Rexford’s SoCal Industrial Binge Aiming for $2B

Rexford Industrial Realty continues to vacuum up SoCal industrial properties, expanding its acquisition binge this year to $1.6B worth of properties, with another $500M of off-market or lightly marketed transactions looming in its deal pipeline for the rest of the year.

The LA-based REIT this week announced another seven deals for industrial properties in SoCal totaling $660.9M, including a $472M deal to buy a 1.06 M SF complex of six buildings on a 49.7-acre site that straddles Archibald and Limonite avenues in Eastvale in the Inland Empire.

The newly built Eastvale industrial complex, which traded for about $445 per square foot, is 71% leased and includes warehouses ranging in size from 48K SF to 501,649 SF. Vacancies in the Inland Empire market are microscopic at 0.01%, the tightest market in the US.

In addition to the Eastvale deal, Rexford acquired industrial properties in Jurapa Valley, Simi Valley, the city of Commerce and in LA’s South Bay market. These deals all were purchased using the strategy the REIT has deployed throughout its acquisitions binge this year.

Rexford targets warehouses in prime locations—mainly infill sites—currently leased to tenants paying below-market rents (and leases that soon will expire) in off-market or lightly marketed transactions financed with a combination of cash on hand, proceeds from forward equity settlements and credit.

This week’s tranche of deals included the acquisition of a 124K SF Class A building on 6 acres in Jurupa Valley for $47.5M, or about $382 per SF. The building is leased to Total Transportation Logistics at a rent that Rexford says is 85% below current market rates.

Rexford also purchased a 187K SF Class A warehouse on 10.9 acres in Simi Valley for $56.4M, or $302 per SF. The building currently is rented by two tenants paying rent that is about 35% below current market rates.

In LA County, Rexford this week acquired two warehouses in Commerce for $40.5M, or $170 per SF. The properties are 100% leased to a single tenant at rent estimated to be 60% below market.

Rexford also acquired three properties in LA’s South Bay market for a total of $46.5M, including a 60K SF complex in Torrance; a vacant 34K SF building on E. Anaheim St.; and a vacant 28K SF building on W. Rosencrans Ave.

“Our $1.6 billion of investments year-to-date, of which approximately 85 percent were acquired through off-market or lightly marketed transactions, are expected to generate substantially above-market stabilized returns on investment and drive accretive cash flow growth,” Rexford CEOs Howard Schwimmer and Michael Frankel said in a joint statement.