Rexford Industrial Announces $304.2 Million of Transaction Activity

Rhea-AI Summary

Rexford Industrial Realty (NYSE: REXR) announced the acquisition of two industrial properties totaling 421,824 square feet and an 80.2-acre industrial storage site for $285.6 million. The company also sold a 71,600 square foot property for $18.6 million, funded by 1031 proceeds, cash, and previous equity offerings. Key acquisitions include properties in Ontario and Rancho Dominguez, offering favorable cash flow and future value-add opportunities. With over $1.3 billion invested year-to-date and additional investments under contract, Rexford aims for long-term cash flow growth.

Positive

• Acquired 421,824 square feet of industrial properties for $285.6 million, enhancing portfolio in Southern California's infill markets.
• Strong cash flow potential with initial yields of 4.3% to 5.0% projected to stabilize at 8.2% and 5.5%.
• Low vacancy rates in target markets (1.0% in Inland Empire – West; 0.6% in LA – South Bay) indicating demand.
• Strategic sale lease-back arrangement on a major acquisition to ensure stable cash inflow.

Negative

• None.

LOS ANGELES, Oct. 4, 2021 /PRNewswire/ -- Rexford Industrial Realty, Inc. (the "Company" or "Rexford Industrial") (NYSE: REXR), a real estate investment trust focused on creating value by investing in and operating industrial properties located in Southern California infill markets, today announced the acquisition of two industrial properties comprised of an aggregate 421,824 square feet and one 80.2 acre industrial storage site for an aggregate purchase price of $285.6 million. The company also announced the disposition of a 71,600 square foot property for $18.6 million. The acquisitions were funded using a combination of 1031 disposition proceeds, cash on hand, and proceeds from the Company's previously executed equity offerings.

"These transactions demonstrate Rexford's deep knowledge, local sharpshooter expertise and strategic focus in supply-constrained infill Southern California, the nation's most sought-after industrial market," said Howard Schwimmer and Michael Frankel, Co-Chief Executive Officers of the Company. "Acquired through off-market and lightly-marketed transactions, these investments contribute favorable current cash flow plus future value-add opportunity to drive superior, long term value creation. With over $1.3 billion in investments completed year-to-date, plus over $250 million of new investments under contract or accepted offer, the Company is well positioned with a low-leverage, fortress-like balance sheet to generate long-term cash flow growth and value for our shareholders through our demonstrated internal and external growth strategies." 

In September and October, the Company acquired:

• 5772 Jurupa Street, located in Ontario, within the Inland Empire – West submarket for $54.0 million or $150 per square foot. The 360,000 square foot, 30-foot clear building on 16.8 acres of land is fully leased at rent estimated to be approximately 40% below market. Upon lease expiration, the Company intends to drive cash flow growth through the renewal of the existing tenant at a higher market rent or through the execution of value-add improvements and re-tenanting. The initial unlevered 4.3% cash yield is projected to grow to a stabilized yield on total investment of 8.2%. According to CBRE, the vacancy rate in the 316 million square-foot Inland Empire – West submarket was 1.0% at the end of the second quarter 2021.
  
• 2500 E. Victoria Street, located in Rancho Dominguez, within the LA – South Bay submarket for $217.1 million, or $62 per land square foot. The 80.2 acre infill industrial storage site is subject to a long-term sale lease-back with a leading operator of liquid storage terminals. Located in the heart of the LA – South Bay submarket, the site is strategically positioned between the Los Angeles-Long Beach port complex and LAX. The investment provides favorable cash flow with an initial 5.0% unlevered cash yield plus the potential longer-term value-add opportunity to redevelop the site into a modern, state-of-the-art industrial facility. 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.
  
• 1010 E. Belmont Street, located in Ontario, CA, within the Inland Empire - West submarket for $14.5 million, or $235 per square foot. The 61,824 square foot, single tenant building on 2.8 acres of land is fully leased at rent estimated to be approximately 55% below market. Upon lease expiration, the Company intends to drive cash flow growth through the renewal of the existing tenant at a market rent or through re-tenanting after execution of value-add improvements including the addition of twelve dock positions. The initial unlevered 3.0% cash yield is projected to grow to a stabilized yield on total investment of 5.5%. According to CBRE, the vacancy rate in the 316 million square-foot Inland Empire – West submarket was 1.0% at the end of the second quarter 2021.

In September, the Company disposed of the following property: 

• 5803 Newton Drive, located in Carlsbad, within the North County San Diego submarket for $18.6 million, or $260 per square foot. The 71,602 square foot building was fully leased at the time of sale. The unlevered IRR on this transaction to the Company is 16.6%. Proceeds from the sale were reinvested into the acquisition of 2500 E. Victoria Street.

About Rexford Industrial

Rexford Industrial, a real estate investment trust focused on creating value by investing in and operating industrial properties throughout Southern California infill markets, owns 279 properties with approximately 35.0 million rentable square feet and manages an additional 20 properties with approximately 1.0 million rentable square feet. For additional information, visit www.rexfordindustrial.com.

Forward-Looking Statements

This press release may contain forward-looking statements within the meaning of the federal securities laws, which are based on current expectations, forecasts and assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward-looking statements by the use of forward-looking terminology such as "may," "will," "should," "expects," "intends," "plans," "anticipates," "believes," "estimates," "predicts," or "potential" or the negative of these words and phrases or similar words or phrases which are predictions of or indicate future events or trends and which do not relate solely to historical matters. While forward-looking statements reflect the Company's good faith beliefs, assumptions and expectations, they are not guarantees of future performance. For a further discussion of these and other factors that could cause the Company's future results to differ materially from any forward-looking statements, see the reports and other filings by the Company with the U.S. Securities and Exchange Commission, including the Company's Annual Report on Form 10-K for the year ended December 31, 2020, and the Company's most recent Form 10-Q. The Company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes.

Contact:

Investor Relations:

Stephen Swett

424 256 2153 ext. 401

investorrelations@rexfordindustrial.com

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SOURCE Rexford Industrial Realty, Inc.

FAQ

What recent acquisitions has Rexford Industrial (REXR) announced?

Rexford Industrial announced the acquisition of two industrial properties totaling 421,824 square feet and an 80.2-acre site for $285.6 million.

What is the financial impact of Rexford Industrial's recent property sales?

Rexford Industrial disposed of a property for $18.6 million, with proceeds reinvested into further acquisitions.

What is the expected cash yield from Rexford Industrial's recent acquisitions?

Initial cash yields from the new acquisitions range from 3.0% to 5.0%, with potential stabilization yields up to 8.2%.

How much has Rexford Industrial (REXR) invested year-to-date?

Rexford Industrial has completed over $1.3 billion in investments year-to-date.