Rexford Pays $164M for Four More SoCal Properties
We’ve exhausted all the ways to say Rexford Industrial Realty is expanding its footprint in Southern California, but the firm continues to grow anyway.
The Los Angeles-based REIT announced this week that it acquired four more properties for $163.8 million in Los Angeles, Orange County and the Inland Empire. That brings the firm’s portfolio to 39 million square feet, representing a 2 percent market share in Southern California. Rexford has also made $774 million in acquisitions so far this year, and has another $600 million of additional investments under contract or accepted offer.
“These investments, acquired through off-market transactions, reflect our team’s ability to leverage its regional sharpshooter advantage and value-add expertise within infill Southern California, the nation’s lowest-supply and highest-demand industrial market,” co-CEOs Howard Schwimmer and Michael Frankel said in a joint statement.
The largest purchase of the four was at 14200-14220 Arminta Street in Panorama City in the San Fernando Valley. The 200,000-square-foot, Class A building traded for $90.2 million, or $451 per square foot. Rexford paid with $24.5 million of cash and 954,000 OP units, or partnership shares or stock, at a value of $68.84 per unit.
The property situated on 8.5 acres is leased long-term. The vacancy rate in the 181 million-square-foot San Fernando submarket was 0.5 percent at the end of the first quarter, according to CBRE (CBRE) research. The brokerage’s Michael Bogle represented Rexford and the seller, Powell Plaza Associates.
“This property sold at record pricing because of the incredibly low vacancy rate in the area and the quality of the tenant and the building,” Bogle said in a statement. “They have made an incredible amount of improvements to the space and are leasing it long-term. This was a true flight-to-quality play.”
In Compton, Rexford acquired the property at 2020 South Central Avenue for $10.8 million, or $110 per land square foot. The 2.3-acre site includes a 30,233-square-foot building fully leased at rent estimated to be approximately 60 percent below current market rates. When the lease expires, Rexford plans to redevelop the site with a new 45,000-square-foot, Class A industrial building. According to CBRE, the vacancy rate in the 219 million-square-foot South Bay submarket was 0.6 percent at the end of the first quarter.
In Orange County, Rexford bought the property at 1500 South Raymond Avenue in Fullerton for $45 million, or $143 per land square foot. The 7.2-acre site contains a recently shuttered hotel that will be redeveloped into a Class A warehouse with 138,500 square feet, and excess land for trailer and outdoor storage. According to CBRE, the vacancy rate in the 115 million-square-foot North Orange County submarket was 0.9 percent at the end of the first quarter.
Rexford’s Inland Empire buy was at 1172 Holt Boulevard in Ontario. The 44,000-square-foot, Class A building was completed last year and sold for $17.8 million, or $404 per square foot. It’s on 2.1 acres adjacent to the 1154 Holt Boulevard site that Rexford recently acquired.
The property is leased at rent estimated to be approximately 35 percent below current market rental rates. When the lease ends, Rexford will lease at market rates. According to CBRE, the vacancy rate in the 321 million- square-foot Inland Empire – West submarket was 0.1 percent at the end of the first quarter.
Gregory Cornfield can be reached at firstname.lastname@example.org.