Rexford Adds Another Office-to-Industrial Project in LA
The firm plans to replace an office with 182,000 square feet of warehouse space
By Greg Cornfield March 28, 2022 7:10 pm
reprints
With such tight vacancy and little available land in Los Angeles, developers continue to look at office-to-industrial conversions.
Los Angeles-based Rexford Industrial Realty paid $42 million for 231,769 square feet of flex office space in the suburban neighborhood of Chatsworth. That’s about $181 per square foot for the office, or about $106 per land square foot.
Property records for 21415-21615 Plummer Street show that it was owned by an entity tied to Laramar Development and Lakeside Capital Advisors, which acquired the site for $29.1 million 2017.
CBRE (CBRE) and Rexford announced the deal.
The two-building, low-rise campus covers 9.1 acres of industrial-zoned land. It’s currently 85 percent leased to two tenants, including the County of L.A., which has been at the property since 2000. Upon lease expirations, Rexford intends to redevelop the site by removing the existing office structures and constructing two Class A warehouse buildings, totaling 182,000 square feet.
“The strong in-place income from the existing office tenants, and the ability to repurpose the site to industrial should the office tenants leave, offered a compelling opportunity for Rexford to expand their presence in the San Fernando Valley,” said Mike Longo, part of the CBRE team that represented the seller.
The unprecedented demand for infill warehouse distribution space in Southern California, coupled with the accelerated rent growth for Class A distribution space is forcing investors to get creative and redevelop low-rise surface-parked suburban office buildings into state-of-the-art industrial locations, according to CBRE research. The vacancy rate in the 180 million-square-foot San Fernando Valley submarket was 0.6 percent at the end of the fourth quarter in 2021.
“Strong demand for Class A industrial space is creating a unique opportunity to redevelop low-rise office-to-industrial infill locations,” said Shaffer.
The Rexford real estate investment trust owns about 35 million square feet of industrial properties with a value of about $13 billion. Early this month, Rexford added 53,651 square feet in Central Los Angeles for $28 million.
Gregory Cornfield can be reached at gcornfield@commercialobserver.com.
