Greetings, and welcome to Redford Industrial Realty Inc. 4th Quarter 2018 Earnings Conference Call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded.
I would now like to turn the conference over to your host, Steve Sweat with ICR.
We would like to thank you for joining us for Rexford Industrial's Q4 2018 earnings conference call. In addition to the press release distributed yesterday after market close, we have posted a quarterly supplemental package with additional details on our results in the Investor Relations section on our website at www.rexfordindustrial.com. On today's call, management's remarks and answers to your questions may contain forward looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward looking statements are usually identified by the use of words such as anticipates, believes, estimates, expects, intends, may, plans, projects, seeks, should, will, potential, predicts and variations of such words or similar expressions. Forward looking statements address matters that are subject to risks and uncertainties that may cause actual results to differ from those discussed today.
Examples of forward looking statements include those related to revenue, operating income or financial guidance. As a reminder, forward looking statements represent management's current estimates. Oxford Industrial assumes no obligation to update any forward looking statements in the future. We encourage listeners to review the more detailed discussion related to these forward looking statements contained in the company's filings with the SEC. In addition, certain of the financial information presented on this call represents non GAAP financial measures.
The company's earnings release and supplemental information package, which were released yesterday afternoon and are available on the company's website, present reconciliations to the appropriate GAAP measure and an explanation of why the company believes 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. He 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 4th quarter 2018 earnings call. I will start with a summary of our operating results and some perspective on our go forward market opportunity. Howard will then cover our recent acquisition activity and investment pipeline. Adeel will follow with more details on our financial results and will introduce our guidance for 2019. We will then open the call for your questions.
We are very pleased with our exceptional 4th quarter and full year 2018 results as we continue to drive accretive growth and to create shareholder value through the successful execution of our highly focused business plan. Beginning with our 4th quarter results, we achieved company share of core FFO of $27,200,000 which is a 35.9% increase over the prior year quarter. Core FFO per share was $0.29 which represents an 11.5% increase year over year. On a same property basis, NOI increased 9 point 6% on a GAAP basis and 12.4% on a cash basis. And after excluding the impact from the lease up of properties and repositioning, same property GAAP NOI increased by 5.1% and cash NOI increased by 7.8%.
During the quarter, we signed 90 leases for approximately 632,000 square feet. Our leasing spreads were 25.1% on a GAAP basis and 14.8% on a cash basis. We achieved 98.2% occupancy in our stabilized same property portfolio at year end. We also completed 7 acquisitions during the quarter for an aggregate purchase price of approximately $132,000,000 and completed $10,400,000 of disposition. As we begin the New Year, it is a great time to consider macro conditions that may impact our business and to reflect on key aspects of our longer term strategy and results.
Today, global uncertainty is relatively high and many pundits project moderated growth going forward. With this in mind, I'll briefly focus on the key drivers of growth for Rexford. To begin with, tenant demand within our infill Southern California industrial market, as measured by market occupancy, leasing velocity and rental rate growth continues at historic levels. The regional economy remains strong and containerized imports to the nation's 2 largest ports of Los Angeles and Long Beach achieved new records in 2018, exceeding the prior year record set in 2017 by almost 4.5%. Additionally, e commerce continues to grow and evolve with the need for shorter delivery time frames further increasing the importance of last mile locations where Rexford's infill portfolio is located.
Consequently, the internal growth embedded within our in place portfolio continues to be quite favorable, with about 16.5% in incremental NOI growth projected over the next 18 to 24 months without accounting for any future growth through acquisitions. This growth is driven by several factors. First, over the next 2 years, approximately 33% of our leases, representing about 7,000,000 square feet are scheduled to roll. These leases are estimated to be about 11% below market and marking these leases to market is expected to contribute about $8,300,000 to incremental annualized NOI. 2nd, our value add property repositioning and renovation work continues to drive substantial growth.
