Rexford Industrial’s annual acquisitions reach $ 1.6 billion
Rexford Industrial has added five industrial assets to its extensive Southern California portfolio. The five properties, all located in major Southern California markets, were purchased in off-market transactions and total $ 141 million. This activity brings the REIT’s cumulative investment volumes to $ 1.6 billion. The five deals were closed in November and December.
The company acquired 20481 Crescent Bay Drive, an 88,355 square foot single-tenant industrial asset in Lake Forest for $ 19.5 million, or $ 221 per square foot. Current rents are $ 35 below market, providing a valuable opportunity. Rexford plans to reposition the asset when the lease expires. The investment has a stabilized initial cash yield without leverage is 3.7%.
2280 Ward Avenue, a 242,100 square foot modern six-tenant Class A building in Simi Valley, was purchased for $ 46.4 million, or $ 192 per square foot. Current property rents are 25% below market and the property is fully leased. According to Rexford, the initial stabilized non-leveraged cash yield is 4.6%, which is expected to exceed 5% over time, due to rising rents.
Rexford purchased 334 El Encanto Road, a 64,368 square foot single-tenant building located on 3.8 acres of land in the City of Industry, for $ 10.7 million, or $ 64 per square foot of ground. Current rents are 30% below market rates. If the current tenant does not renew when the lease expires, Rexford will redevelop the property into a modern 81,000 square foot Class A industrial building. According to the company, the initial 3.7% cash yield is expected to increase to a stabilized unleveraged cash yield of approximately 5.7%.
17031-17037 Green Drive is the fourth property purchased by Rexford. The 51,000 square foot building spans 3.6 acres of land and is fully leased to two tenants. He traded hands for $ 13.8 million, or $ 270 per square foot. Current rents are 40% below market rates. Rexford plans to reposition the property once the lease expires. The initial 3.8% non-leveraged cash return is expected to grow to reach a stabilized non-leveraged cash return on the total investment of 5.4%.
Finally, Rexford acquired the 199,363 square foot 13512 Marlay Avenue, a modern single-tenant industrial warehouse on 10.1 acres of land in Fontana for $ 51.0 million, or $ 256 per square foot. Current rents are 40% below market rates. The initial non-leveraged cash return of 3.2% is expected to grow to reach a stabilized non-leveraged cash return on the total investment of 5.1%.
Rexford has been an active buyer this year, particularly in the second half of the year. In August, the company’s transaction activity since the start of the year totaled $ 585 million, which means they have almost tripled their sales volume since then. According to Howard Schwimmer and Michael Frankel, co-CEOs of Rexford, the activity is “indicative of Rexford’s substantial growth opportunity going forward as we consolidate our blue chip portfolio in Southern California.” The company currently has $ 350 million in additional transactions under contract.