Rexford Industrial’s Latest Round of Purchases Totals $188M

Rexford Industrial has continued its status as one of the most active industrial buyers in Southern California. In its latest round of purchases, the company has acquired five properties in local infill markets for $188.9 million, bringing its investment activity for the year to $420 million.

The five properties total 660,254 square feet on nearly 29 acres. As part of the transactions, Rexford purchased 2425-2535 E. 12th Street in Los Angeles for $93.6 million or $363 per square foot. The 257,976-square-foot property is on 7.5 acres of land adjacent to the Arts District in Downtown Los Angeles, and it is 96% leased to 11 tenants. The REIT expects the property to generate an initial stabilized unlevered yield of 4.9% on total investment.

19951 Mariner Avenue was acquired for $27.4 million or $307 per square foot. The 89,272-square-foot industrial building is on 4.2 acres, and it is fully leased by an occupant that utilizes the property as its corporate headquarters. Rexford expects to earn a initial stabilized unlevered yield on total investment is 5.3%.

Up next in the firm’s June transactions, 2555 E. Del Amo Boulevard was purchased for $13.5 million or $174 per square foot. The 77,758-square-foot property is on 3.2 acres of land, and the firm expects to earn an initial unlevered yield on total investment is 3.8%.

In another transaction, Rexford acquired an undisclosed in Los Angeles’ Greater San Fernando Valley submarket for $27.3 million or $87 per land square foot. The transaction was part of a sale-leaseback of a 100,000 square-foot building on 7 acres. Rexford expects the property to generate an initial 4.4% stabilized unlevered yield on total investment.

Finally, Rexford purchased 29120 Commerce Center Drive in Los Angeles for $27.1 million or $200 per square foot. The property totals 135,258 square feet on 6.9 acres, and it should produce an initial unlevered yield on total investment is 3.4%.

The industrial market in Los Angeles has benefitted from the pandemic and the surge in ecommerce activity. In the South Bay submarket, where Rexford’s first three properties are located, the industrial market had a .8% vacancy rate at the end of the first quarter, and in the San Fernando Valley, the location of the latter two properties purchased by the REIT, the vacancy rate is only 2.4%. A recent forecast from Marcus & Millichap expects the industrial market to outperform pre-pandemic activity this year, with the expectation that the industrial vacancy rate to drop 40 basis points this year, falling to 2.9%, and that the average rent will increase 4.8% this year to $13.40 per square foot.