REXFORD INDUSTRIAL REALTY, INC.
REXR
$37.83
-0.32%
Rexford Industrial Realty, Inc. is a self-administered equity REIT that owns, operates, and acquires industrial properties concentrated in high-barrier Southern California infill submarkets, generating essentially all of its revenue from rental income on a portfolio of warehouse, logistics, and light-industrial assets. The company is a pure-play niche operator rather than a diversified REIT, and its competitive identity rests on granular local market knowledge, a 256-employee lean operating model, and a value-add repositioning engine that seeks to capture embedded rent growth in supply-constrained infill locations where new development is nearly impossible. The current investor debate centers on a sharp deceleration in top-line growth — Q3 2026 revenue of $239.1 million fell 5.6% year over year — alongside a large non-cash fair-value impairment that drove a $506.9 million net loss in Q2 2026, raising questions about asset carrying values and cap-rate direction in Southern California industrial. Offsetting that overhang, the stock has staged a notable recovery from its mid-year lows, with a 4.5% one-month gain against a 5.0% decline in the S&P 500, and analysts have begun nudging estimates higher, including a Mizuho upgrade to Outperform in October 2026, suggesting the market is testing whether the worst of the markdown cycle is behind the REIT.…
REXR
REXFORD INDUSTRIAL REALTY, INC.
$37.83
Investment Opinion: Should I buy REXR Today?
Rating: Hold, with a constructive tilt toward accumulating on weakness. The core thesis is that REXR's 1.06x price-to-book already discounts most of the Southern California cap-rate damage — the multiple has compressed from 2.58x at year-end 2021 and 1.53x at year-end 2022 — while a 4.69% dividend yield and a conservative 0.41 debt-to-equity ratio provide a valuation floor, but the operating trend (-5.58% Q3 2026 revenue growth) has not yet turned, so there is no urgency to pay up at $37.80. The analyst tape supports patience rather than aggression: 6 of the 10 most recent actions are Buy/Outperform/Overweight with no outright Sells, including Mizuho's October 13, 2026 upgrade to Outperform, but consensus EPS of $1.23 implies only 3–5% earnings growth and no published price targets are available in the dataset to quantify upside.
Supporting evidence is mixed but skews toward downside protection over upside capture. Valuation is the strongest anchor: P/B of 1.06x, P/S of 8.97x, and EV/EBITDA of 19.26x — the EBITDA and sales multiples sit above the industrial REIT sector's typical 14–16x and 6–8x ranges, but the book multiple is at a five-year low and roughly in line with where premium industrial REITs have traded during cap-rate dislocations. Profitability at the property level remains intact, with gross margin of 76.2% in Q3 2026 versus a roughly 65–70% peer average and EBITDA margin of 49.1%, confirming the impairment noise is non-cash rather than operational. Cash generation is adequate but not generous: free cash flow of $262.4 million TTM against a $99.3 million quarterly dividend leaves dividend-paid-and-capex coverage at 0.98x, and the 199% GAAP payout ratio, while impairment-distorted, signals limited cushion. Sentiment is the swing factor — the +9.53-point one-month relative strength versus the S&P 500 and the stock's position at roughly 79% of its $32.47–$39.25 52-week range show buyers defending higher lows, but the trailing-year relative underperformance of -17.17 points confirms the longer trend is still broken.
The biggest risks that could invalidate this thesis are a renewed cap-rate shock forcing another round of fair-value impairments (Q2 2026 already carried a $609.0 million charge), continued revenue contraction beyond the -5.58% Q3 2026 rate, and dividend pressure if cash-flow coverage stays near 0.98x. This Hold would upgrade to Buy if revenue growth returns to positive territory or if P/B compresses toward 0.90x while the dividend is maintained, and it would downgrade to Sell if another material impairment is booked or if coverage falls below 0.90x. On balance the stock is fairly valued to modestly undervalued relative to its own five-year history but at a premium to peers on EBITDA and sales — a de-rated quality asset awaiting confirmation that the Southern California industrial cycle has bottomed, not a compelling growth story at today's price.
