DTLA’s The Box Yard Industrial Park Sells for $94M

The Box Yard in Downtown Los Angeles has traded hands for $94 million. Rexford Industrial purchased the 261,582-square-foot property as part of its substantial June acquisitions from Bridge Industrial, which upgraded both the interior and exterior of the property before the sale with office finishes, LED lighting, warehouse air circulation fans, new paint, new signage, landscaping and improved site security.

The sale is an example of the strong demand for industrial product, according to Newmark executive managing director Andrew Briner, who adds that the sales price was a market-leading figure. Briner represented Bridge in the transactions along with fellow Newmark executive managing directors Bret Hardy and Jim Linn, co-head of U.S. Capital Markets Kevin Shannon and senior managing directors Scott Schumacher and Laura Stumm.

The property was 95% leased at the time of the sale to several tenants across a broad swath of industries, including e-commerce, tech, entertainment/studio, fashion, arts and creative uses. In addition, the ownership had signed five new leases in the last six months. However, Briner says that the property is also positioned to benefit from “outsized risk adjusted returns” through a targeted lease-up strategy.

The Central Los Angeles industrial market is among the strongest in the country. According to research from Newmark, the market has had 76 quarters of sub-3% vacancy, and the current vacancy rate stands at 1.5%. The Box Yard Property is located in the heart of this market, plus it features 24-foot clear heights, dock and grade-level loading for each unit and a fully gated and secured site.

Rexford has been actively buying industrial product in response to the stellar demand. This is the largest and most expensive property in the firm’s June purchases, which totaled $188.9 million. In addition, Rexford also acquired 19951 Mariner Avenue for $27.4 million or $307 per square foot; 2555 E. Del Amo Boulevard for $13.5 million or $174 per square foot; an undisclosed in Los Angeles’ Greater San Fernando Valley submarket for $27.3 million or $87 per land square foot; and 29120 Commerce Center Drive in Los Angeles for $27.1 million or $200 per square foot.

The firm isn’t alone. There have been a series of substantial industrial purchases due to the strong fundamentals of the asset class. In April, for example, Partners Group sold a large-scale US industrial real estate portfolio on behalf of one of its clients for more than $1 billion. The portfolio included 88 industrial properties totaling 8.6 million square feet of leasable space with 74 light industrial buildings and 14 class-A bulk industrial buildings, which primarily serve e-commerce distribution tenants.