Rexford Industrial's Year-to-Date Acquisitions Hit $1.6B

Rexford Industrial has added five industrial assets to its sprawling Southern California portfolio. The five properties—all located in prime Southern California markets—were purchased in off-market transactions and total $141 million. The activity brings the REIT’s year-to-date investment volumes to $1.6 billion. All five deals were completed in November and December.

The firm acquired 20481 Crescent Bay Drive, a 88,355-square-foot, single-tenant industrial asset in Lake Forest for $19.5 million, or $221 per square foot. The current rents are 35$ below market, providing an value opportunity. Rexford is planning to reposition the asset upon the lease expiration. The investment has an initial stabilized unlevered cash yield is 3.7%.

2280 Ward Avenue, a 242,100-square-foot, modern class-A six-tenant building in Simi Valley, was purchased for $46.4 million, or $192 per square foot. The property’s current rents are 25% below market, and the property is fully leased. The initial stabilized unlevered cash yield is 4.6%, according to Rexford, which is projected to grow to above 5% over time, due to rent escalations.

Rexford purchased 334 El Encanto Road, 64,368 square foot, single tenant building is situated on 3.8 acres of land in the City of Industry, for $10.7 million, or $64 per land square foot. Current rents are 30% below market rates. If the current tenant does not renew upon lease expiration, Rexford will redevelop the property into a class-A 81,000 square foot modern industrial building. The initial in place 3.7% cash yield is projected to grow to a stabilized unlevered cash yield of approximately 5.7%, according to the company.

17031-17037 Green Drive is the fourth property Rexford purchased. The 51,000-square-foot building is on 3.6 acres of land and fully leased to two tenants. It traded hands for $13.8 million, or $270 per square foot. Current rents are 40% below market rates. Rexford is planning to reposition the property once the lease expires. The initial 3.8% unlevered cash yield is projected to grow to a stabilized unlevered cash yield on total investment of 5.4%.

Finally, Rexford acquired 13512 Marlay Avenue 199,363 square foot, modern, single tenant industrial warehouse on 10.1 acres of land in Fontana for $51.0 million, or $256 per square foot. Current rents are 40% below market rates. The initial 3.2% unlevered cash yield is projected to grow to a stabilized unlevered cash yield on total investment of 5.1%.

Rexford has been an active buyer this year, particularly in H2. In August, the firm’s year-to-date transaction activity totaled $585 million, meaning they have nearly tripled their sales volume since then. According to Howard Schwimmer and Michael Frankel, Rexford’s Co-CEOs, the activity is “indicative of Rexford’s substantial growth opportunity ahead as we consolidate our best-in-class portfolio within infill Southern California.” The firm currently has another $350 million in transactions under contract.