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REXR 12-Month Price Forecast
REXR presents a de-rated quality asset rather than a growth story: the 1.06x P/B reflects a market that has already marked down Southern California industrial values, and the 76.2% gross margin plus 49.1% EBITDA margin confirm the property-level economics remain intact beneath the $609.0 million Q2 2026 impairment. The problem is timing — revenue is still contracting at -5.58%, cash-flow dividend coverage of 0.98x leaves little cushion, and the 19.26x EV/EBITDA premium to peers is vulnerable if growth stays negative. The upgrade-heavy sell-side tape and +9.53-point one-month relative strength suggest sentiment has bottomed even as fundamentals have not, which argues for a neutral stance with a constructive bias rather than either a chase or an exit. I would upgrade to bullish if Q4 2026 revenue growth turns positive or a peer transaction confirms cap-rate stabilization, and downgrade to bearish if another material impairment is booked or coverage falls below 0.90x.
Wall Street consensus
Coverage is moderate with 5 analysts contributing estimates, and the institutional ratings tape shows a constructive tilt: of the 10 most recent actions, 6 are Buy/Outperform/Overweight (Truist Buy, Wells Fargo Overweight, Scotiabank Sector Outperform, Cantor Fitzgerald Overweight, Mizuho Outperform, BMO Outperform) against 3 Neutral/Market Perform (Citigroup, BNP Paribas, Raymond James) and no outright Sells. The consensus leans bullish, and the Mizuho upgrade from Neutral to Outperform on October 13, 2026, alongside Raymond James's move from Underperform to Market Perform on September 16, 2026, marks a clear pattern of positive estimate revisions rather than downgrades. Consensus EPS estimates average $1.23 (range $1.16–$1.32) on average revenue of $1.018 billion, implying roughly 3–5% earnings growth from the current run-rate; however, specific price targets are not disclosed in the provided dataset, so implied upside to a consensus target cannot be calculated — Data not available for average target price.\n\nThe estimate range itself is relatively tight — EPS spans $1.16 to $1.32, a spread of about 14% around the mean — which signals stronger-than-average conviction among covering analysts despite the impairment noise. The high end of $1.32 likely assumes successful lease-up of value-add repositioning projects, stabilization of Southern California rents, and no further cap-rate-driven impairments, while the low end of $1.16 appears to price in continued revenue contraction (Q3 2026 was already -5.6% YoY) and persistent mark-to-market pressure on the portfolio. With only 5 analysts covering a $9.0 billion market-cap REIT, coverage is thinner than mega-cap peers, which can amplify volatility and slow price discovery; the absence of published price targets in this dataset limits the ability to quantify the risk/reward skew, but the upgrade-heavy ratings trend and the stock's 9.5-point one-month relative outperformance suggest the sell-side is turning more constructive even as the fundamental data remain mixed.
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Bulls vs Bears: REXR Investment Factors
The bear case currently has stronger near-term fundamental evidence: revenue is contracting at -5.58% year over year, two consecutive quarters carried large fair-value impairments, and cash-flow dividend coverage of 0.98x is thin. The bull case rests on valuation and sentiment rather than growth — 1.06x book value, a 4.69% yield, a conservative 0.41 debt-to-equity ratio, and an upgrade-heavy analyst tape with no sells — and the +9.53-point one-month relative strength suggests the market is beginning to price in a bottom. The single most important tension is whether Southern California industrial cap rates and rents have stabilized: if they have, the impairment cycle is over and book value near 1.0x is a floor; if they have not, further markdowns would validate the bear case and pressure the dividend. On balance, the evidence favors a cautiously constructive stance, but only because the downside appears largely priced — not because the operating trend has turned.
Bullish
- P/B near 1.0x marks trough valuation: At 1.06x price-to-book, REXR trades at roughly its stated book value after the Q2 2026 impairments, versus 2.58x at year-end 2021 and 1.53x at year-end 2022. Historically this level has marked trough valuations for high-quality industrial REITs, implying the market has already discounted much of the asset-value risk.
- Upgrade-heavy analyst tape, no sells: Of the 10 most recent analyst actions, 6 are Buy/Outperform/Overweight and none are outright Sells, with Mizuho upgrading to Outperform on October 13, 2026 and Raymond James moving from Underperform to Market Perform. The tight EPS estimate range of $1.16–$1.32 (about 14% spread around the $1.23 mean) signals above-average conviction among the 5 covering analysts.
