Rexford Industrial Adds 1.6M SF of Warehouse Leases in Q3
The REIT’s revenue this past quarter increased by 17.7% year-over-year.
By Nick Trombola October 17, 2024 3:42 pm
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One of the largest owners of industrial space in Southern California continued to hum along at a strong pace this past quarter, particularly in its leasing activity compared to the rest of the region.
Los Angeles-based real estate investment trust Rexford Industrial Realty announced Thursday during its third-quarter earnings call that it leased nearly 1.6 million square feet in the third quarter, including 56 new leases and 52 renewals. The REIT’s portfolio, excluding properties undergoing value-add repositioning, was 97.8 percent leased — a 20 basis point decline from the previous quarter, but far better than the Inland Empire’s average vacancy rate of 6.8 percent, according to a recent report by CBRE (CBRE).
Although the firm’s tenants have generally grown more hesitant in pulling the trigger on new leases due to uncertain economic, political and geopolitical conditions, Rexford’s co-CEO Michael Frankel said during the call that uncertainty has not broadly affected the firm’s leasing activity.
“Tenants are slowing leasing decision-making, but we’re not seeing any big surprises from the tenant base,” Frankel said.
Indeed, Rexford’s positive absorption of nearly 394,000 square feet well outperformed that of the region’s negative absorption of 234,000 square feet. One of its more notable leases this past quarter was cosmetics manufacturer Voyant Beauty’s August deal for 180,000 square feet in Chatsworth, in Los Angeles’ San Fernando Valley.
In terms of transactions, Rexford acquired two properties over the previous three months in L.A. County totaling 271,205 square feet for $60.5 million. And just after the end of the third quarter, the REIT also purchased a 278,650-square-foot facility in San Bernardino County in the Inland Empire for $70.1 million.
The firm has spent $1.4 billion on 4.3 million square feet of buildings year-to-date, thanks largely to a $1 billion deal with Blackstone (BX) in March. That compares to the $1.2 billion it spent on 3.1 million square feet by this point in 2023. The firm held an outstanding debt of $3.4 billion as of Sept. 30, consistent with the second quarter of this year, with no consequential maturities until 2026.
Rexford reported $241.8 million in revenue this past quarter, a year-over-year increase of 17.7 percent. It is also a 1.8 percent increase over the $237.6 million seen in the second quarter of 2024.
“As we look ahead, we believe our extensive value-creation opportunity and favorable supply-demand dynamics inherent within our infill Southern California target market will continue to provide a significant runway to deliver high-quality, accretive cash flow growth for our stakeholders,” Frankel and co-CEO Howard Schwimmer said in a statement.
Nick Trombola can be reached at ntrombola@commercialobserver.com.