Our major repositioning projects currently in process are expected to contribute $10,300,000 of incremental annualized NOI over the next 18 to 24 months. With over 1,000,000,000 square feet in our prime infill Southern California market built prior to 1980, we see an exceptionally deep well of value add opportunities in the foreseeable future. 3rd, the $266,000,000 of acquisitions completed since the start of the 4th quarter are expected to contribute incremental annualized NOI approaching $10,000,000 over the next 18 to 24 months. As our stabilized portfolio is operating at or near full structural occupancy, we expect NOI gains to be disproportionately driven by leasing spreads as compared to increases in occupancy. With respect to timing, about 70% of our 2019 incremental NOI generated from leasing spreads is expected to be contributed during the second half of the year, with over 40% of 2019 incremental NOI generated from leasing spreads expected to be backloaded during the Q4.
We are also still within a growth phase of our secular leasing cycle within infill Southern California. So from time to time, you may continue to see us trading occupancy for NOI or NAV growth by our choosing to not extend certain tenants in exchange for re tenanting at higher rents. Although this embedded growth within our current portfolio is substantial, is worth noting that our active investment pipeline and prospects for external growth remain very strong. We expect to see continued accretive growth through acquisitions at meaningful levels with $134,000,000 of investments already completed year to date. I'd like to focus briefly on our full year 2018 and related historical performance as an illustration of our strategy and our go forward plan.
Over the prior 12 24 months, we grew our portfolio by 15% 42%, respectively. During 2018, we completed $493,000,000 of acquisitions and opportunistically sold $48,000,000 of assets. We continue to create value through our best in class repositioning program. During 2018, we delivered and leased over 410,000 square feet, which generated a weighted average unlevered cash yield on total cost of 7.4%. Total rental revenue grew by 31.3% year over year and our margins continued to expand with NOI growing by 34.4% and company share of core FFO by 41.3%.
Finally, our full year 2018 FFO per share growth was 16.7%. This 16.7 percent FFO per share growth was achieved simultaneously with our deliberate delevering of the company from a debt to EBITDA ratio of 5.4 times at the end of 2017 to a debt to EBITDA ratio of 3.6x at the end of 2018, our leverage level equates to about 16% debt to total enterprise value. We believe maintaining a strong and flexible balance sheet is good business, particularly at this stage of the real estate cycle and in light of today's global economic uncertainties. By adhering to an extremely focused and accretive business model at Rexford, we benefit from our ability to generate favorable cash flow growth, while maintaining a fortress like low leverage balance sheet. By doing so, we not only mitigate market risk that we cannot control or predict, but we also position the company to capitalize on emerging opportunities that may present themselves.
As a result of the company's strong performance, we are very pleased to report that we are increasing our dividend by 15.6 percent to $0.185 per share. This is our 4th consecutive year with a dividend increase. As we look into 2019 beyond, we couldn't be more excited about our near and longer term prospects and opportunities. We are a tremendous debt of gratitude to the entire Rexford Industrial team and we'd like to thank each of you for your outstanding contribution and dedication to help build this great company. And with that, I'm very pleased to turn the call over to Howard.
Thanks, Michael, and thank you, everyone, for joining us today. We continue to benefit from our focused strategy of acquiring and adding value to assets in the infill Southern California industrial market, which continues to demonstrate superior supply and demand fundamentals. Our target markets, which exclude the Eastern Inland Empire, ended the 4th quarter at 98.1 percent occupancy, with asking rents up 7% on a weighted average basis over the past 12 months. Supply continues to diminish due to the sustained conversion of industrial property to other uses and low levels of replacement deliveries due to scarcity and high cost of land. These dynamics pressure rental rate growth and high occupancy resulting in continued growth in the value of our portfolio over time.