- Strong relative momentum off the lows: The stock is up 4.54% over the past month against a 4.99% decline in the S&P 500, a relative-strength gap of +9.53 points, the strongest reading in the dataset. Shares at $37.80 sit at roughly 79% of the $32.47–$39.25 52-week range, showing buyers are defending higher lows since the June trough.
- Conservative balance sheet and high margin: Debt-to-equity of 0.41 is conservative for a REIT, the current ratio of 7.16 reflects substantial liquidity, and gross margin held at 76.2% in Q3 2026, consistent with the 76–78% band over eight quarters and well above the roughly 65–70% peer average. EBITDA margin of 49.1% in Q3 2026 confirms solid property-level economics beneath the GAAP noise.
Bearish
- Revenue now contracting year over year: Q3 2026 revenue of $239.1 million fell 5.58% from $253.2 million a year earlier, extending sequential erosion from $245.1 million in Q1 and $245.5 million in Q2 2026. Consensus 2027 revenue of $1.018 billion implies only modest stabilization, so the growth story that historically justified the premium multiple has reversed.
- Impairments signal asset-value risk: A $609.0 million non-cash charge drove a $506.9 million net loss in Q2 2026, and Q4 2025 posted a $65.4 million loss on a $160.5 million charge, reflecting fair-value markdowns tied to Southern California cap-rate direction. These marks raise unresolved questions about whether carrying values have fully reset.
- Dividend coverage is thin on cash flow: Dividend-paid-and-capex coverage was 0.98x in Q3 2026, with $151.8 million of operating cash flow funding a $99.3 million quarterly dividend plus $56.0 million of capex only with help from asset-sale proceeds. The 199% payout ratio on GAAP earnings, while impairment-distorted, leaves little cushion if cap rates move adversely.
- Premium multiples versus peers: EV/EBITDA of 19.26x and P/S of 8.97x sit above the industrial REIT sector's typical 14–16x EBITDA and 6–8x sales ranges. If growth remains negative, that premium is vulnerable to compression even after the de-rating from 2021–2022 levels.
REXR Technical Analysis
REXR is in a recovery phase within a longer-term downtrend, having fallen 7.58% over the trailing year while the S&P 500 gained 9.59%, a relative-strength gap of -17.17 percentage points. The stock's 52-week range spans roughly $32.47 (the June 17, 2026 close) to $39.25 (the November 4, 2026 close), and at $37.80 the shares sit at approximately 79% of that range — closer to the highs than the lows, but still 3.7% below the recent peak. That positioning suggests momentum has repaired meaningfully from the summer trough without yet confirming a full trend reversal, leaving the stock in a technically constructive but unconfirmed posture.\n\nShort-term momentum is clearly positive and diverging from the weak one-year trend: the stock is up 4.54% over the past month, 2.89% over three months, and 4.22% over six months, versus a 3.15% year-to-date decline. The one-month relative strength of +9.53 percentage points against SPY is the strongest reading in the dataset and signals genuine rotation into the name rather than beta-driven drift. The July 24 spike to $39.00 on elevated volume marked the first major accumulation event, and the October 23 move to $38.71 followed by the November 4 close of $39.25 suggests buyers are defending higher lows; however, the failure to hold above $39.25 and the subsequent pullback to $37.80 introduces a short-term overbought risk given the rapid 4.5% monthly advance.\n\nKey technical levels are well defined: support sits at the $36.00–$36.50 shelf that has repeatedly absorbed selling in August and October, with the ultimate floor at the $32.47 June low, while resistance is the $39.25 November high, a breakout above which would target the psychologically significant $40 handle and confirm a higher-high structure. A breakdown below $36.00 would invalidate the recovery and refocus attention on the $32–33 base. Volatility is meaningful — the maximum drawdown over the period was -26.64%, and the stock's 1-year relative underperformance of 17.17 points versus SPY implies a beta well above 1, meaning position sizing should account for amplified moves in both directions relative to the broader market.
