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December 15, 2018
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Rexford Industrial Realty Completes Six Deals Totaling $100 Mil


SoCal-based Rexford Industrial Realty Inc recently closed six deals in the region, consisting of four industrial acquisitions totaling $69.6 mil, and two dispositions worth a combined $30.6 mil. The acquisitions were funded using cash on hand, draws on the company's line of credit and proceeds from the two dispositions.

The company acquired 687 Eucalyptus Avenue, located in Inglewood in the Los Angeles West Los Angeles/South Bay submarket, for $53.9 mil, or $376 per square foot. The single-tenant industrial building contains 143.4k sf on 6.79 acres of land and is 100% leased to Federal Express Corporation.

The recently completed build-to-suit features 32-foot clear height, ESFR sprinklers and LEED certification. The property is the closest modern distribution facility to service last-mile e-commerce delivery within this densely populated West Los Angeles submarket. Industrial supply is extremely limited in West Los Angeles, having been cannibalized by demand for creative office space and multifamily development, resulting in increased building conversions and removal of the industrial supply.

Also in the Los Angeles South Bay submarket, Rexford acquired a two-property portfolio consisting of 15401 S. Figueroa St and 13225 S. Western Ave, located in Gardena for $6.7 mil, or $112 per square foot. 15401 S. Figueroa St contains 38.6k sf on 1.62 acres of land and 13225 S. Western Ave contains 21k sf on 0.95 acres of land.

The two single-tenant buildings are both 100% leased at substantially below-market rents to occupants with less than six months average lease term remaining. According to CBRE, the vacancy rate in the 222 msf Los Angeles South Bay submarket was 0.8% at the end of the third quarter 2017.

In addition, the company acquired an improved land site at 8542 Slauson Ave in Pico Rivera, in the Los Angeles Central submarket, for $9 mil, or approximately $49 per square foot of land. The low-coverage single-tenant property consists of a 24.7k sf industrial building on 4.24 acres of land.

The property is currently 100% leased at rates significantly below-market to a publicly traded tenant and is well located near the I-5 and I-605 highways within a neighborhood that is experiencing increased redevelopment. According to CBRE, the vacancy rate in the 287 msf Los Angeles Central submarket was 1.6% at the end of the third quarter 2017.

On the sales side, the firm 12345 First American Way in the Central San Diego submarket for approximately $7.6 mil, or $190 per square foot. The highly improved single-tenant industrial property contains 40k sf on 2.67 acres of land and was sold at a premium to an owner-user.

In a separate transaction, the company sold 9401 DeSoto Ave in the western San Fernando Valley for $23 mil, or $152 per square foot. The recently repositioned industrial property was sold vacant at a premium owner-user value.

Proceeds from both asset sales were recycled in a tax deferred 1031 exchange to fund a portion of the Eucalyptus Avenue acquisition. Year to date, the company has completed approximately $96.2 mil of dispositions with all of the proceeds used to fund acquisitions.

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