Rexford Industrial Announces $339 million of Acquisitions

Rhea-AI Summary

Rexford Industrial Realty announced the acquisition of seven industrial properties in Southern California for approximately $339 million. This investment is part of the company's strategy to leverage its expertise in value-add industrial properties and capitalize on off-market opportunities. Year-to-date, Rexford has made investments totaling $2 billion, with a pipeline of an additional $200 million. The properties, located in prime submarkets, are expected to generate stabilized cash yields between 2.4% and 5.5%. The acquisitions enhance Rexford's portfolio of 344 properties totaling 41.6 million square feet.

Positive

• Strategic acquisition of seven properties for $339 million to enhance portfolio value.
• Year-to-date investments totaling $2 billion, indicating strong growth potential.
• Projected stabilized cash yields between 2.4% and 5.5% from new acquisitions.
• Low-leverage balance sheet positions the company favorably for long-term value creation.

Negative

• None.

– Acquires Seven Properties for $339 Million within Prime Infill Southern California Submarkets –

– Year-to-Date Investments Total $2.0 Billion –

LOS ANGELES, Sept. 7, 2022 /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 throughout infill Southern California, today announced the acquisition of seven industrial properties for an aggregate purchase price of $338.9 million. The purchases were funded using a combination of cash on hand and the Company's line of credit.

"These investments demonstrate Rexford Industrial's unique ability to create value and drive accretive cash flow growth by leveraging our value-add industrial property expertise and proprietary access to well-located, off-market investment opportunities within infill Southern California, the nation's largest and most sought-after industrial market," stated Howard Schwimmer and Michael Frankel, Co-Chief Executive Officers of the Company. "Our deep market penetration enables a highly selective approach to capital allocation, demonstrated by our $2.0 billion of investments year-to-date and pipeline of over $200 million of additional investments under contract or accepted offer, which are projected to generate stabilized return on investment well in-excess of market yields. The Company is favorably positioned with a low-leverage balance sheet to deliver long-term value creation for our shareholders through the execution of our internal and external growth strategies."

In July, August and September, through off-market transactions, the Company acquired:

• 2880 E. Ana Street, Rancho Dominguez, located within the LA – South Bay submarket for $34.6 million or $213 per land square foot. Following the near-term lease expiration, the Company intends to redevelop the 3.7-acre site into an industrial outdoor storage yard. The investment generates an initial 4.1% unlevered cash yield and is projected to grow to an unlevered stabilized cash yield on total investment of 5.2%. According to CBRE, the vacancy rate in the 220 million square foot LA – South Bay submarket was 0.9% at the end of the second quarter 2022.
     
• 17909 and 17929 S. Susana Road, Rancho Dominguez, located within the LA – South Bay submarket for $26.1 million, or $245 per land square foot. The 57,376 square foot, two building property is situated on 2.5 acres and leased at rents estimated to be 45% below current market rates. Upon expiration of the short-term leaseback, the Company intends to redevelop the site into a best-in-class low coverage logistics facility. The investment generates an initial 2.7% unlevered cash yield and is projected to grow to an unlevered stabilized cash yield on total investment of 5.1%.
     
• 21022 - 21034 S. Figueroa Street, Carson, located within the LA – South Bay submarket for $24.2 million, or $473 per square foot. The 51,185 square foot, single-tenant Class-A building is located in close proximity to the I-110 and I-405 freeways and the Ports of Los Angeles and Long Beach. The investment is projected to generate a 4.2% unlevered stabilized cash yield on total investment.
     
• 3901 Via Oro, Long Beach, located within the LA – South Bay submarket for $20.0 million, or $146 per land square foot. At lease expiration, the Company intends to redevelop the fully occupied, industrial-zoned land site with a new 74,000 square foot Class-A industrial building. The site features immediate access to the I-405 and I-710 freeways and is strategically located near the Ports of Los Angeles and Long Beach. The investment generates an initial 4.3% unlevered cash yield and is projected to grow to a 5.0% unlevered stabilized cash yield on total investment.
     
• 920 E. Pacific Coast Highway, Wilmington, located within the LA – South Bay submarket for $100.0 million, or $271 per land square foot. The 148,186 square foot low coverage, port adjacent logistics facility is situated on 8.5 acres along the overweight container trucking corridor and is leased to a single tenant through a long-term sale leaseback. The investment generates an initial 4.1% unlevered cash yield on total investment, growing over time by 4.0% annual contractual increases.
     
• 6000-6052 and 6027-6029 Bandini Boulevard, Commerce and Bell, respectively, located within the LA – Central submarket for $91.5 million, or $501 per square foot. The two fully occupied Class-A buildings total 182,782 square feet on 10.1 acres and are leased at rents estimated to be 35% below current market rates. Upon lease expiration, the Company intends to drive accretive cash flow growth through the renewal of existing tenants or the re-lease following a value-add repositioning plan. The investment generates an initial 2.4% unlevered cash yield and is projected to grow to a 4.8% unlevered stabilized cash yield on total investment. According to CBRE, the vacancy rate in the 271 million square foot LA – Central submarket was 0.8% at the end of the second quarter 2022.
     
• A three-building industrial portfolio in the City of Industry, located within the San Gabriel Valley submarket for $42.5 million, or $374 per square foot. The 113,733 square foot portfolio of fully occupied, Class-A single-tenant buildings, is leased at rents estimated to be 50% below current market rates. The initial 2.4% unlevered cash yield is projected to grow to an unlevered stabilized cash yield on total investment of 5.5%. According to CBRE, the vacancy rate in the 160 million square foot San Gabriel Valley submarket was 0.5% at the end of the second quarter 2022.

About Rexford Industrial

Rexford Industrial creates value by investing in, operating and redeveloping industrial properties throughout infill Southern California, the world's fourth largest industrial market and consistently the highest-demand, lowest supply market in the nation. The Company's highly differentiated strategy enables internal and external growth opportunities through its proprietary value creation and asset management capabilities. Rexford Industrial's high-quality, irreplaceable portfolio comprises 344 properties with approximately 41.6 million rentable square feet occupied by a stable and diverse tenant base. Structured as a real estate investment trust (REIT) listed on the New York Stock Exchange under the ticker "REXR," Rexford Industrial is an S&P MidCap 400 Index member. For more information, please 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, 2021, 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

FAQ

What properties did Rexford Industrial acquire for $339 million?

Rexford Industrial acquired seven industrial properties located in prime Southern California submarkets as part of a $339 million investment.

How much has Rexford Industrial invested year-to-date?

Rexford Industrial has made investments totaling $2 billion year-to-date, including the recent acquisitions.

What is the projected cash yield from Rexford's new acquisitions?

The new acquisitions are projected to generate stabilized cash yields ranging from 2.4% to 5.5%.

What is Rexford Industrial's strategy for growth?

Rexford Industrial focuses on creating value through the acquisition, operation, and redevelopment of industrial properties in Southern California.

How does this acquisition impact Rexford Industrial's portfolio?

The acquisition adds seven properties to Rexford's existing portfolio of 344 properties, expanding their operational footprint and market presence.