Rexford Industrial (REXR) achieved an extremely unusual discount to consensus NAV (Net Asset Value). Many REITs trade at large discounts, but it's very unusual for REXR to trade at such a large discount.

NAV represents the estimated value of the real estate after subtracting the net debt of the company.

This chart demonstrates the share price and consensus NAV over the last 5 years. Consensus NAV estimates have declined materially, but nowhere near as much as the price:

Source: TIKR.com

Rexford Price to NAV 5-Year Chart

This is the ratio for price to NAV. It’s pretty clear that the price to NAV ratio is pretty close to historic lows.

Source: TIKR.com

As a real estate analyst, I find REXR interesting at this large discount to NAV. I've written many deeper articles on Rexford. The industrial REIT is facing headwinds from weaker leasing demand for industrial real estate following several strong years. However, they still delivered respectable growth in FFO and AFFO per share. They consequences of shares trading at such a large discount to NAV is a much more attractive AFFO (Adjusted Funds From Operations) multiple and implied cap rate.

REXR is one of the positions in my portfolio, and I remain thoroughly bullish on it as a long-term choice.

In the short-term, price movements follow sentiment. Over the long term, the fundamentals have a huge impact. While I see the negative sentiment, I'm much more interested in the fundamentals.

REIT Dividends

Like most REITs (Real Estate Investment Trusts), REXR has an attractive dividend. Shares carry a solid 4% dividend yield and demonstrate strong growth in AFFO (the earnings metric for REITs). Investors in REITs should always be checking long-term AFFO growth as a measure of the company's ability to generate a growing stream of dividends.

Colorado Wealth Management Fund

This article is by Michael VanLoon. I'm better known for writing as Colorado Wealth Management Fund. Disclosure: I am long shares of REXR.

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