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Rexford Industrial Realty Spends $100 Mil on Two SoCal Acquisitions

12/13/19

Rexford Industrial Realty has closed on the acquisition of two SoCal industrial properties in purchases that totaled $99.7 mil. The investments were funded using cash on hand.

In the larger buy, Rexford acquired Pomona Distribution Center, located at 1601 W. Mission Blvd in Pomona, within the LA San Gabriel Valley submarket, for $87.8 mil, or $117 per square foot. The property comprises a two-tenant industrial building containing 751.5k sf on 32.2 acres of land and is fully leased to two tenants at rents estimated to be well below market rates.

Upon expiration of the existing leases, the company intends to drive cash flow by increasing rents to higher market rates and by completing value-add functional and cosmetic upgrades, which may include further demising of existing spaces. According to CBRE, the vacancy rate in the 154 msf LA San Gabriel Valley submarket was 1.4% at the end of the third quarter 2019.

Rexford also acquired 2757 E. Del Amo Blvd, located in Rancho Dominguez within the LA South Bay submarket, for $11.9 mil, or $207 per square foot. The property comprises a fully leased single-tenant industrial building containing 57.3k sf on 3.48 acres with excess land for trailer parking and storage.

Upon expiration of an in-place lease estimated to be at a below-market rental rate, Rexford intends to undertake value-add repositioning to drive cash flow and value growth. According to CBRE, the vacancy rate in the 223 msf LA South Bay submarket was 0.7% at the end of the third quarter 2019.

According to Rexford execs, Pomona Distribution Center provides attractive cash flow while also presenting future value-add potential to increase cash flow and value by increasing below-market, in-place rents to higher market rates as leases roll. Del Amo Boulevard, a 100% leased, low coverage industrial site with highly-sought-after trailer parking and yard storage near the ports of Los Angeles and Long Beach, was acquired in an off-market transaction and also provides the potential to roll current lease rates estimated to be below-market to higher rates as leases expire. Both properties present the potential for value-add repositioning upon expiration of in-place leases.





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