Moving on to recent transaction activity. In the Q4, we completed 7 acquisitions for $131,700,000 All the 2 of the 4th quarter acquisitions were off market with projected stabilized returns within a range of 5.4% to 6.4%. For the full year, we completed 26 transactions totaling $493,000,000 adding just over 3,000,000 square feet to our portfolio. Approximately 73% were off market for lightly marketed transactions, accessed as a result of our research driven platform and local market relationships. About half of 2018 acquisitions were in the Greater Los Angeles market with a balanced spread throughout our other target infill markets and about 25% were value add.
In October, we acquired Rocky Point in the North San Diego County submarket for $10,200,000 The value add modern property consists of 3 high image buildings totaling 74,000 square feet and is 31% occupied. We intend to implement minor functional and cosmetic improvements and upon near term stabilization project a 5.7% yield on costs. In November, we acquired Innovation Way in the North San Diego County submarket for $24,200,000 The property consists of 2 state of the art buildings totaling 115,000 square feet. The property is 72% occupied, and we project a 5.4% yield on cost upon stabilization in 2019. Also in November, we acquired Gardena Boulevard in the LA South Bay submarket for $16,100,000 The 100% leased single tenant logistics property has 23% site coverage with 55,000 square feet of buildings.
We acquired the property in a sale leaseback, executing a 5 year lease at a rent approximately 18% below market, providing an initial 5% yield. In December, we acquired a 4 building industrial complex at Mason Avenue and Oso Avenue in the LA San Fernando Valley submarket for $29,500,000 The property contains 256,000 square feet in 4 buildings and is 100% leased to 3 highly entrenched tenants at rents estimated to be 16% below market. At lease roll, we intend to perform value add upgrades and raise rents to market. Our initial yield is estimated to be 5.6% with a projected stabilized yield of 6%. We also acquired Fresca Drive located in the Orange County North submarket for $14,000,000 The 115,000 Square Foot, 24 Foot Clear Building is 100% leased to 2 tenants at rents approximately 28% below market.
At lease roll, value add functional and modernization improvements will be completed. The current yield is estimated at 5.4%. We also acquired 6,100 Shiela Street, located in the LA Central submarket for $18,200,000 The 75,000 square foot building is 100% leased to 7 tenants. The property is unique, offering small freezer cooler spaces, which is cost prohibitive to develop. The current yield is estimated at 6.8%.
Finally, in December, we acquired Bonelli Street, located in the LA San Gabriel Valley submarket for $19,500,000 The 149,000 square foot building is 22 to 27 foot clear with 17 dock positions and is leased to a single tenant at about half of market rent. We expect to perform value add functional and cosmetic upgrades at lease roll in 3 years and increase rents to market. The initial yield is 3.1%, and we project a stabilized yield on cost of 5.5%. Subsequent to quarter end, in January, we completed 3 more off market transactions. We acquired Knot Street in the Orange County West submarket for $19,800,000 We intend to modernize the currently vacant 121,000 square foot, 24 Foot Clear Building and add an estimated 45,000 square feet of new 30 Foot Clear Warehouse space.
At stabilization, our expected yield on total cost is estimated to be 5.6%. We acquired Industry Drive located in the LA San Fernando Valley submarket for $7,800,000 in a 1 year sale leaseback. The recently constructed 28 Foot Clear building contains 47,000 square feet. The projected stabilized yield is estimated to be 5.1%. Finally, we completed the acquisition of Conejo Spectrum Business Park located in the Ventura County submarket for $106,300,000 The 9 industrial buildings are 72% leased to a range of credit tenants and consist of 531,000 square feet and 28 acres of land.
We intend to demise a 98,000 square foot building into 2 units in order to increase value. These newly constructed industrial buildings are rare in this highly competitive submarket in which Class A industrial space is virtually unavailable. At stabilization, our expected yield on total cost is estimated
to be about
5%. Turning to our redevelopment activity. In addition to acquisitions, we continue to create value within our portfolio through repositioning assets, which allows us drive the cash flow generating ability of our portfolio independent of market rent growth. We believe our expertise here is a true differentiator. We currently have over 900,000 square feet of space in repositioning, including 1 2019 acquisition.
