Rexford Industrial Realty Buys Logistics Assets for $339M
- Nov 19, 2020
Rexford Industrial Realty has added more than 1.1 million square feet to its portfolio of Southern California infill industrial assets through the acquisition of two properties. The REIT paid $339.2 million to an undisclosed seller for a four-building industrial complex and a three-tenant industrial property within the Greater Los Angeles area.
According to Rexford, the acquisition was funded through a combination of cash on hand, 1031 exchange proceeds from previous dispositions, assumption of existing debt and operating partnership units.
In Los Angeles’ Mid-Counties submarket, Rexford acquired Gateway Pointe Industrial Campus, which is located at 3963, 3931, 3735 and 3629 Workman Mill Road for $296.6 million. The 45.1-acre campus includes four Class A industrial buildings that total 989,195 square feet. The properties were built with 32-foot clear heights, dock-high loading, excess container parking and access to the area’s major transportation nodes. With current rents at the fully occupied property being approximately 21 percent below market rate, Rexford has plans to generate more cash flow from the industrial campus through lease renewals, as well as by finding new tenants at a higher market rate. Greenberg Glusker Fields Claman & Machtinger LLP’s Kenneth Fields, Patricia Hong and Amy Rice represented Rexford in the transaction.
In an off-market transaction, Rexford also acquired 13943-13955 Balboa Blvd. in Sylmar, Calif., for $42.6 million. The three-tenant Class A industrial building offers 200,632 square feet on a 10.5-acre site. The property is 100 percent occupied by three tenants and also has rents that are estimated to be approximately 19 percent below the submarket’s rates. Rexford is planning to conduct moderate capital improvements and renew leases or find new tenants at higher rents.
Rexford’s acquisition pipeline
Howard Schwimmer and Michael Frankel, co-CEOs of Rexford, said in prepared remarks that the REIT has closed on nearly $730 million in acquisitions year-to-date, with the majority of the transactions being off-market or lightly marketed. According to Schwimmer and Frankel’s joint statement, Rexford’s acquisition pipeline still has approximately $600 million in new investments under LOI or contract, which are expected to close in the coming months.
Rexford focuses on investing and operating industrial properties in Southern California. The REIT owns 235 properties totaling approximately 29.2 million rentable square feet and manages an additional 20 properties that add up to 1 million square feet. The two latest industrial acquisitions came months after the closing of another major Rexford acquisition in July that included five properties totaling 434,000 square feet.