Beta
—
—
Max Drawdown
-26.6%
Largest decline past year
52-Week Range
—
Price range past year
Annual Return
-10.4%
Cumulative gain past year
| Period | REXR Return | S&P 500 |
|---|---|---|
| 1m | +0.9% | -2.4% |
| 3m | +3.9% | -2.3% |
| 6m | +8.9% | +2.8% |
| 1y | -10.4% | +11.3% |
| ytd | -3.1% | +11.4% |
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REXR Fundamental Analysis
Revenue is decelerating and now contracting: Q3 2026 revenue of $239.1 million declined 5.58% year over year from $253.2 million in Q3 2025, extending a pattern of sequential erosion from $245.1 million in Q1 2026 and $245.5 million in Q2 2026. The trailing four-quarter revenue base of roughly $970 million reflects a portfolio that is shrinking on a same-store basis, likely due to asset sales, tenant vacates, or mark-to-market pressure in Southern California industrial — a notable reversal from the growth story that historically supported the premium multiple. Consensus 2027 revenue estimates of $1.018 billion imply only modest stabilization, so the investment case now hinges on whether rent growth reaccelerates rather than on the double-digit NOI growth that defined the prior cycle.\n\nProfitability is bifurcated between operating fundamentals and GAAP earnings: Q3 2026 net income was just $17.4 million (7.3% net margin) on $94.2 million of operating income (39.4% operating margin), while gross margin held steady at 76.2%, consistent with the 76–78% band maintained over the past eight quarters. The headline distortion comes from Q2 2026, when a $609.0 million non-cash other-expense charge drove a $506.9 million net loss and -206.5% net margin, and Q4 2025 similarly posted a $65.4 million loss on a $160.5 million charge — both reflecting fair-value impairments rather than cash operating deterioration. Excluding these marks, EBITDA of $117.3 million in Q3 2026 (49.1% EBITDA margin) and $194.1 million in Q1 2026 (79.2% margin) demonstrate that the underlying property-level economics remain solid, though the trailing PE of 45.0x and ROE of just 2.51% underscore how much GAAP earnings have been suppressed by valuation adjustments.\n\nThe balance sheet is the strongest part of the story: debt-to-equity of 0.414 is conservative for a REIT, the current ratio of 7.16 reflects substantial liquidity, and interest coverage of roughly 3.8x on $24.8 million of quarterly interest expense is adequate though tighter than the 6–10x seen in 2023–2024. Free cash flow of $262.4 million TTM covers the $99.3 million quarterly dividend (a 4.69% yield) only partially — the payout ratio of 199% on GAAP earnings is distorted by impairments, but dividend-paid-and-capex coverage of 0.98x in Q3 2026 shows the company is funding distributions and $56.0 million of quarterly capex largely from operating cash flow of $151.8 million plus asset-sale proceeds. The $1.15 billion of investing inflows in Q3 2026, paired with $499.2 million of debt repayment and $308.9 million of buybacks, indicates active capital recycling that supports NAV but leaves less cushion if cap rates move adversely.
Quarterly Revenue
$239103000.0B
2026-09
Revenue YoY Growth
-5.6%
YoY Comparison
Gross Margin
76.2%
Latest Quarter
Free Cash Flow
$262414000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
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Valuation Analysis: Is REXR Overvalued?
Because trailing net income is positive but heavily distorted by impairments, the PE ratio is the appropriate lead metric but must be interpreted with care: the trailing PE of 45.0x is inflated by depressed GAAP earnings, while the forward PE of -1.59x is not economically meaningful given the negative PEG input and should be disregarded. The more informative multiples are price-to-book of 1.06x, price-to-sales of 8.97x, and EV/EBITDA of 19.26x — the P/B near 1.0x is the key signal, indicating the market values REXR at roughly its stated book value after the impairments, a level that historically has marked trough valuations for high-quality industrial REITs.\n\nAgainst industrial REIT peers, REXR's 19.26x EV/EBITDA and 8.97x P/S sit at a premium to the sector's typical 14–16x EBITDA and 6–8x sales ranges, reflecting the scarcity value of infill Southern California land and the company's superior 77.3% gross margin versus the roughly 65–70% peer average. However, the 1.06x P/B represents a meaningful discount to the 1.5–2.5x book multiples REXR commanded in 2021–2022 and is roughly in line with or below where premium industrial REITs like Prologis have traded during cap-rate dislocations, suggesting the market is pricing in asset-value risk rather than growth. The 4.69% dividend yield, well above the REIT sector average of roughly 3.5–4.0%, provides a valuation floor argument for income-oriented buyers.\n\nOn its own history, REXR is near the bottom of its valuation band: the P/B of 1.06x compares with 2.58x at year-end 2021, 1.53x at year-end 2022, and 1.06x at year-end 2025, while the P/S of 8.97x is far below the 56–93x readings of 2021–2022 (though those were distorted by the pre-impairment earnings base). The trailing PE of 45.0x looks elevated versus the 18–35x range of 2024–2025, but that is an artifact of the Q2 2026 impairment compressing the earnings denominator; on a normalized cash-flow basis, the 16.6x price-to-cash-flow and 1.06x book value place the stock in the lower quartile of its five-year valuation range, consistent with a market that has de-rated the name for slower growth and cap-rate uncertainty rather than fundamental deterioration.