In 2018, we delivered about 600,000 square feet of repositioned industrial product and stabilized about 410,000 square feet with an aggregate yield of 7.4%. This compares favorably to current market cap rates for fully valued marketed transactions that trade in the mid to low 4% cap range. This demonstrates how our focused value add strategy and execution generates returns meaningfully above market yields, driving growth in our NAV. Looking ahead, our pipeline of acquisitions under a contingent LOI or contract totals approximately $312,000,000 as we continue to mine opportunities in the nation's largest highly fragmented industrial market in infill Southern California. The contracts for these acquisitions are subject to completion as well as satisfaction of due diligence and customary closing conditions, and 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 Q4 2018, net income attributable to common stockholders was approximately $12,400,000
or $0.13 per fully diluted share.
This compares to $11,800,000 or $0.15 per fully diluted share for the Q4 of 2017. For the 3 months ended December 31, 2018, company share of core FFO was $27,200,000 as compared to $20,000,000 for the 3 months ended December 31, 2017. On a per share basis, company share of core FFO was $0.29 per fully diluted share, representing an 11.5% increase year over year. For the full year 2018, Rexford reported net income attributable to common stockholders of approximately $36,100,000 or $0.41 per fully diluted share as compared to net income attributable to common stockholders of $34,400,000 or $0.48 per fully diluted share for 2017. For the full year 2018, Rexford reported company share of core FFO of $97,600,000 compared to $69,100,000 for the year ended December 31, 2017.
On a per share basis, company share of core FFO was $1.12 per fully diluted share for 2018, a 16.7% increase compared to $0.96 per fully diluted share reported in 2017. Same property NOI was $28,800,000 in the 4th quarter, which compares to $26,300,000 for the same quarter in 2017, an increase of 9.6%. Our same property NOI was driven by an 8% increase in total rental revenue and a 3.2% increase in property operating expenses.
On a
cash basis, same property NOI increased by 12.4% year over year. Stabilized same property NOI growth, net of the impact of repositioning, was 5.1% in the 4th quarter on a GAAP basis and 7.8% on a cash basis. For the full year 2018, same property NOI increased 10.6%, driven by an 8.9% increase in revenue and a 4% increase in property operating expenses. On a cash basis, same property NOI increased by 11.5% compared to 2017. Net of the contribution from properties and repositioning, 2018 same property NOI increased 7.4% on a GAAP basis and 9.4% on a cash basis.
Turning now to our balance sheet and financing activities. We continue to diversify our capital sources, optimize our cost of capital and maintain balance sheet flexibility as we grow our business over the long term. During the 4th quarter, we issued approximately 4,000,000 shares of common stock for our ATM at a weighted average price of $32.58 per share, which resulted in net proceeds to Rexford of approximately $128,800,000 We utilized this fund to fund our acquisitions for working capital and other corporate purposes. At the end of the Q4, we had $180,600,000 of cash, full availability on our $350,000,000 credit facility and approximately $63,400,000 available under the $400,000,000 ATM program. We have no debt maturities to 2021, with our net maturity being our $100,000,000 term loan in 2022.
With regard to our dividend, on February 11, our Board of Directors declared a cash dividend of $0.185 per share for the Q1 of 2019, payable on April 15, 2019, to common stock and unitholders of record on March 29, 2019. Additionally, our Board of Directors declared a preferred stock cash dividend of approximately $0.37 per share for the Q1 of 2019 payable on March 29, 2019, to our preferred stockholders as of March 15, 2019. Finally, I'd like to introduce our outlook for 2019. Our guidance refers only for in place portfolio as of today and does not include any assumptions for acquisitions, dispositions or capital transactions, which have not yet been announced. For 2019, we expect to achieve company share core FFO within a range of $1.16 to $1.20 per share.
