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5/12/22
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Rexford Industrial Realty Inc recently wrapped up acquisitions of six industrial properties for an aggregate purchase price of $152.7 mil. The purchases, all off-market, were funded using a combination of cash on hand and the company's line of credit.
According to Rexford, the companys year-to-date investments total $610 mil, with 85% of the acquisitions acquired through off-market or lightly marketed transactions. The firm has over $500 mil of additional investments under contract or accepted offer. In April and May, the company acquired:
7815 Van Nuys Blvd, Panorama City, located within the LA San Fernando Valley submarket, for $25 mil, or $175 per land square foot. Upon lease expirations, the company plans to remove existing improvements and construct a new 77k sf, Class A industrial building. The investment is projected to generate a 4.7% unlevered cash yield on total investment upon initial stabilization. According to CBRE, the vacancy rate in the 181 msf LA San Fernando Valley submarket was 0.5% at the end of the first quarter 2022.
900-920 Allen Ave, Glendale, located within the LA San Fernando Valley submarket, for $25 mil, or $364 per square foot. The property contains two industrial buildings comprising 68.6k sf situated on 3.3 acres of land. The investment generates an initial 4.0% unlevered cash yield on total investment, growing over time by 3.0% annual contractual rent increases and provides the potential for future value-add redevelopment.
1154 Holt Blvd, Ontario, located within the Inland Empire West submarket, for $14.2 mil, or $404 per square foot. Acquired through a short-term sale-lease-back, the newly constructed, single tenant, 35k sf building, situated on 1.7 acres of land, is located near the Ontario International Airport. Upon lease expiration, the company intends to re-lease at market rent. The investment is projected to generate a 3.9% unlevered cash yield on total investment upon stabilization. According to CBRE, the vacancy rate in the 321 msf Inland Empire - West submarket was 0.1% at the end of the first quarter 2022.
1550-1600 Champagne Ave, Ontario, located within the Inland Empire West submarket, for $46.9 mil, or $377 per square foot. The Class A, two-building 124.2k sf property, situated on 6.4 acres of land, is leased at rents estimated to be 50% below current market rates. Upon lease expiration, the company intends to drive accretive cash flow growth through re-leasing at market rent. The investment generates an initial 2.1% unlevered cash yield that is projected to grow to an unlevered stabilized cash yield on total investment of over 5.0%.
10131 Banana Ave, Fontana, located within the Inland Empire West submarket, for $26.2 mil, or $109 per land square foot. The 5.5-acre industrial outdoor storage site is 92% leased at rents estimated to be 40% below current market rates. Upon lease expirations, the company plans to redevelop the property by constructing a 104k sf Class A, low coverage logistics building. The initial 1.3% unlevered cash yield is projected to grow to an unlevered cash yield on total investment of 4.8% upon stabilization.
13535 Larwin Circle, Santa Fe Springs, located within the LA Mid-Counties submarket, for $15.5 mil, or $277 per square foot. The 56k sf, single-tenant building, situated on 2.5 acres of land, is leased at a rate estimated to be 60% below current market rates. The investment generates an initial 2.5% unlevered cash yield, which is projected to grow to an unlevered stabilized cash yield on total investment of 6.6% through either the renewal of the in-place tenant or a value-add repositioning of the property. According to CBRE, the vacancy rate in the 111 msf LA - Mid-Counties submarket was 0.1% at the end of the first quarter 2022.
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