Rexford's SoCal Industrial Binge Tops $2.4B

Rexford Industrial Realty has announced the acquisition of 10 more infill industrial properties in Southern California in deals encompassing $366M, pushing the total for its 2022 SoCal acquisitions binge to $2.4B—with more to come in the REIT’s pipeline.

As it has with the other multi-property acquisitions in SoCal the company announced during the past twelve months, Rexford deployed a strategy of zeroing in on off-market and lightly marketed targets, many with tenants paying below-market rents, and scooping them up in cash-fueled deals.

Rexford said in a release that the transactions announced this week were funded using a combination of cash on hand and proceeds from forward equity settlement. The release also said the company has $400M of “additional accretive investments” under contract or accepted offer.

The deals announced this week include a five-property portfolio encompassing 516K SF in the Inland Empire West and the LA-South Bay submarkets purchased for $198M, or $382 per SF. Rexford said the portfolio, which includes properties in Carson, Torrance and Fontana, are 100% leased to six tenants.

The five-property portfolio acquisition generates an aggregate initial 5% unlevered cash yield projected to grow to a stabilized cash yield of 5.5% through re-leasing at market rents and annual contractual rent increases, Rexford said.

A 77K SF industrial campus in Irwindale in LA’s San Gabriel Valley submarket, leased to a single tenant through a long-term sale-leaseback, was acquired by Rexford for $40M, or $116 per SF. Also leased to a single tenant through a sale-leaseback is a 34KSF warehouse in Corona purchased for $10.5M, or $305 per SF.

Rexford acquired two properties that it plans to combine with parcels purchased earlier this year as repositioning or redevelopment projects.

The REIT bought a 4.8-acre property in the South Bay submarket for $49M that it will combine with a 1-acre parcel it purchased in July. Rexford is planning to reposition into a low coverage logistics facility containing a 57,000 square foot cross dock building and oversized container storage yard.

Rexford also bought a 3-acre site in Rancho Dominguez for $27.5M that it will merge with adjacent 2.5-acre site the company acquired in August. Upon near-term lease expiration, Rexford plans to redevelop the combined sites into a low-coverage logistics facility with a 34K SF building and an oversized container storage yard.

The REIT also scooped up a 2.0-acre industrial outdoor storage site in Van Nuys for $11M

Rexford’s SoCal acquisitions binge has been announced in large packages, including the $339M purchase of seven properties in September and seven deals in July that totaled $661M.

The REIT’s strategy uses rent intel—which the REIT says it acquires through its “proprietary access”—to target its SoCal acquisitions, then pouncing in off-market, cash-fueled deals. The company positions itself to make quick acquisitions by maintaining a low-leverage balance sheet.