Rexford Industrial Realty Shells Out $191M for SoCal Portfolio
- Apr 20, 2016
The properties are located in four of the company’s core infill Southern California markets, including Orange County, Inland Empire West, Central San Diego and Los Angeles-San Gabriel Valley.
The deal, which calculates at around $125 per square foot, was funded with proceeds from Rexford Industrial Realty’s recent public equity issuance and the exercise of a $100 million accordion on its $125 million unsecured term loan.
“We are pleased to complete the acquisition of this well-located, high-quality portfolio, which increases our owned square footage by over 12 percent,” Howard Schwimmer and Michael Frankel, Rexford Industrial Realty co-chief executive officers, said in a prepared release. “The portfolio, which is 100 percent leased to 12 tenants, brings greater scale and operating efficiency in key infill submarkets and is expected to be accretive to our 2016 FFO/share operating metrics.”
According to the latest industrial market report from Cushman & Wakefield, U.S. industrial markets absorbed 57.8 million square feet of space in the first quarter of 2016, an increase of 9.3 percent from the same time a year ago.
This marked 24 consecutive quarters of positive net occupancy gains for the sector, placing the current expansion among the longest on record. It’s also among the strongest.
“Going forward, the demand drivers for industrial remain firmly intact,” Kevin Thorpe, Cushman & Wakefield chief economist, said in the report. “Much of what drives demand for industrial space links to the U.S. consumer, and by most measures, the consumer is feeling confident and spending. With the U.S. economy now showing signs of shaking off the first quarter blues and with the U.S. consumer on solid footing, the outlook for industrial demand remains robust.”
The report forecasts the year ahead to be another one where net absorption surpasses the 200 million-square-foot mark.
Rexford Industrial now owns interests in 131 properties with approximately 13.7 million rentable square feet and manages an additional 19 properties with approximately 1.2 million rentable square feet.