the year. In terms of your modeling, I wouldn't encourage you to necessarily model 85% retention, but I think we've been averaging probably closer to 70%± .
All right. That's helpful. Thanks.
If you'd 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 keys. Thank you. Our next question comes from the line of Manny Korchman with Citi. Please proceed.
Hey, everyone. Just wondering if there were other ground-up development opportunities out there that you're looking at, either in the same structure where you've got the seller building it for you, or where you do it yourself or hire someone to do it?
Hi, Manny. It's Howard. We've closed similar transactions to that in the past. We'd closed something in the Ventura County market last year. It was a smaller building. It was 57,000 sq ft. It was a fairly similar structure where the developer finished out the project, and we were able to actually lease that one prior to completion. I think we stabilized that at about a 5.7% return. We're talking to some of the developers out there, I think a lot of them have the opinion right now that there shouldn't be any difference in pre-selling a project, even with no leasing in place, versus what a stabilized Class A project would sell for. What I mean by that is, some of the conversations I've had, they seem to think they're worth 4% returns on a forward commitment on a vacant building.
That's not something that Rexford believes in, and obviously, when I describe that we expect to stabilize this project that we transacted on at about a 5% return, that's very attractive compared to what other people feel these are worth. For us, occasionally, we're going to come across something where a developer needs to close. This particular developer did need to close. They had this thing tied up for quite a while. It's actually part of a little bit larger development. There's a retail component, which they intended to keep. This actually helped them, and it enabled us to achieve a much higher return on the stabilized basis. It's also interesting, and I might point out to you, we decided to do a deep dive this past quarter and take a look at the amount of construction that's occurred in our markets.
You also have heard us mention how much product is being removed from the markets. What I found really interesting was just looking at the greater Los Angeles marketplace, which is about half of the market in Southern California. A little over a billion square feet is in that market. Over about eight and a half years, we had net new supply added of about 8 million feet. That's the difference between, I think it was about 20.6 million square feet added and the rest of the market removed. Whereas you look at on the other side of that, the Inland Empire, today there's 28 million square feet under construction, and 140 million square feet was added in that timeline.
It's rare to find any type of development in our infill markets that makes a lot of sense, and especially for the type of product that Rexford focuses on, which is the sort of the mid-bay or smaller bay for lease product. There hasn't been much of that built in the past 20 years, in fact. It's been mostly the bigger box product.
By the way, Manny, to put that in perspective, the 8 million square feet or so that has been developed in Southern California is dwarfed by the amount of product that has been taken out of the market and converted to other uses. It's just a very unique marketplace.
Thanks for that. It looks like the larger portfolio that you bought in the quarter came from an institutional fund. Are they more or less likely, those types of funds, especially as they hit their timelines or maturities, to go off-market? Do you think that you could sort of become their relationship buyer, if the product type matches what you're looking for?
We're pursuing a lot of product in the marketplace from those type of sellers. It's pretty unusual you find one that is willing to actually do an off-market deal. We ask all the time. We have relationships with them. Occasionally, you're going to see us be able to transact like that. It's more typical with an institutional seller internally being required to expose the property to the market so that they run a process. They were comfortable because of their broker relationship between ourselves and them, and we just happened to agree on a number that, for us, we were very comfortable with. We're very deep in the market. This transaction was in the San Fernando Valley. We own over 3 million square feet there. We have the ability to see forward a little better than most buyers or, frankly, even most owners on the product.
For us, it was just a unique opportunity.
Manny, it's Michael. It's a great question. I think part of that, if I'm hearing your question, I think part of the question is, are there portfolios out there in general that we can take off-market and acquire without a fully marketed process? I think it's important to step back and think about the overall market, because the institutional ownership in our market is actually the smallest percentage of ownership, smallest market share. The largest market share by far is in private hands, individuals, non-real estate professional owners. That represents probably upwards of 1 billion square feet or so that we're tracking that are owned by non-institutional, private owners. We have a range of conversations ongoing with them that we believe will be productive. It's really interesting.
The commonality that you have with a lot of the private owners and some of these institutional owners is, at the end of the day, they're more or less passive owners. They're not striving to eke out every last dollar of value in their portfolios. They're not necessarily aggressively looking forward and investing in their portfolios to create value. There's a tremendous opportunity of embedded value creation opportunity for us, both among the private ownership and the institutional ownership within our infill markets. Again, that's just an integral part of our business model.
Great. Thanks, guys.
Thank you. Our next question comes from the line of Chris Lucas with Capital One. Please proceed.
Hey, good afternoon, everybody. Actually, Howard, you did a great job of talking about the dynamics in the market as it relates to rents and the new supply. I guess I'm just kind of curious as to you've had a number of years now of really robust rent growth. Are we getting to a point where industrial displaces from a higher and better use opportunities for land? Is there anything that changes that you see, say, in the next year or two, the existing dynamics of strong rent growth and very meager supply changes?
Well, we're still going to lose industrial supply. There's just no more land in these markets. To put a high-rise residential project on a site, a hotel, retail, it's worth more to be converted than some of the industrial values, even at these higher rents. We do need more supply. Part of our strategy is sort of unlocking the value and really the additional capacity in some of the older buildings that we're able to buy. A great example is just by upgrading the fire sprinkler suppression systems, we're able to create 50%-70% more capacity within the building on a cubic basis because of fire codes. Back to your question on the rental rates. Keep in mind, land values have skyrocketed. Although rental rates have moved up, it just doesn't mean that everywhere you look, you might be able to do some development.
