Rexford Industrial Realty Acquires Inland Empire Portfolio for $129M

Image by Nick Saltmarsh via Flickr

Rexford Industrial Realty Inc. continues to expand with the acquisition of a portfolio of four single-tenant industrial buildings in Southern California’s Inland Empire for $129.4 million. The acquisition was funded with cash on hand.

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The properties total 632,497 square feet on 30.2 acres, averaging the purchase price to $205 per square foot.

The portfolio is currently 63 percent leased to high-quality national tenants focused on logistics and wholesale trade; lease-up on the vacant space is expected in the near-term, according to Rexford.

The properties, all in the Inland Empire–West submarket, are:

• 4039 State St., Montclair (139,000 square feet);
• 10156 Live Oak Ave., Fontana (236,912 square feet);
• 10694 Tamarind Ave., Fontana (100,000 square feet); and
• 2520 W. Baseline Road, Rialto (156,585 square feet).

The portfolio reportedly consists of newly built, low-finish logistics facilities appealing to a wide range of e-commerce and distribution users with 32-foot clear heights, extensive dock-high loading, ESFR fire sprinklers, and excess container storage in secured truck courts.

Rexford expects the stabilized unlevered yield on its investment in the portfolio to be approximately 4 percent, with ongoing 3 percent or greater annual contractual rent increases thereafter.

The seller(s) were not disclosed. However, the previous owner of the Montclair and Rialto properties was The Carlyle Group, of Washington, D.C., and the previous owner of 10156 Live Oak was  Oakmont Industrial Group, of Atlanta, according to information provided to Commercial Property Executive by CommercialEdge.

Rexford co-CEOs Howard Schwimmer and Michael Frankel noted in a prepared statement that the REIT’s acquisitions so far this year have surpassed $1 billion and that its Southern California portfolio now exceeds 30 million square feet. 

Gone on a tear

Schwimmer and Frankel and their company have indeed been amazingly active buyers in SoCal over roughly the past year.

• Almost simultaneously with the above deal, they announced the $154.6 million purchase of an 18-building industrial portfolio next to the Van Nuys Airport.
• In November, Rexford bought a total of five industrial properties in the Greater Los Angeles area, paying $339 million for more than 1.1 million square feet.
• This past July, the REIT picked up five infill industrial properties in Greater Los Angeles for $73.2 million.
• In March, Rexford acquired a 10-building portfolio of SoCal properties, a mix of single- and multi-tenant assets, for $203.2 million.

These were preceded in late 2019 by two deals that added three buildings to Rexford’s SoCal holdings.

Warehouse and distribution space in the Inland Empire–West submarket saw about 1.4 million square feet of net absorption in the third quarter, on an inventory of 286 million square feet, according to a report from JLL. Average total vacancy is 4.5 percent, and the average asking rent is $.66 per square foot, also according to JLL.