Please note that our guidance for core FFO does not include acquisition costs or other costs that we typically exclude when calculating this metric. Our guidance is supported by several factors. We expect year end same property occupancy within a range of 95.5 percent to 96.5 percent and year end stabilized same property within the range of 96.5 percent to 97.5 percent. We expect to achieve same property NOI growth for the year of 3.5% to 5.5 percent and stabilized same property NOI growth for the year of 3% to 3.5%. Please note that our 2019 same property pool comprises of 147 properties with an aggregate of 118,300,000 square feet, representing approximately 86% of our consolidated portfolio square footage.
This portfolio was 96% occupied at December 31, 2018. For G and A, we anticipate a full year range from $29,000,000 to $30,000,000 including about $10,200,000 of non cash equity compensation. 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 Our first question is from Jamie Feldman with Bank of America Merrill Lynch. Please proceed with your question.
Great. Thank you. I just want to start with a deal. Can you talk about what your same store guidance would be on a cash basis rather than GAAP?
Hi, Jamie. Good afternoon. So, the same property we guided on a GAAP basis, which was 3.5% to 5.5%. On a cash basis, that would be 5.5 percent to 7.5 percent, so 2 percentage points higher, which is also very much equivalent to what actually happened in 2018 if you take a look at the supplemental. The stabilized same property NOI growth, we are guiding to 3% to 3.5% on a basis.
On a cash basis, it would also be 5% on a low end and 5.5% on the high end, so also about 2 percentage points higher.
Okay. Thank you. And I know you talked about the leasing spreads contributing most kind of back half of the year, even Q4. Any thoughts on how same store should trend throughout the year by quarter?
Sure. Jamie, it's Adeel again. So as Michael pointed out, about 70% of the growth is backloaded and we talked backloaded in Q3 and Q4. And that's actually pretty typical to what we have seen in the past years as well. And about 40% of that growth is actually coming in Q4.
So it's typical to what we have seen. We have about 2,700,000 square feet expiration at the end of 2018 and our same store pool changed to about 83% of our consolidated portfolio. There's a lot of blocking and tackling throughout the year, so nothing no major leases, but we expect the ramp to pick up during the year and that's like I said very consistent with prior years.
Okay. Thank you. And then Howard, I know you mentioned the pipeline you're working on today. But as you just think about this year and even farther out, I mean, the composition of potential acquisitions or value add investments, what's the how much of it is more portfolio based versus single asset?
Well, if you think about the I mentioned we had $312,000,000 worth of transactions in progress. That's 13 separate transactions. So occasionally, you've seen this by a larger portfolio, but predominantly, our growth has come from a lot of the blocking and tackling we do every day on the one off transaction. And looking forward, there are some 1Z rather 2Z, 3Z kind of buildings portfolios for sale. We chased a couple of things last year that were larger that had some assets out of our markets and we weren't able to capture those.
But for the most part, I think it's business as usual going forward this year.
Okay. And what are you seeing on pricing? Has it been pretty firm or cap rates still going lower?
I think for the most part, you see marketed transactions that are trading in the 4% to 4.5% cap range, which really compares favorably to the repositioning results we had mentioned on the call where we're achieving 100 to 200 basis points higher in our spread. Prices move really in line with what's happening with rental rates. So rents have been growing significantly. Our leasing spreads have been very strong and the market itself had about 7% rent growth for the year in the infill markets. So pricing moves a little bit further ahead based on just that same rent growth.
Okay. And then a question for Michael. You had mentioned port volumes being at all time high. I mean, it sounds like some of the port volumes have been on pull forward ahead of tariff activity or concerns over tariff activity. Just if you think there if there was to be a pullback in port volumes, I know you guys have talked about being more of an infill portfolio.
What do you think the implications would be for Rexford if port volumes did actually decline in a meaningful way?
