Rexford Industrial’s Inland Empire Acquisitions Spree

By: Sharjeel Sohaib

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Jan 21, 2023

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  • Rexford Industrial Realty, located throughout infill Southern California, announced the acquisition of ten industrial properties for $336.2 million.
  • Rexford Industrial invests in operating and redeveloping industrial properties throughout infill Southern California, the world’s fourth-largest industrial market.
  • The industrial property group also acquired several properties in the Inland Empire, including 755 Trademark Circle in Corona.

 

Rexford Industrial’s Success in Acquisitions

Rexford Industrial’s distinctive sourcing advantage and value-addition skills continue to produce accretive current and long-term portfolio cash flow growth. Rexford Industrial’s ability to generate significant, above-market value creation and ROI was demonstrated by its $2.4 billion acquisitions in 2022. 

Future Potential for Growth

The company is well-positioned with a low-leverage balance sheet to continue creating superior value for its shareholders. This results from an extensive pipeline of future NOI growth driven by significant mark-to-market in-place leases, value-add repositioning, and redevelopment projects, as well as $400 million of additional accretive investments under contract or accepted offer.

Read More: Rexford Industrial Realty Acquires Seven Properties for $661M in Southern California.

Specific Acquisitions

Through off-market and sparsely advertised transactions, the company bought the following in the fourth quarter of 2022:

  • Susana Road is available for $27.5 million, or $208 per land square foot. The 3.0-acre plot is situated next to a 2.5-acre site purchased in August 2022. The company plans to transform the merged areas into a low-coverage logistics facility with a 34,000-square-foot structure and an enormous container storage yard when the current leases expire. 
  • Los Angeles’ LA – South Bay submarket offers 14400 S. Figueroa Street for $49.0 million, or $234 per land square foot. The 1.0-acre land purchased in July 2022 is just next to the 4.8-acre plot. The company plans to convert the combined site into a low-coverage logistics center with an enormous container storage yard and a 57,000-square-foot cross-dock building.
  • A five-property portfolio priced at $198.1 million, or $382 per square foot, spread over the LA – South Bay and Inland Empire – West submarkets. The properties are 20455 S. Reeves Avenue, 2130-2140 E. Del Amo Boulevard and 14874 Jurupa Avenue in Fontana, and 19145 Gramercy Place in Torrance. The portfolio’s communal area of 518,931 square feet on 24.6 acres of land is entirely leased out to six tenants. As of the third quarter of 2022, 0.4% of the 329 million square foot Inland Empire – West submarket was vacant.
  • In the Inland Empire – West submarket, 755 Trademark Circle, Corona, is available for $10.5 million, or $305 per square foot. A long-term sale-leaseback is used to lease the 1.6-acre property’s 34,427-square-foot building to a single tenant. The investment generates a 5.3% initial unlevered yield, which improves over time thanks to 4.0% contractual yearly rent increases.
  • Irwindale’s 4500 Azusa Canyon is priced at $40.0 million, or $116 per square foot of the property. It is part of the LA – San Gabriel Valley submarket. The 77,266-square-foot building complex on the 7.9-acre low-coverage site is leased to a single tenant under a sell-leaseback arrangement. The investment’s 5.3% initial unlevered cash yield increases over time by 3.0% in contractual rent increases. 
  • The LA – San Fernando Valley submarket, 7817 Haskell Avenue, Van Nuys, is available for $11.1 million, or $128 per land square foot. A single tenant is the only one with a lease on the 2.0-acre industrial outdoor storage facility. The investment yields an initial unlevered cash yield of 5.3%, which is expected to increase to a total investment yield of 5.9% unlevered stable cash yield. After the third quarter of 2022, the vacancy rate in the 177 million square foot LA – San Fernando Valley submarket was 0.5%, according to CBRE.

Wrap Up!

Rexford Industrial Realty, Inc. announced the acquisition of ten industrial properties for a total cost of $336.2 million. This real estate investment trust has built a strong portfolio through its unique sourcing advantage and value-addition skills. This latest round of acquisitions demonstrates the company’s ability to generate significant, above-market value creation and return on investment. It acquired $2.4 billion worth of properties in 2022 alone.

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