Rexford Industrial Realty has acquired two industrial properties for $194.4 million.
The acquisitions were funded using cash on hand.
“These investments, acquired through off-market transactions, demonstrate the company’s programmatic and proprietary approach to identifying exceptionally well-located, off-market investment opportunities with substantial, above-market return on investment and cash flow growth within infill Southern California, the nation’s lowest-supply and highest-demand industrial market,” said Howard Schwimmer and Michael Frankel, Co-Chief Executive Officers of Rexford Industrial.
“Our local sharpshooter focus continues to generate favorable access to high-quality industrial property investments within a market that ranks as the fourth largest industrial market in the world, behind only the entire country-wide markets of the United States, China and Germany. With $779 million of acquisitions completed year-to-date, plus an additional $600 million of new investments under contract or accepted offer, we are well positioned to drive superior shareholder value creation through accretive internal and external growth.”
The company acquired 8210-8240 Haskell Ave, located in Van Nuys, within the LA – San Fernando Valley submarket for $12.4 million or $233 per square foot.
The property comprises three vacant industrial buildings containing 53,248 square feet of improvements on 2.3 acres of land located adjacent to the I-405 freeway with immediate access to US-101 and Van Nuys Airport.
The company intends to execute a value-add repositioning program to modernize and increase functionality of the buildings. The stabilized unlevered cash yield on total investment is projected to start at 5.0% upon lease-up with growth expected thereafter. According to CBRE, the vacancy rate in the 182 million square-foot LA – San Fernando Valley submarket was 1.4% at the end of the second quarter 2021.
The company acquired 3100 Lomita Blvd, located in Torrance, within the LA – South Bay submarket for $182.0 million or $316 per square foot. The 91% leased, 575,976 square foot, five-building light industrial and manufacturing campus is located in Western Torrance on 26.6 acres of land within a premier infill South Bay location.
The property, currently leased to three credit tenants on long term leases, is positioned to generate an initial yield of 5.3%, growing over time with approximately 3.0% annual contractual rent escalations. Upon expiration of the leases, the company intends to either renew the entrenched tenants or construct new Class A industrial buildings on the site.
In connection with the transaction, the company prepaid an existing loan on the property and incurred a $20.4 million prepayment fee in addition to the purchase price at closing. According to CBRE, the vacancy rate in the 218 million square-foot LA – South Bay submarket was 0.6% at the end of the second quarter 2021.