Rexford Industrial Realty Pays $103M for 5 Properties

29010 Ave. Paine. Image via Google Street View

Rexford Industrial Realty Inc. has acquired a four-building industrial portfolio and an outdoor storage property, all in Southern California, for a total of $103.1 million. Both acquisitions closed on Dec. 31, 2020.

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The portfolio’s seller, which was not identified, contributed its properties in an UPREIT, off-market transaction.

The portfolio consists of four single-tenant industrial properties in the San Fernando Valley, Mid-Counties and Inland Empire West submarkets and was valued at $86.3 million, or $208 per square foot. It totals 414,744 square feet on 25.23 acres. The properties are 100 percent leased at rents that Rexford estimates to be 15 percent below market rates.

The California properties are at:

• 29010 Ave. Paine, Valencia (100,157 square feet);
• 29010 Commerce Center Drive, Valencia (117,151 square feet);
• 13369 Valley Blvd., Fontana (105,041 square feet); and
• 6635 Caballero Blvd., Buena Park (92,395 square feet).

This purchase was completed using 1.8 million newly issued operating partnership units, with a value of $47.93 per share, which the seller can redeem on a one-to-one basis for shares of Rexford’s publicly traded common stock.

Rexford also acquired a 4.83-acre industrial outdoor storage property at 1235 S. Lewis St. in Anaheim, in the Orange County–North submarket, for $16.8 million, or $80 per land square foot. The site is near Anaheim’s Platinum Triangle area and is improved with a 62,480-square-foot building.

Rexford estimates that the rent at which the property is currently leased is 48 percent below market rates. The REIT therefore is considering redeveloping the property with a new 105,100-square-foot Class A distribution facility designed to serve last-mile logistics providers.

Strong surge late in the year

Over the course of 2020, Rexford acquired $1.2 billion in industrial properties, representing 5.0 million square feet. This brought the company’s total portfolio to 248 properties encompassing about 31.5 million square feet.

It was mostly a flurry of activity in the fourth quarter, all of it in Southern California, that got Rexford to such an impressive number:

• In mid-November, the REIT announced the $339 million acquisition of five buildings in Greater Los Angeles.
• In early December, two deals were disclosed, one for an 18-building portfolio next to Van Nuys Airport for $154.6 million, and the other a $129.4 million acquisition of four single-tenant industrial buildings in the Inland Empire.
• And a week before Christmas, Rexford announced that it had acquired, for $110.6 million, a six-building logistics portfolio and an outdoor storage yard.