Rexford Industrial Takes 3, Sells 1

By Ariela Moraru

14820 Carmenita Road in Norwalk, Calif.

Rexford Industrial Realty Inc. has acquired three industrial properties in three separate transactions for a total of $71.5 million. The fully leased assets are located in the Southern California tight infill submarkets of Los Angeles-Mid Counties, Inland Empire and South Bay. The recent buy brings Rexford’s 2017 industrial acquisition volume to more than $282 million. Additionally, the company has disposed of an industrial property in Orange County for $18.7 million.

“The acquisitions leveraged our on- and off-market transaction sourcing and provide attractive opportunities to capture market rent upside with the implementation of value-add functional improvements and deferred maintenance repairs upon lease expirations,” said Rexford CEOs Howard Schwimmer and Michael Frankel in prepared remarks.

Rexford purchased the following properties:

• 14820-30 Carmenita Road and 13555 Excelsior Drive in Norwalk
• 3002-3072 Inland Empire Blvd. in Ontario
• 17000 Kingsview Ave./800 Sandhill Ave. in Carson

Rental upside

The company purchased the first property for $30.7 million or approximately $155 per square foot. Located on 12 acres at 14820-30 Carmenita Road and 13555 Excelsior Drive in Norwalk, Calif., just off Interstate 5, the property consists of three buildings totaling 198,062 square feet. The buildings are fully leased to four tenants at rents that are approximately 17 percent below market. The two-tenant building features 30-foot clear-height, high-image frontage and a favorable ratio of dock-high loading. The two single-tenant buildings provide excess land for outside storage. According to CBRE, the vacancy rate in the 109 million-square-foot Los Angeles-Mid Counties submarket was 0.9 percent at the end of the first quarter 2017.

The asset at 3002-3072 Inland Empire Blvd. in Ontario, Calif., traded for $26.9 million or approximately $123 per square foot. The four multi-tenant industrial buildings total 218,407 square feet on 10.8 acres and are fully leased to nine tenants. The property has small- to mid-sized dock-high units and modern functionality including 24-foot warehouse clearance. The company plans to perform substantial maintenance, which will help rents increase, which are currently 20 percent below market rate. The property features significant frontage on Interstate 10 and is two miles from Ontario Airport. According to CBRE, the vacancy rate in the 281 million-square-foot Inland Empire West submarket was 2.1 percent at the end of the first quarter 2017.

The company also bought a 100,121-square-foot building in Carson, Calif., for $14 million or $140 per square foot. Located at 17000 Kingsview Ave./800 Sandhill Ave. on 3.9 acres, the property is fully leased to two tenants, including a leaseback executed with the seller during escrow. The property has premium office improvements and features 24-foot clear-height and a suitable dock-high door ratio. The company plans to implement a modest capital improvement program following lease expiration to capture rental rate upside. The property is well located within Carson’s CA 91 freeway industrial corridor, with easy access to five major freeways and is only 15 miles from the LA and Long Beach ports. According to CBRE, the vacancy rate in the 220 million-square-foot South Bay submarket was 0.6 percent at the end of the first quarter 2017.

Tenant exercised purchase option

2811 S. Harbor Blvd., Santa Ana, Calif.

Separately, the company sold 2811 S. Harbor Blvd. in Santa Ana, Calif., for approximately $18.7 million or $148 per square foot. Rexford purchased the single tenant 126,796-square-foot industrial building on 5.6 acres in 2016 as part of a portfolio. The company sold the asset built in 1977 to the in-place tenant, Robinson Pharma Inc., who exercised its purchase option. Proceeds from the sale were used to fund a portion of the Carmenita Norwalk acquisition.

Images via Yardi Matrix