Rexford Industrial Buys Los Angeles Assets for $111M

In separate off-market transactions, the REIT added 464,500 square feet of logistics space and a 5-acre outdoor storage yard to its ever-expanding Southern California footprint.
12211 Greenstone Ave., Santa Fe Springs, Calif.
12211 Greenstone Ave., Santa Fe Springs, Calif. Image via Google Street View

Rexford Industrial Realty Inc. continues its year-end purchasing spree with the acquisition of $110.6 million in assets in metropolitan Los Angeles. In separate off-market transactions, the REIT bolstered its ever-growing foothold in Southern California with the addition of a six-building logistics portfolio and an industrial outdoor storage yard, both of which are located in infill markets.

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In Vernon, Rexford purchased a nearly 464,500-square-foot portfolio for $93.8 million. The fully leased group of six single- and multi-tenant buildings occupies roughly 21 acres near downtown Los Angeles. In another deal, the company acquired the outdoor storage yard at 12211 Greenstone Ave. in Santa Fe Springs for $16.8 million. The 5-acre property is leased to a high-quality, national tenant. Both assets serve last-mile distribution and logistics demands and, with in-place rents currently at an average of 25 percent below market rates, provide substantial upside potential.

The dealmaker

With the completion of the Vernon portfolio and Greenstone Ave. transactions, Rexford has closed more than $1.1 billion of acquisitions year-to-date. The majority of its purchases, roughly 77 percent, have been the result of off-market deals. “When we started this company a couple of decades ago, we started with the fundamental premise that it wouldn’t be a very exciting business if we’re relying on third parties, namely brokers, to bring us our growth opportunities because they’re highly competitive,” Michael Frankel, co-CEO of Rexford Industrial Realty Inc., said during the company’s third quarter earnings conference call on October 21. “And so we’ve created a machine at Rexford that’s capable, by and large, generating our own investment opportunities. And that translates directly into better economics, better cash flow growth and better return on equity.”

Rexford has been highly acquisitive in the second half of the year, with its finessing of off-market transactions presenting ample opportunities despite the extremely competitive climate in industrial investment sales. Transactions in December alone include the $129.4 million purchase of four single-tenant industrial buildings in the high-demand Inland Empire, and the $154.6 million acquisition of a portfolio in the San Fernando Valley.