LOS ANGELES—Los Angeles-based Rexford Industrial Realty Inc., a real estate investment trust focused on owning and operating industrial property located in Southern California infill markets, has purchased a 16-building industrial park for approximately $141.2 million. Additionally, the company completed the disposition of an industrial property for approximately $40.1 million.
Proceeds from the disposition were reinvested into the new acquisition through a 1031 exchange with the balance of the purchase funded utilizing the Company's line of credit.
“These two transactions exemplify Rexford's value-add acquisition and accretive disposition opportunities within our core infill Southern California submarkets,” says Howard Schwimmer and Michael Frankel, co-chief executive officers of the company. “In October 2015, we acquired 2535 Midway Dr. for $19.3 million and have been entitling our planned project repositioning. The Midway property was sold vacant, prior to the start of construction after receiving an unsolicited purchase offer at a substantial premium to its industrial market value from a buyer intending to convert the property to mixed creative office and residential use. This transaction allowed us to efficiently recycle capital from the sale of a vacant property into the purchase of a highly-occupied, institutional-quality industrial complex, providing immediate accretion to cash flow and portfolio value.”
The company acquired Safari Business Center, containing 16 buildings totaling approximately 1.14 million square feet on 52.2 acres, for approximately $141.2 million, or approximately $124 per square foot. The property is located in Ontario, CA, adjacent to the Ontario Airport within the Inland Empire West submarket and is currently 97% leased to 75 tenants. In-place rents at the property are estimated to be approximately 17% below market, on average.
The property is the largest multi-tenant industrial park in the sub-market and features market-leading functionality and high-image identity in a premier infill location, according to a prepared release. Spaces range from 7,000 to 36,000 square feet with dock-high loading and flexible, low-finish floor plans, which draw consistent leasing demand from a broad cross-section of national and regional businesses. According to CBRE, the vacancy rate in the 281 million square foot Inland Empire West submarket was 2.1% at the end of the first quarter, 2017.
CBRE's Darla Longo, Barbara Emmons Perrier, Rebecca Perlmutter Finkel and Michael Kendall represented the seller, Los Angeles-based ARA | American Realty Advisors. Jeff Bellitti and Mac Hewett of Jones Lang LaSalle are the leasing brokers on the park and assisted CBRE in the sale.
“The iconic Safari Business Center sale was an extremely rare opportunity to acquire a property of such scale in the Inland Empire West,” said Longo. “There is no competing new development of smaller industrial product in the Inland Empire due to high construction costs and demand has outpaced the existing supply.”
In a separate transaction, the company sold 2535 Midway Dr. in the Central San Diego submarket, for approximately $40.1 million, or $107 per square foot. The property consists of two vacant multi-story buildings comprising 373,744 square feet. The property had been purchased in October 2015, and was vacant at the time of the sale with substantial redevelopment near commencement. Proceeds from the sale were used in a tax deferred 1031 exchange to fund a portion of the Safari Business Center acquisition.
LOS ANGELES—Los Angeles-based Rexford Industrial Realty Inc., a real estate investment trust focused on owning and operating industrial property located in Southern California infill markets, has purchased a 16-building industrial park for approximately $141.2 million. Additionally, the company completed the disposition of an industrial property for approximately $40.1 million.
Proceeds from the disposition were reinvested into the new acquisition through a 1031 exchange with the balance of the purchase funded utilizing the Company's line of credit.
“These two transactions exemplify Rexford's value-add acquisition and accretive disposition opportunities within our core infill Southern California submarkets,” says Howard Schwimmer and Michael Frankel, co-chief executive officers of the company. “In October 2015, we acquired 2535 Midway Dr. for $19.3 million and have been entitling our planned project repositioning. The Midway property was sold vacant, prior to the start of construction after receiving an unsolicited purchase offer at a substantial premium to its industrial market value from a buyer intending to convert the property to mixed creative office and residential use. This transaction allowed us to efficiently recycle capital from the sale of a vacant property into the purchase of a highly-occupied, institutional-quality industrial complex, providing immediate accretion to cash flow and portfolio value.”
The company acquired Safari Business Center, containing 16 buildings totaling approximately 1.14 million square feet on 52.2 acres, for approximately $141.2 million, or approximately $124 per square foot. The property is located in Ontario, CA, adjacent to the Ontario Airport within the Inland Empire West submarket and is currently 97% leased to 75 tenants. In-place rents at the property are estimated to be approximately 17% below market, on average.
The property is the largest multi-tenant industrial park in the sub-market and features market-leading functionality and high-image identity in a premier infill location, according to a prepared release. Spaces range from 7,000 to 36,000 square feet with dock-high loading and flexible, low-finish floor plans, which draw consistent leasing demand from a broad cross-section of national and regional businesses. According to CBRE, the vacancy rate in the 281 million square foot Inland Empire West submarket was 2.1% at the end of the first quarter, 2017.
CBRE's Darla Longo, Barbara Emmons Perrier, Rebecca Perlmutter Finkel and Michael Kendall represented the seller, Los Angeles-based ARA | American Realty Advisors. Jeff Bellitti and Mac Hewett of
“The iconic Safari Business Center sale was an extremely rare opportunity to acquire a property of such scale in the Inland Empire West,” said Longo. “There is no competing new development of smaller industrial product in the Inland Empire due to high construction costs and demand has outpaced the existing supply.”
In a separate transaction, the company sold 2535 Midway Dr. in the Central San Diego submarket, for approximately $40.1 million, or $107 per square foot. The property consists of two vacant multi-story buildings comprising 373,744 square feet. The property had been purchased in October 2015, and was vacant at the time of the sale with substantial redevelopment near commencement. Proceeds from the sale were used in a tax deferred 1031 exchange to fund a portion of the Safari Business Center acquisition.
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