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Rexford Industrial Realty Closes $83 Mil in SoCal Industrial Buys

4/18/22

Rexford Industrial Realty acquired of four SoCal industrial properties for combined price of $82.7 mil. The purchases were funded using a combination of cash on hand, operating partnership units, proceeds from forward equity settlements and the company's line of credit.

According to the company, in the first quarter, Rexford Industrial completed $458 mil of investments, of which over 85% were acquired through off-market or lightly marketed transactions. In March, through off-market transactions, the company acquired:

700-806 W. 14th Street and 701-733 W. Anaheim Street, Long Beach, located within the LA South Bay submarket for $24 mil, or $115 per land square foot. The 123.5k sf, 4.8-acre multi-tenant industrial business park is strategically located with immediate access to the ports of Los Angeles and Long Beach and leased at rents estimated to be 25% below current market rates. The investment's initial 4.1% unlevered cash yield is expected to grow to a 5.3% stabilized unlevered cash yield on total investment. The purchase was completed using $12 mil of cash and 164,998 3.0% cumulative Convertible Preferred Operating Partnership units that are redeemable by the seller on a one-to-one basis for shares of the Company's publicly traded common stock. According to CBRE, the vacancy rate in the 219 msf LA South Bay submarket was 0.6% at the end of the fourth quarter 2021.

19900 Plummer Street, Chatsworth, located within the LA San Fernando Valley submarket for $15 mil, or $90 per land square foot. Upon lease expiration, the company intends to either redevelop the 3.8-acre industrial-zoned site by removing the existing improvements and constructing a new Class A, 78k sf warehouse or renew the entrenched in-place tenant. The investment generates an initial 4.8% unlevered cash yield and provides future value-add redevelopment opportunity. According to CBRE, the vacancy rate in the 180 msf LA San Fernando Valley submarket was 0.6% at the end of the fourth quarter 2021.

6245 Providence Way, Eastvale, located within the Inland Empire West submarket for $9.7 mil, or $350 per square foot. The Class A, single tenant building consists of 27.6k sf on two acres leased at rent estimated to be 40% below current market rates. Upon lease expiration, the company intends to drive accretive cash flow growth through re-leasing at market rent. The initial 2.9% unlevered cash yield is projected to grow to an unlevered stabilized cash yield on total investment of approximately 5.1%. According to CBRE, the vacancy rate in the 320 msf Inland Empire West submarket was 0.6% at the end of the fourth quarter 2021.

13711 Freeway Drive, Santa Fe Springs, located within the LA Mid-Counties submarket for $34 mil, or $156 per land square foot. Acquired in a short-term sale-leaseback, the company plans to redevelop the five-acre site by constructing a 108k sf, Class A building. The location has premier frontage along the I-5 Fwy, one of the busiest thoroughfares in Los Angeles. The investment is projected to generate a 5.0% stabilized unlevered cash yield on total investment. According to CBRE, the vacancy rate in the 111 msf LA Mid-Counties submarket was 0.1% at the end of the fourth quarter 2021.




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