Hey, Jamie. Thanks and great question. We actually have seen great real world case studies where pork volumes did decline and that was during the Great Recession. And the short story is that our product and our tenants are really consumption driven and we've really never had a supply problem in Southern California even when port volumes decreased dramatically during the Great Recession. And we've seen port shutdowns due to labor both in 2014 and earlier I think in 2,002.
And we didn't see a we didn't even hear anything from our tenants during those. We had a port slowdown during labor unrest and due to lack of chassis for the trucks about 2.5 years ago. Again, we didn't hear anything from our tenants. And what we found during periods where the courts might have an issue is our tenants get creative, they figure out how to get the product in and they still strive to service the consumption driven demand in the region. Don't forget Southern California is the largest zone of consumption in the nation and it's very, very diversified.
And if you look at our tenant base, if you look at the portfolio of tenants that we have crafted, the construction of that portfolio has been very deliberate and diversified. So the sources of our cash flow from a tenant industry or type of business perspective are about as diversified as it can get. And so we haven't really seen any issue from the tariff so far. And in prior periods, we haven't seen an issue in the 47 issue.
And then what about just in terms of the impact on the regional economy and consumer spending, less about your tenants and more just about consumer spending in the region?
Absolutely. To the extent that consumers and businesses are spending less in the region, we're going to be impacted and you'll probably see an impact to rental rates, less of an impact to supply, but more of an impact to rental rate.
Our next question is from Blaine Heck with Wells Fargo. Please proceed with your question.
Thanks. Good morning out there. So just to follow-up on same store guidance, a few of your peers came out with a little more conservative guidance given some uncertainty in the market. So I guess I wanted to see whether there was any of that sort of consideration as you guys formulated your numbers for the year? Or in other words, how much of a consideration for external factors was built into your guidance versus kind of the current view of the portfolio performance assuming not much really changes with the economy?
Hey Blaine, thanks for the question. It's Michael. It's a great question. We really we try to give it to you as we see it. We can't really predict.
We're not economists, so we don't pretend to be. And frankly, we believe that we're paid to be more pessimist. That having been said, if we look forward at our portfolio, as the deal laid out, and as I mentioned in my prepared remarks, we've got a lot of blocking and tackling. We have most of our releasing contributions backloaded into the second half and a predominance of that in the 4th quarter. And a lot of our tenants are small, medium sized tenants.
So we don't get visibility oftentimes to their intentions until a month or 2 or 3 before their expiration date. So we don't pretend to deliver assumptions that we just can't know and we try to tell it as we see it.
Okay. That's helpful. And I guess not to back you in the corner, but to follow-up on that, looking at your top tenants page, you guys, as you said, don't really usually have too much in the way of chunky leases, but you do have Gendry on at the end of the year, which is 100 and 71,000 square feet and then much smaller, but still 40,000 square feet in November is Tricenic. Hopefully, I'm getting those names right. Do you guys have any sense of the probability of renewal at each of those?
Hi, Blaine, it's Howard. We do actually. We look at those larger leases pretty carefully. The top 20 tenants in the portfolio actually are about 1,220,000 square feet in terms of the top 20 that have expirations during 2019. And really just going down the list, from the conversations we're having or even some of the renewals that are about to happen right now, we see about 64% of those tenants, about 780,000 square feet in terms of high probability on renewal.
Okay. That's helpful. Last one for me. Adeel, your reported net debt to adjusted EBITDA has continued to come down over the year and at 3.6 times, I think is either the lowest it's ever been or close to it. How should we think about the target there?
If you guys look at this as a good level of leverage on an ongoing basis or maybe is there room to move that up during 2019 and get some more FFO growth without dilution from sales or ATM issuance?
Hey, Blayne. Thanks for the question. So, yes, that is the lowest we've seen and that's all by design. I think we've always stated that the balance sheet is certainly one of our competitive strengths and we've always tried really, really hard to manage that. So it strays as a strength for us and it's a strategic decision by the company.
