Rexford Industrial Acquires 473 KSF Industrial Complex in Glendale, Calif.
- Apr 26, 2013
Rexford Industrial has purchased a seven-building, 473,345-square-foot industrial complex on 21 acres in Glendale, Calif., from an undisclosed institutional owner for $56.2 million. The acquisition was made through its Rexford Industrial Fund V REIT, which will be used to buy more than $500 million of industrial assets in Southern California.
The high-quality property has single and multi-tenant buildings, including two retail frontage buildings. It is fully leased to 27 tenants, including Staples, Anderson Printing, Nordstrom and Pep Boys. Located at 3332-3424 North San Fernando Road and 3550 Tyburn St. in Glendale, the property has easy access to I-5, and is not far from Burbank and downtown Los Angeles. The tenant spaces range from 3,000 to 5,000 square feet and have high ceiling clearance and dock-high loading.
“This project is best in class in that particular market,” Howard Schwimmer, Rexford co-founder and senior managing partner, told Commercial Property Executive. “It has always had a strong occupancy level, even during the recession.”
Schwimmer, who has been in the industrial real estate business for 30 years, said every time he passed the location, “I looked at that and wanted to own it. That has finally come to fruition.”
Both the buyer and seller were represented by Steve Silk, Jay Borzi and Adam Pastor of Eastdil Secured.
Rexford is a leading industrial real estate investment firm that acquires, manages and develops all classes of industrial properties in Southern California, including core, value-add, repositioning and re-development. The company, which operates more than 7 million square feet of industrial properties, specializes in highly-sought-after infill Southern California locations.
The Glendale property is “the epitome of infill industrial real estate,” Schwimmer said, adding that it is in a very densely populated area, where most of the product was built in the 1950s and 1960s.
Schwimmer said the firm has “a huge pipeline of additional acquisitions we’re working through.” He said they make three or four bids a week on properties and about 60 percent of the properties they do acquire are off market or lightly marketed.
In January, Rexford announced that its fifth real estate fund, RIF V, had closed with $127 million in capital commitments. Schwimmer told CPE that over the past two years, Rexford has bought more than 3 million square feet of assets. He said the firm has the buying power to acquire an additional 2.5 million to 3 million square feet.
“Our strategy is two-fold, we focus on the distressed that still continues to be present in the marketplace as well as looking at stabilized acquisitions and others,” Schwimmer said.
One of the keys to the firm’s success is the ability to do all the redevelopment and repositioning in-house. Schwimmer said they even have two general contractors on staff to focus on the value-add assets.
“We’re very nimble in terms of some of the deals we’re working on now,” he added.
In June 2012, Rexford acquired a 1.2 million-square-foot industrial complex in Camarillo, Calif., for $59.1 million. The property had 300,000 square feet of vacant space that was in an older building. Schwimmer said the firm is converting that into seven new industrial units with all new offices and loading areas.
More recently, Rexford picked up two industrial complexes for a total of $12.6 million. A 78,183-square-foot asset that is fully leased was acquired in Carson, Calif., for $5.4 million. The property has five units and is located near the Ports of Los Angeles and Long Beach in the South Bay submarket, one of the top performing industrial markets in the United States. The second acquisition was an 88,146-square-foot, multi-tenant property in Montclair, Calif., in the West Inland Empire submarket. Purchased for $7.2 million, it has six multi-tenant buildings and is 84 percent leased.
Schwimmer said Rexford focuses solely on Southern California because it is the largest industrial market and has the lowest vacancy rate in the U.S.
“It is 70 percent larger than number two, which is Chicago,” he concluded. “Tenants that occupy our buildings are from national companies to local entrepreneurs and generally all have to be here serving this large population.”