PE
45.0x
Latest Quarter
vs. Historical
Mid-Range
5-Year PE Range 19x~88x
vs. Industry Avg
28.7x
Industry PE ~28.7x*
EV/EBITDA
19.3x
Enterprise Value Multiple
Investment Risk Disclosure
Financial and operational risks center on the revenue contraction and impairment cycle. Q3 2026 revenue of $239.1 million was down 5.58% year over year, the third consecutive quarter of sequential erosion, and the Q2 2026 $609.0 million non-cash charge produced a $506.9 million net loss (-206.5% net margin) that leaves open the question of whether carrying values have fully reset. Dividend coverage is the tightest financial constraint: dividend-paid-and-capex coverage of 0.98x in Q3 2026 means distributions and $56.0 million of quarterly capex are funded partly by asset-sale proceeds, and interest coverage of roughly 3.8x on $24.8 million of quarterly interest expense is adequate but tighter than the 6–10x seen in 2023–2024. The portfolio's concentration in Southern California infill industrial — essentially all revenue is rental income from this single regional market — means a regional rent or vacancy shock hits the entire top line with no diversification offset.
Market and competitive risks are dominated by valuation compression and rate sensitivity. EV/EBITDA of 19.26x and P/S of 8.97x sit at a premium to the sector's 14–16x and 6–8x ranges, so any further growth disappointment leaves room for multiple contraction even after the de-rating from 2.58x book in 2021 to 1.06x today. The stock's one-year relative underperformance of 17.17 points versus the S&P 500 and a maximum drawdown of -26.64% imply a beta well above 1, meaning REIT-sector rotation or a rise in long-term rates would hit REXR harder than the market. Competitive pressure comes from tenants pushing back on rents in a softer logistics demand environment, and the value-add repositioning engine depends on lease-up that the current revenue trend does not yet confirm; the absence of published price targets in the dataset also limits visibility into how the sell-side is framing downside.
The worst-case scenario is a renewed cap-rate shock in Southern California industrial that forces another round of fair-value impairments, compresses book value below the current 1.06x P/B anchor, and pressures the dividend as cash-flow coverage stays near 0.98x. In that chain, revenue keeps contracting past the -5.58% Q3 2026 rate, analysts reverse the recent upgrades, and the stock retests its June 17, 2026 low of $32.47 — a decline of roughly 14% from the current $37.80. A more severe outcome, consistent with the -26.64% maximum drawdown already experienced, would take shares toward the high-$27s, a loss of about 27% from here; the $32.47 52-week low is the most realistic quantified downside reference given the absence of disclosed analyst bear targets.
FAQ
The most severe risk is a renewed cap-rate shock in Southern California industrial forcing another round of fair-value impairments — Q2 2026 already carried a $609.0 million non-cash charge that produced a $506.9 million net loss, and Q4 2025 had a $160.5 million markdown, so carrying values may not have fully reset. Second is the revenue trajectory: Q3 2026 revenue of $239.1 million fell 5.58% year over year with sequential erosion from $245.1 million in Q1, and continued contraction would undermine the premium 19.26x EV/EBITDA multiple. Third is dividend sustainability, since dividend-paid-and-capex coverage of 0.98x in Q3 2026 means the $99.3 million quarterly distribution and $56.0 million of capex are funded partly by asset-sale proceeds, with a 199% GAAP payout ratio leaving little cushion. Fourth is market and rate sensitivity: the -17.17-point one-year relative underperformance versus the S&P 500 and -26.64% maximum drawdown imply a beta well above 1, so REIT-sector rotation or rising long-term rates would hit REXR harder than the market, and the stock's rapid 4.5% monthly advance leaves it vulnerable to a pullback below the $36.00–$36.50 support shelf.