Certainly, whenever we are looking at the balance sheet and we're looking at the horizon in terms of the acquisition pipeline, some of that is because of the VAT, when we're raising issue money on the ATM and so on and so forth. So there could be some timing differences from that perspective. But we certainly like to we like where we are. We like to continue to operate in that zone. We did in the last call, we did say that we like to maintain our leverage profile under 5.
And our long term leverage guidance hasn't really changed. But I think from our perspective, keeping the strength from a balance sheet perspective is going to continue to be a focal point for the company for the long term. And I think the final point that I'll add is that at the end of the year, we did end the quarter just from a cash perspective on what's available. So just so you can have the full picture, we had $180,600,000 of cash, dollars 350,000,000 on the facility and still a little bit left on the ATM program. Obviously, the ATM program is market driven and how we execute that, but at least there's a lot of capacity.
So we'll see what's ahead of us in terms of the pipeline and how we best deploy that capital from an accretive way.
Hey, Blaine, it's Michael. I'd like just to add to that briefly, because I think it's a very important question. I think when we see a company like Rexford that is delevering from a 5.4x to 3.6x debt to EBITDA ratio over the year and at the same time generate 16.7 percent FFO per share growth. Those are that's math that I think demonstrates a company that is performing exceptionally well and truly firing on all its cylinders. I mean, just to give you a sense of it, if we had just maintained the leverage throughout the year, you would have seen substantially higher FFO per share growth.
And so to deliver that very high level of FFO per share growth while simultaneously delevering the company, I think that encapsulates so many things about the value creation capability of this business.
Agreed. That's a great stat. Thanks guys.
Our next question is from Emmanuel Korchman with Citi. Please proceed with your question.
Hey, guys. Just thinking about acquisitions for another minute. I think one of your recent deals was another new build or another new park. How do you think about sort of that new, whether you call it merchant build or something else product and both pricing and competition for that product and upside versus the database that you've spoken about for a long time?
Hi, Men. Hey, it's Howard. That's a great question actually. We think about it really from a value perspective. And a lot of times when a developer is able to deliver a new building, it's taken quite a few years to be able to entitle a site and build it.
And a great example would be the property that we bought recently in Simi Valley on Surveyor that we stabilized, tenant moved in actually in January. And when we looked at the appreciation of the land that the developer bought it and the fact that they locked in their construction costs early on, we actually considered that we were buying the property for about 3% higher than replacement cost today. So we thought we were getting a great deal on a newly delivered building. And on that particular asset, we were able to stabilize it at a 5.7% yield. So I think the yield actually proved out that theory.
So from our perspective, if we have those types of opportunities in the future, we'll continue to take advantage of them.
And Howard, have you seen any changes in the in competition out in your markets buying these properties?
Well, we've always had a lot of competition here. Mean, it's no secret that Southern California is the top industrial market in the country. So everybody is here trying to fight their way into some acquisitions. What separates us obviously is our platform that puts a tremendous effort into our research and our ability to create off market transactions. In the Q4, actually 80% of the deals we bought were off market.
And for the year, 73% were off market. And if you look at the LOIs we wrote during the year, we wrote LOIs on $7,000,000,000 worth of product. It was about 2 eighty four LOIs, which means we had a 9% hit rate. If you really think about it, we're probably our own largest competitor in that we have the opportunity to buy many more assets than we buy due to our stringent underwriting. So we're very selective on what we buy.
And the bottom line is most of our competitors didn't really even get a look at those deals when I referenced 73% of them being off market. Thanks,
Howard. Our next question is from Michael Mueller with JPMorgan. Please proceed with your question.
Yes. Hi. Question going back to same store growth. So if I'm looking at the stabilized same property pool, it's 3% to 3.5% this year, it was 7.5% last year. And I'm just trying to connect some dots here because it seems like your rent spreads have gotten better throughout the year and it makes sense you're at 98 occupancy to assume a little bit of downdraft.
