Baron Funds, an investment management company, released its “Baron Real Estate Fund” first quarter 2024 investor letter. A copy of the same can be downloaded here. The fund had a strong performance in the quarter and generated a gain of 8.28% (Institutional Shares). The Fund beat both the MSCI US REIT Index (the REIT Index), which declined 0.62% and the MSCI USA IMI Extended Real Estate Index (the MSCI Real Estate Index), which rose 6.59%, respectively. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Baron Real Estate Fund featured stocks like Rexford Industrial Realty, Inc. (NYSE:REXR) in the Q1 2024 investor letter. Rexford Industrial Realty, Inc. (NYSE:REXR) is a real estate investment trust focusing on industrial properties. On April 24, 2024, Rexford Industrial Realty, Inc. (NYSE:REXR) stock closed at $42.54 per share. One-month return of Rexford Industrial Realty, Inc. (NYSE:REXR) was -14.61%, and its shares lost 21.58% of their value over the last 52 weeks. Rexford Industrial Realty, Inc. (NYSE:REXR) has a market capitalization of $9.591 billion.
Baron Real Estate Fund stated the following regarding Rexford Industrial Realty, Inc. (NYSE:REXR) in its first quarter 2024 investor letter:
“The shares of industrial REIT Rexford Industrial Realty, Inc. (NYSE:REXR), a high-growth REIT that owns a $13 billion portfolio of industrial real estate properties concentrated in Southern California, declined in the first quarter primarily due to concerns that demand and rent growth remain challenged in Southern California.
We expected a moderation in rent growth from Rexford’s frenzied pace of the last few years following the more than 100% increase in rents in Rexford’s markets since the beginning of 2020. We believe rents may rebound in the second half of 2024 and remain optimistic about the long[1]term prospects for the company.
In our opinion, Rexford has one of the best long-term growth opportunities among all publicly traded REITs. The company has two significant prongs for long-term growth. First, the management team has an irreplaceable portfolio of 46 million square feet of industrial real estate and its in-place rents on signed leases are approximately 50% below market. As such, the company has line of sight to at least 50% growth as it adjusts rents up to market levels over the next four to five years. Second, Rexford’s management team is pursuing acquisitions of additional square footage within its 1.8 billion square foot market. Through acquisitions, we believe management could double the size of its portfolio over time. Many of the industrial properties that Rexford is targeting are industrial real estate assets owned by individuals who have managed their real estate passively for decades; in many cases they have not increased rents consistently. That is a key opportunity for Rexford – acquire assets, upgrade the properties, and begin to increase rents.”
Aerial view of industrial properties reflecting different cityscapes of Southern California.
Rexford Industrial Realty, Inc. (NYSE:REXR) is not on our list of 30 Most Popular Stocks Among Hedge Funds. At the end of the fourth quarter, Rexford Industrial Realty, Inc. (NYSE:REXR) was held by 29 hedge fund portfolios, compared to 26 in the previous quarter, according to our database.
We previously discussed Rexford Industrial Realty, Inc. (NYSE:REXR) in another article, where we shared the list of low-risk high reward stocks set to triple by 2027. In addition, please check out our hedge fund investor letters Q1 2024 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.