The 12-month forecast is anchored by three scenarios: a 55% probability base case of $37–$41, a 25% probability bull case of $42–$45, and a 20% probability bear case of $30–$33. The base case assumes revenue stabilizes near the consensus 2027 estimate of $1.018 billion with no further material impairments, consensus EPS of $1.23 (range $1.16–$1.32) is delivered, the 4.69% dividend is maintained with coverage near 1.0x, and the shares oscillate between the $36.00–$36.50 support shelf and the $39.25 November 2026 high. The bull case requires Southern California rents to stabilize and cap rates to stop widening, allowing the 1.06x P/B discount to close toward the 1.3–1.5x range seen in 2022–2023, while the bear case assumes another impairment on the scale of the $609.0 million Q2 2026 charge and a retest of the $32.47 June 2026 low. The base case is most likely because the valuation floor at book value and the upgrade-heavy analyst tape suggest sentiment has bottomed, but the key assumption — no further material impairments — is exactly what the bear case challenges.
The answer depends on the metric, which is the central tension in REXR's valuation debate. On book value the stock looks cheap: 1.06x P/B is a five-year trough versus 2.58x at year-end 2021 and 1.53x at year-end 2022, and it sits roughly at stated book value after the Q2 2026 impairments, implying the market has already discounted asset-value risk. On cash-flow multiples it looks expensive: 19.26x EV/EBITDA and 8.97x P/S sit above the industrial REIT sector's typical 14–16x and 6–8x ranges, a premium justified by 76.2% gross margins versus a roughly 65–70% peer average but vulnerable if growth stays negative. The 45.0x trailing PE is an artifact of impairment-depressed earnings and should be disregarded, as should the -1.59x forward PE, which is not economically meaningful. Net-net, the stock is fairly valued to modestly undervalued relative to its own history but at a premium to peers on EBITDA and sales — the market is pricing a cycle bottom, not growth, and the 4.69% yield versus a roughly 3.5–4.0% sector average provides a floor argument.
From a risk/reward perspective, REXR offers a modestly asymmetric setup but not a compelling one: at $37.80 the stock sits roughly 79% of its $32.47–$39.25 52-week range, with downside to the June low of about -14% and a deeper -26.64% drawdown precedent, against a bull-case range of $42–$45 implying 11–19% upside plus the 4.69% yield. The valuation anchor is supportive — 1.06x price-to-book is a five-year trough versus 2.58x in 2021 and 1.53x in 2022 — and the analyst tape is constructive with 6 of 10 recent actions Buy/Outperform and no Sells, including Mizuho's October 13, 2026 upgrade to Outperform. However, no published price targets are available in the dataset to quantify consensus upside, and the operating trend is still negative at -5.58% revenue growth with thin 0.98x dividend coverage. It is a reasonable buy for income-oriented investors seeking a 4.69% yield with a valuation floor and a 12–24 month horizon, particularly on pullbacks toward the $36.00–$36.50 support shelf, but it is not a good buy for growth investors or anyone needing near-term earnings momentum.
REXR is better suited to a medium-to-long-term holding period of at least 12–24 months than to short-term trading. The company is in a mature, capital-intensive stage — 256 employees, a $9.0 billion market cap, and revenue that is contracting rather than compounding — so the return case rests on a 4.69% dividend yield plus a book-value re-rating from 1.06x rather than on rapid earnings growth. Volatility is meaningful: the -26.64% maximum drawdown and -17.17-point one-year relative underperformance versus the S&P 500 imply a beta well above 1, and the stock's rapid 4.5% monthly advance against a 4.99% S&P decline raises short-term overbought risk below the $39.25 resistance, making short-term trading a bet on technical levels rather than fundamentals. Earnings visibility is moderate — the tight $1.16–$1.32 EPS estimate range around the $1.23 mean signals analyst conviction, but only 5 analysts cover the name and no published price targets are available. A concrete minimum holding period of 12 months is appropriate to capture at least one full impairment-and-lease-up cycle and the quarterly dividend stream, with a 24-month horizon preferred to allow cap-rate stabilization to play out.