But even last year, occupancy was pretty flat throughout the year. So I'm just trying to figure out what the headwinds are from a number standpoint in 2019 for that metric where it's less than half of what it was last year, considering occupancy was flat last year as well?
Mike, hi, it's Adeel. So the occupancy, I think, was slightly lower. So we did have some gains from the occupancies that are not necessarily there this year in that manner. And the re leasing spreads are certainly something that Michael added in his script. We are assuming about an 11% blended growth cash on a cash basis in our numbers.
But I think the key thing here again is that you do have the burning of these are GAAP numbers as I stated earlier. These are being hampered by the fact that you have to burn off the Freeline rent and the last tranche and that vintage is certainly contributing to that little bit of headwind. So that's why the cash growth, which was asked earlier, is a 2 percentage point higher. So you're doing you are seeing that. And the last piece, which I think has been the case is that how the role takes place during the year, which is something that we talked about earlier as well, A lot of it is backloaded.
So you are seeing the impact of a lot of that stuff. That being said, we've had a good we've had great success in being able to do a good job in releasing over the course of last many quarters. So if the opportunity presents itself, hopefully, we can improve. But right now, this is where we see and we do a really bottoms up analysis looking lease by lease and that's what we feel most comfortable with right now.
Okay. And then for the 200 I think the number was 2 $66,000,000 of acquisitions since ninethirty. What was the going in yield on those? And then what was the anticipated stabilized yield?
Well, the 4th quarter acquisitions,
including what's that Mike? You do agree.
Yes. I'm sorry, including this year. Well, I can tell you, the 4th quarter ones, those transactions range from 5.4 to 6.4 as far as the stabilized yield. And I think the blended, including vacancy, initial yield was about 4.8% in terms of those 4th quarter transactions.
Got it. And should we assume something similar for the 1Q deals?
As Howard mentioned, I think on the call earlier, the 1Q deals going in is probably higher, because average is a little over 5%.
On the cash side?
Not initially, I'm sorry. Initially on the cash side, we did have some value add in there. So it's probably just under 5.
Okay. That was it. Thank you.
Our next question is from Chris Lucas with Capital One Securities. Please proceed with your question.
Hi, guys. Just a quick one. On the G and A guidance, sort of implies sort of upper teens year over year growth. Just curious as to maybe if you could provide some color as to what's driving that? Is it headcount?
Is it just comp? Is it investments in systems? What's sort of driving that? And is there a point in the scale of the business that we should start to see that growth diminish out?
Hi, Chris, it's Adeel. Thanks for the question. So our $30,000,000 in the upper range obviously includes the impact of the leasing standard. So there's about $1,300,000 coming and being added to that range. And if you compare that to last year reported GNF 25.2%, and if you add back the capitalization that took place last year, it's really a $26,200,000 G and A number that you need to compare.
So that's about a 14.5% delta, which is what you called out earlier on the high end and on the low end on the 29% is about a 9.7% increase. What we have stated in the past that we are in the final year of the laddering effect of the equity grants that were starting back in 2015 2016. That's what you're seeing here. So this is the last leg of those grants. And all else being equal, essentially, things will start to be not additive.
They will be steady state, obviously. You're assuming all else being equal from that perspective. That's a lion's share of the increase in 2019. There were some incremental hires that we did during 2018 and you're seeing the full impact in this year like in HR and certain marketing personnel. But other than that, a lot of it is just the non cash equity comp that's being added for the year.
Great. Thank you. Appreciate the color.
Ladies and gentlemen, we have reached the end of our question and answer session. I would like to turn the call back over to management for closing remarks.
Thank you. And on behalf of the entire Rexford team, we want to thank everybody for joining us today, and we wish you all a great Valentine's Day tomorrow. Thank you.
Thank you. This concludes today's conference. You may disconnect your lines at this time and thank you for your participation.