Rexford Industrial Realty (NYSE: REXR) has made headlines recently due to a significant drop in its stock price, which has fallen by half. This drop has resulted in an appealing dividend yield of 4.2%. Despite the current market sentiment, the underlying business remains strong, making it a potential buy-and-hold opportunity for investors.
Understanding the Decline in Rexford’s Stock
While substantial stock price declines usually indicate severe underlying issues, such is not entirely the case with Rexford. The recent downturn can primarily be attributed to shifts in investor sentiment and typical market fluctuations. The pandemic saw a surge in online shopping, causing a spike in demand for warehouse space. Rexford, which mainly holds industrial properties in Southern California—a crucial hub for imports—initially benefited from this trend and saw its stock soar. However, as the world adapted to living with COVID-19, the excitement around e-commerce fulfillment stocks dissipated, leading to Rexford’s share price decline.
Rexford’s Core Business Remains Resilient
Although Rexford’s stock has decreased, the company itself continues to perform well. Its growth may have slowed, but it has not been drastically affected. A critical indicator to watch is the company’s ability to raise rents, which they have done successfully. In the third quarter of 2025, new leases were signed at rates 25.6% higher than previous rates, with renewal leases seeing a 26.5% increase. This indicates robust demand in their Southern California market, where vacancy rates are typically low and barriers to entry for new developments are high.
The recent financial results reflect a minor upward adjustment in the company’s full-year adjusted funds from operations (FFO) outlook, suggesting that Rexford remains on solid footing despite market volatility.
The Allure of Rexford’s Dividend Yield
Rexford’s 4.3% dividend yield is particularly attractive, especially considering the company’s history of consistent dividend growth over the past decade. This factor suggests that the stock is still undervalued in the eyes of many investors. While it may take time for Rexford to regain its former market enthusiasm, the potential for continued dividend growth remains high.
A Contrarian Perspective
Investors often follow market trends impulsively, leading to hasty decisions. Rexford’s experience during the pandemic illustrates how sentiment can quickly shift. For those willing to take a contrarian approach, investing in Rexford at this lower price point may present an opportunity to acquire a well-run, high-yield asset. While technology stocks and AI investments may dominate the current conversation, Rexford’s solid yield and fundamental business strength stand out as compelling reasons to consider this stock for long-term investment.
In conclusion, if you’re looking to keep updated on the latest developments in the stock market, visit Stock Market News. For those interested in effective stock portfolio management and retirement investment, consider exploring Stock Portfolio Management as a reliable service option.
