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Monday, Dec 4, 2023

Rexford Pays $661M for Industrial Assets

Brentwood-based Rexford Industrial Realty Inc. has acquired seven industrial properties for an aggregate purchase price of $661 million.
The purchases — which include properties in Commerce and the South Bay — were funded using a combination of cash on hand, proceeds from forward equity settlements and the company’s line of credit.

“These investments exemplify Rexford Industrial’s ability to capitalize upon its proprietary market access and unique regional sharpshooter advantage within infill Southern California, the nation’s highest-demand and lowest vacancy industrial market,” Howard Schwimmer and Michael Frankel, co-chief executive officers of the company, said in a statement. “Our $1.6 billion of investments year-to-date, of which approximately 85% were acquired through off-market or lightly marked transactions, are expected to generate substantially above-market stabilized returns on investment and drive accretive cash flow growth.”

“Our pipeline of over $500 million of additional investments under contract or accepted offer, combined with our low-leverage balance sheet and significant internal growth initiatives, create a deep well of value-creation opportunities positioned to drive long-term value accretion for our shareholders,” they added.

The local assets Rexford Industrial acquired in June and July include 6996 and 7044 Bandini Blvd. in Commerce, which were bought through an off-market transaction totaling $40.5 million, or $170 per land square foot.

The property includes contiguous parcels on 5.5 acres fronting the I-5 highway and is 100% leased to a single tenant.
Upon lease expiration, Rexford intends to drive accretive cash-flow growth through the renewal of the in-place tenant or through a future redevelopment. The investment is projected to generate a 4.8% unlevered stabilized cash yield on total investment.

The vacancy rate in the 271-million-square-foot LA – Central submarket was 0.7% at the end of the first quarter 2022, according to data from CBRE Group Inc.
Rexford also purchased a number of properties in the South Bay, the most expensive of which was an asset at 3547-3555 Voyager St. in Torrance ,which sold for $20.9 million. The three-acre site is occupied by a 60,248-square-foot industrial complex.

When current leases expire, Rexford plans to redevelop the site.
Also in the South Bay, Rexford purchased 400 W Rosecrans Ave. for $8.5 million. The 1-acre property has a vacant 28,006-square-foot building.

Rexford also purchased 620 E Anaheim St. for $17.1 million. It has a vacant building and spans roughly 2 acres. The South Bay submarket had a vacancy rate of 0.6% at the end of the first quarter, according to CBRE data.

Rexford also purchased properties in Simi Valley and the Inland Empire, including a warehouse in Jurupa Valley; a six-building industrial project in Eastvale that is located near seven Rexford-owned assets; and 3935-3949 Heritage Oak Court in Simi Valley, which was purchased through an off-market transaction for $56.4 million, or $302 per square foot.

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