Transactions - DECEMBER 12, 2019

Rexford Industrial acquires two industrial properties for $99m

by Released

Rexford Industrial Realty has acquired two industrial properties for $99.7 million. 

"These investments illustrate Rexford's ability to capitalize upon value-add acquisition opportunities as a consolidator of distribution-focused properties within infill Southern California," stated Howard Schwimmer and Michael Frankel, co-CEO of the company. "Pomona Distribution Center provides attractive cash flow while also presenting future value-add potential to increase cash flow and value by increasing below-market, in-place rents to higher market rates as leases roll. Del Amo Boulevard, a 100 percent leased, low coverage industrial site with highly-sought-after trailer parking and yard storage near the ports of Los Angeles and Long Beach, was acquired in an off-market transaction and also provides the potential to roll current lease rates estimated to be below-market to higher rates as leases expire. Both properties present the potential for value-add repositioning upon expiration of in-place leases. With over $956 million of acquisitions completed year to date within prime infill Southern California markets, we remain pleased with the quality of investment opportunities in our acquisition pipeline and our ability to execute Rexford's unique internal and external growth strategies to create value for our shareholders as we move forward."

The company acquired Pomona Distribution Center, located at 1601 W. Mission Boulevard in Pomona, within the L.A. – San Gabriel Valley submarket, for $87.8 million, or $117 per square foot. The property comprises a two-tenant industrial building containing 751,528 square feet on 32.2 acres of land and is fully leased to two tenants at rents estimated to be well below market rates. Upon expiration of the existing leases, the Company intends to drive cash flow by increasing rents to higher market rates and by completing value-add functional and cosmetic upgrades, which may include further demising of existing spaces. According to CBRE, the vacancy rate in the 154 million square foot L.A. – San Gabriel Valley submarket was 1.4 percent at the end of the third quarter 2019.

The company also acquired 2757 E. Del Amo Boulevard, located in Rancho Dominguez within the L.A. – South Bay submarket, for $11.9 million, or $207 per square foot. The property comprises a fully leased single-tenant industrial building containing 57,300 square feet on 3.48 acres with excess land for trailer parking and storage. Upon expiration of an in-place lease estimated to be at a below-market rental rate, the Company intends to undertake value-add repositioning to drive cash flow and value growth. According to CBRE, the vacancy rate in the 223 million square foot L.A. – South Bay submarket was 0.7 percent at the end of the third quarter 2019.

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