You've seen land go from-- or right now, we saw it in the past year and a half, all of a sudden escalate up into the $70, $80 a foot range in some of our tighter infill markets, which makes development all the more challenging. The floodgates aren't going to be unlocked in the near future to create a lot more development, but we need it, and you'll continue to see it sporadically. We'll try and be a part of some of the development when we find some opportunities that make sense and we can stabilize them at more attractive yields.
I guess maybe the follow-on for me would be just on your existing portfolio on some of the assets. You talked about value creation. I guess, are you getting to a point where it's more than just systems upgrades, but actually a point where rents are getting to where you would take the building offline and either demolish and rebuild or expand in some way in order to sort of capture that value?
Yeah. No, that's a good question. First of all, these infill markets function a lot differently than markets that are not land-constrained. In non-land-constrained markets. You always have a risk of new development. Everybody's always looking for the best in quality and modern features. Then you move into the infill markets where you can't supply that type of product. We coined a term really to help understand it. We call it relative functionality. What we find is a user is looking for the best building that'll work to solve for their needs. In the infill markets, greater L.A., for instance, had a 1.3% vacancy rate. Options are fairly limited. The value of the existing supply of buildings, for the most part, still is higher than the underlying land value.
That's not to say that some of the buildings we own, we don't think about these acquisitions for long-term covered land plays. Down the road, you may see us replace a building or two here and there. For the most part, it's not really changing dramatically.
Chris, this is Adeel. The only thing I would add that Howard just added, if you take a look at our repositioning page on the supplemental, we not necessarily had to take a building completely offline, but we consistently look at our spaces and do repositioning that doesn't meet the definition where it's down for six months or more. We're constantly tweaking the existing buildings there are to unlock the value that just Howard just talked about, and you can kind of see the activity that takes place.
Chris, just not to belabor the subject, but a great example of what you're asking. We had just bought a property in downtown L.A., 235,000 ft. That was an upfront transaction. We had grandiose plans to put that on our repositioning page and had an extensive program planned. We leased the building within, I think it was 60 days after buying it, and stabilized it at a 6.1% return. That's I think a better example of really what's happening in the market space. It's just so rare that tenants are willing to pay up, and it made more sense for us to capture that transaction. We leased it for 10 years. I think I mentioned at a 6.1% yield versus going ahead and taking it down for an extensive period of time.
Okay, great. That's really helpful. Adeel, while you chimed in, I want to ask you a question just about the balance sheet and the leverage. Ticked up a little bit. Obviously, you over-equitized a lot in the first quarter, more balanced in the second quarter. Just thinking about the back half of the year, given the robust activity level, should we be thinking about the leverage sort of flat here or trending back towards your goals, or how should we be thinking about leverage back half of the year?
Yeah. Thanks, Chris, for the question. Just some basic facts. We ended the quarter with $183 million of cash and post-quarter, as we discussed in the earnings opening remarks, about a $100 million private placement. We have effectively around $283 million of cash, plus full availability on our credit facility. If you put those two numbers, that gives you the $283 million + $350 million, about $633 million of liquidity. If you put that against the $324 million of stuff that's under LOI and escrow, it gives us a very nice place to start. The other point that I think we've talked about in the prior quarters, we like the balance sheet the way it is. I think that is a strength, and we like to operate, if we can, at those levels. We will just try to maximize the best source of capital that's out there.
When we saw an opportunity in the private placement, we did that. Just keeping the strength of the balance sheet is very important for us, especially at this part of the cycle. I think that is something that we'll continue to try to maintain in the grand scheme of making sure that all the other points of reference, like the FFO accretion and the NAV, is working along just fine. I think that is part of the strategy. We'll try to manage that to the best of our ability.
Okay, thank you. That's all I had.
Thank you. Our next question comes from the line of Michael Mueller with JP Morgan. Please proceed.
Yeah, hi. Just curious, when tenants don't renew and they leave, what are the common reasons for it? I'm assuming it's probably not rate, considering occupancy in the market is so high. Is it just in the space doesn't work, it functionally doesn't work anymore for them?
Hi, Mike. It's Howard. It's going to be a lot of reasons. At this point in the market cycle, people are still growing. A lot of times we can't accommodate their need in that building or even expand them in a larger project, so sometimes they're taking more space. Sometimes their business model's changing. A lot of times what you see happen is the rent that we feel a space is worth, a tenant really isn't able to pay in their business. Those are some of the lighter manufacturers and so forth that the rent is more sensitive to them than the typical logistics company today. Yeah, no real trends that we're seeing in the market or whatnot.
A lot of the vacancy, as we pointed out in the past, is really forced on our end just to be able to capture more value out of the real estate.
Got it. Okay.
Okay.
That was it. Thank you.
Thank you. We've reached the end of our Q&A session. Allow me to hand the floor back over to management for closing remarks.
We just want to thank everybody for joining us today and your continued support of Rexford, and we look forward to connecting in about three months. Have a great summer, everybody.
Thank you. This concludes today's conference. You may disconnect your lines at this time, and thank you for your participation.