Rexford Industrial Buys, Sells $136M in SoCal Assets

The standout of the three separate transactions is the addition of the fully leased, 695,100-square-foot industrial facility at 5300 Sheila St. in Commerce, near downtown Los Angeles.
Michael Frankel, Co-CEO, Rexford Industrial Realty
Michael Frankel, Co-CEO, Rexford Industrial Realty

Rexford Industrial Realty continues to mold its Southern California portfolio through transaction after transaction, most recently acquiring two properties in separate deals totaling $127.1 million and selling two neighboring buildings for $9.1 million. With the closing of the three transactions, the REIT has added 729,600 square feet to its holdings and rid itself of 78,000 square feet of non-core assets.

More than a few investors are keen on Southern California’s industrial market, yet Rexford finds no dearth of opportunities to enhance its portfolio. “We apply a tremendous amount of work and effort through our own, proprietary internal research to identify transaction catalysts and opportunities enabling us to acquire a volume of off-market and lightly marketed industrial property investments at favorable cash yields,” Michael Frankel, co-CEO of Rexford Industrial Realty, told Commercial Property Executive.

Fully leased assets

Rexford’s new additions include the 695,100-square-foot industrial building at 5300 Sheila St. in Commerce, roughly five miles from downtown Los Angeles. Picked up for $121.1 million, the single-tenant property, sited on 36 acres of land, is 100 percent occupied under a long-term lease agreement. In Orange County, the REIT grabbed 1190 E. Stanford Court, a 34,500-square-foot facility on a 1.5-acre parcel in Anaheim. Rexford paid just over $6 million for the industrial facility, which is also 100 percent occupied by a roster of businesses, and the company plans to upgrade the property in anticipation of leasing at higher market rates as in-place leases expire.

On the sale side, Rexford traded 1910 and 1920 S. Archibald Ave. in Ontario, two buildings that were part of a three-building portfolio the REIT recently acquired. The Inland Empire flex facilities are just 69 percent leased, but at a sale price of $116 per square foot, they still fetched a figure exceeding the value at which they were underwritten for the portfolio purchase.

Shopping in sunny SoCal

So far in 2018, Rexford has revealed at least one acquisition every month, with each notice accompanied by news of the sale of an asset that doesn’t fit the company’s portfolio profile. The REIT kicked off the year with the announcement of its $62.7 million purchase of a fully leased, four-property portfolio totaling 416,800 square feet in the Inland Empire, Orange County and metropolitan Los Angeles markets.

“A full 75 percent of year-to-date investments have been made through off-market transactions, which differentiates Rexford within infill Southern California, the most sought-after and the most competitive industrial property market in the nation,” Frankel said. The company’s 2018 acquisitions total more than $235 million—and counting.

Image courtesy of Rexford Industrial Realty