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Rexford (REXR) Continues Expansion, Buys 2 Industrial Properties

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Rexford Industrial Realty, Inc. (REXR - Free Report) recently announced shelling $339.2 million for the acquisition of a four-building industrial complex and a three-tenant industrial property in prime infill Southern California markets. With these buyouts, the company’s 2020 acquisition activity has grossed $729.3 million.

In Whittier, within the LA — Mid-Counties sub-market, the company has acquired Gateway Pointe Industrial Campus located at 3963, 3931, 3735, and 3629 Workman Mill Road for $296.6 million. This 45.12-acre project comprises four Class A industrial buildings containing 989,195 square feet.

In Sylmar within the LA — San Fernando Valley sub-market, the company acquired 13943-13955 Balboa Boulevard through an off-market transaction for $42.6 million. This three-tenant Class A industrial building contains 200,632 square feet on 10.5 acres of land.

These acquisitions, funded using a combination of cash on hand, 1031 exchange proceeds from prior dispositions, assumption of existing debt and operating partnership units, are a strategic fit for Rexford. Southern California is considered the nation's highly-valued industrial property market with supply constraints.

Per CBRE Group (CBRE - Free Report) , at the end of third-quarter 2020, the vacancy rate in the 112 million square foot LA — Mid-Counties sub-market was 2.2%, the same in the 175 million-square-foot LA — San Fernando Valley sub-market was 2.7%, reflecting the solid demand for industrial properties in these markets.

Amid the e-commerce boom and supply-chain strategy transformations, demand for industrial real estate has been encouraging. Warehouse operations have become more essential with surging e-commerce customers in light of the coronavirus pandemic. Apart from the fast adoption of e-commerce, the logistics real estate is anticipated to benefit from the likely rise in inventory levels over the long term. This will open up prospects for Rexford and other industrial REITs like Duke Realty Corp. , Prologis (PLD - Free Report) and others.

Notably, equipped with a well-capitalized balance sheet and an impressive acquisition pipeline with roughly $600 million of new investments under LOI or contract and expected to close in the coming months, Rexford is well poised to gain traction from solid market fundamentals.

Shares of this currently Zacks Rank #3 (Hold) company have gained 37.5% so far in the year compared with the 12.5% decline of its industry. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

 

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