With the announcement that it has acquired seven properties totaling $661 million in value, Rexford Industrial Realty has closed $1.6 billion in industrial acquisitions this year in infill Southern California markets and could surpass $2 billion in purchases by year’s end.
The acquisitions, which occurred in four submarkets, were funded with a combination of cash on hand, proceeds from forward equity settlements and the Los Angeles-based company’s line of credit.
The latest deal news comes less than a month after Rexford Industrial announced it had acquired six industrial assets in infill Southern California submarkets for a total of $218.4 million. Earlier in June, the company said it had purchased four Southern California industrial properties for $163.8 million as it continues its strategy to acquire value-add properties throughout Southern California, an industrial market with the lowest supply and highest demand.
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Howard Schwimmer and Michael Frankel, co-chief executive officers of the industrial REIT, said in a prepared statement approximately 85 percent of the $1.6 billion in investments year-to-date were acquired through off-market or lightly marketed transactions. The executives said the transactions are expected to generate substantially above-market stabilized returns on investment and drive accretive cash flow growth.
Schwimmer and Frankel said the company has a pipeline of more than $500 million of additional investments under contract or accepted offers. They said that pipeline combined with the company’s low-leverage balance sheet and significant internal growth initiatives creates a deep well of value-creation opportunities that are positioned to drive long-term value for shareholders.
Expanding industrial portfolio
The biggest deal of this set of transactions, which closed during June and July, was a six-building industrial project located at 6221 and 6251 Archibald Ave. and 14301, 14319, 14337 and 14326 Limonite Ave. in Eastvale, Calif., within the Inland Empire-West submarket. Rexford Industrial paid $470 million, or $445 per square foot, for the newly constructed, 1.1 million-square-foot industrial complex. Situated on 49.7 acres, the complex is 71 percent leased and has buildings ranging from 48,315 square feet to 501,649 square feet. The buildings have minimum clear heights of 30 to 40 feet.
The property is located within close proximity to seven Rexford Industrial-owned assets and will help the company expand its presence and operating scale in the highly desirable industrial submarket. The vacancy rate in the Inland Empire-West submarket, which has about 321 million square feet of industrial space, was 0.1 percent at the end of the first quarter of 2022, according to CBRE.
The remaining assets are:
- 4325 Etiwanda Ave., Jurupa Valley, Calif., also in the Inland Empire-West submarket, which was acquired through an off-market transaction for $47.5 million, or $382 per square foot. The 124,258-square-foot Class A building is located on approximately 6 acres and leased to a single tenant.
- 3935-3949 Heritage Oak Court, Simi Valley, Calif., located on nearly 11 acres in the LA-Ventura County submarket, was acquired through an off-market transaction for $56.4 million, or $302 per square foot. The Class A 186,725-square-foot building, which is leased to two tenants, was acquired through a short-term sale-leaseback. The vacancy rate in the LA-Ventura County submarket, which has 67 million square feet of industrial space, was 0.6 percent at the end of the first quarter, according to CBRE.
- 3547-3555 Voyager St., Torrance, Calif., located on 3 acres in the LA-South Bay submarket, was acquired through an off-market transaction for $20.9 million, or $162 per land square foot. The property has a 60,248-square-foot multi-tenant industrial complex. Following lease expirations, Rexford Industrial plans to redevelop the site. The vacancy rate in the LA-South Bay submarket, which has 219 million square feet of industrial space, was 0.6 percent at the end of the first quarter, CBRE reported.
- 400 W. Rosencrans Ave., Los Angeles, also in the LA-South Bay submarket, was purchased for $8.5 million, or $193 per land square foot. The vacant 28,006-square-foot building is situated on 1 acre.
- 620 E. Anaheim St., Los Angeles, also in the LA-South Bay submarket, was acquired for $17.1 million, or $495 per square foot. The vacant 34,555-square-foot building is situated on approximately 2 acres. It has a large, secured yard and is strategically located adjacent to the Ports of Los Angeles and Long Branch.
- 6996 and 7044 Bandini Blvd., in Commerce, Calif., within the LA-Central submarket was purchased through an off-market transaction for $40.5 million, or $170 per square foot. The property included two contiguous parcels on 5.5 acres fronting the I-5 highway and is fully leased to a single tenant. Upon lease expiration, the company will either renew the existing tenant’s lease or redevelop the property. The vacancy rate in the LA-Central submarket, which has 271 million square feet of industrial space, was 0.7 percent at the end of the first quarter, according to CBRE.