Southern California industrial property investor Rexford Industrial Realty, Inc., a Los Angeles real estate investment trust, has acquired an industrial property, the 6687 Flotilla St., located in Commerce within the LA – Central submarket, for $21.0 million, or $175 per square foot. The acquisition was funded using cash on hand.
The industrial property comprises a divisible single-tenant industrial building containing 120,000 square feet on 5.1 acres of land.
The building is fully leased to an entrenched tenant at a rent estimated to be 40% below market with a near-term lease expiration. The Company’s strategy for the property is to capitalize upon its high-image office, 20′-24′ clear heights, extensive dock-high loading and a large secured yard, by undertaking light improvements in order to either renew the existing tenant or re-lease at market rents.
“We continue to leverage our deep market relationships and proprietary originations platform to source attractive, off-market opportunities in Southern California’s infill industrial market,” stated Howard Schwimmer and Michael Frankel, Co-Chief Executive Officers of the Company.
“Located within the highly supply-constrained LA – Central submarket, Flotilla Street represents a highly-functional, prime infill location positioned to drive significant cash flow growth as the in-place rent is estimated to be substantially below-market with a near-term expiration. Looking forward, we remain pleased with our pipeline of internal and external growth opportunities, enabling us the opportunity to drive cash flow growth and value for our shareholders.”
According to CBRE, the vacancy rate in the 290 million square foot LA – Central submarket was 1.7% at the end of the first quarter 2020.