12752 to 12822 Monarch Street, an industrial asset Rexford Industrial purchased earlier this year

Rexford Industrial is confident that its portfolio well positioned to perform through to imminent downturn. The Los Angeles-based REIT focuses on small, infill industrial assets in Southern California, which have a history of outperforming big box assets during recessions. On the company's first quarter earnings call, leadership discussed the portfolio's strength to weather the COVID-19 storm.

"While on a global scale, one might expect larger tenants to be more resilient than the smaller tenants, however, it has been demonstrated that our infill markets have outperformed the big box, large tenant base located in non-infill market," Michael S. Frankel—co-CEO and director of Rexford Industrial, said on the call. "While this may seem counterintuitive, we believe the historical data paints a clear picture. It is very instructive to consider how our infill tenant base in Southern California performed during prior downturns as compared to large tenants located in non-infill market."

The REIT experienced strong performance during the last downturn as well. Vacancy in the infill market portfolio increased by 100 to 150 basis points, while product in the Inland Empire—a market dominated by large big-box users—increased by double or triple. "We believe the greater resilience of our infill SoCal tenants is due to two key factors," says Frankel. "First, it is due to the extreme scarcity of available products, exceptionally high barriers, limiting supply and a persistent supply demand imbalance. Additionally, the resilient nature of these entrepreneurial tenants is driven by the fact that our spaces generally represent mission-critical locations required for their businesses and to support their livelihood. It is also helpful to consider how today's crisis may be similar or different from prior downturns such as the great financial crisis and how that may impact our recovery within infill Southern California."