Rexford Industrial Continues Aggressive Expansion with $153M Buy

Rexford Industrial Realty isn’t slowing down. It has continued its aggressive portfolio expansion this year. In its latest round of acquisitions, the firm purchased six Southern California industrial properties totaling $153 million. Year-to-date, Rexford has spent $610 million on industrial properties in the region.

In keeping with Rexford’s standard strategy, the company acquired all six of its most recent purchases through off-market or lightly marketed deals and funded the purchases with cash-on-hand and the company’s line of credit. This year, 85% of the company’s purchases have been sourced through off-market or lightly markets deals.

The firm completed the latest round of acquisitions in April and May. The list of purchases starts with a development site at 7815 Van Nuys Boulevard in Panorama City that was purchased for $25 million. Rexford will demolish the existing property and build a 77,000-square-foot class-A industrial building, which is projected to generate 4.7% unlevered cash yield on total investment upon initial stabilization.

Next, Rexford acquired a two-building 66,000-square-foot property at 900-920 Allen Avenue in Glendale for $25 million. The deal is expected to generate an initial 4% unlevered cash yield on total investment, then will grow with 3% annual contractual rent increases, providing the potential for future value-add redevelopment.

In its smallest deal, Rexford then acquired a new construction 35,000-square-foot single tenant building on 1.7 acres of land, is located near the Ontario International Airport at 1154 Holt Boulevard in Ontario for $14.6 million. Upon the lease expiration, the company plans to re-lease the building at market rent, which will ultimately deliver a 3.9% unlevered cash yield on total investment upon stabilization. Similarly, Rexford acquired a 56,000-square-foot single-tenant building for $15.5 million. The property is located at 13535 Larwin Circle in Santa Fe Springs, and has significant upside with rents 60% below current market rates. While the investment has a current 2.5% unlevered cash yield, it 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.

In the firm’s two largest acquisitions, it acquired a two-building 124,243-square-foot class-A property for $46.9 million. With rents 50% below market, there is significant upside in the property, generating an initial 2.1% unlevered cash yield that is projected to grow to an unlevered stabilized cash yield on total investment of over 5%. Finally, Rexford acquired an outdoor storage facility for $26.5 million. The property is 92% leased with rents 40% below market. It will generate an initial 1.3% unlevered cash yield is projected to grow to an unlevered cash yield on total investment of 4.8% upon stabilization.

Rexford has an additional $500 million in properties under contract. Last year, Rexford acquired $1.6 billion in industrial assets in Southern California, and it is on track to exceed that number this year.