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Rexford's (REXR) Acquisitions Reach $779 Million in 2021 So Far
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Rexford Industrial Realty, Inc. (REXR - Free Report) recently announced shelling $194.4 million for the acquisition of two industrial properties in prime in-fill Southern California submarkets. With these buyouts, the company’s 2021 acquisition activity has reached $779 million so far. Moreover, there are an additional $600 million of new investments under contract or accepted offer.
The above-mentioned properties comprised 629,224 square feet of improvements across eight industrial buildings. Carried out through off-market transactions and funded by using cash-on-hand, the acquisitions are a strategic fit for Rexford. Southern California is considered the United States’ highly-valued industrial property market with supply constraints.
According to Howard Schwimmer and Michael Frankel, co-chief executive officers of the company, "These investments, acquired through off-market transactions, demonstrate the company's programmatic and proprietary approach to identifying exceptionally well-located, off-market investment opportunities with substantial, above-market return on investment and cash flow growth within infill Southern California, the nation's lowest-supply and highest-demand industrial market."
In August, the company acquired 8210-8240 Haskell Ave, in Van Nuys, within the LA — San Fernando Valley submarket, for $12.4 million or $233 per square foot. The stabilized unlevered cash yield on total investment is estimated to begin at 5% upon lease-up with growth anticipated thereafter.
In Torrance, the company has acquired 3100 Lomita Blvd within the LA — South Bay submarket for $182 million or $316 per square foot. Presently leased to three credit tenants on long term leases, the property is poised to generate an initial yield of 5.3%, increasing over time with roughly 3% annual contractual rent escalations.
Per CBRE Group (CBRE - Free Report) , at the end of second-quarter 2021, the vacancy rate was 1.4% in the 182-million-square-foot LA — San Fernando Valley submarket. In addition, the vacancy rate was 0.6% in the 218-million-square-foot LA – South Bay submarket, reflecting solid demand for industrial properties in these markets.
Industrial asset class has grabbed the limelight for showing resilience amid the pandemic with low vacancy rates, high asking rents and robust rent collections. 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 haul. This is opening up prospects for Rexford, and other industrial REITs like Duke Realty Corp. and Prologis (PLD - Free Report) .
Specifically, Rexford is well poised to gain traction from robust market fundamentals, equipped with a well-capitalized balance sheet and an impressive acquisition track record, though surplus supply of industrial real estate is a headwind in some markets.
Image: Bigstock
Rexford's (REXR) Acquisitions Reach $779 Million in 2021 So Far
Rexford Industrial Realty, Inc. (REXR - Free Report) recently announced shelling $194.4 million for the acquisition of two industrial properties in prime in-fill Southern California submarkets. With these buyouts, the company’s 2021 acquisition activity has reached $779 million so far. Moreover, there are an additional $600 million of new investments under contract or accepted offer.
The above-mentioned properties comprised 629,224 square feet of improvements across eight industrial buildings. Carried out through off-market transactions and funded by using cash-on-hand, the acquisitions are a strategic fit for Rexford. Southern California is considered the United States’ highly-valued industrial property market with supply constraints.
According to Howard Schwimmer and Michael Frankel, co-chief executive officers of the company, "These investments, acquired through off-market transactions, demonstrate the company's programmatic and proprietary approach to identifying exceptionally well-located, off-market investment opportunities with substantial, above-market return on investment and cash flow growth within infill Southern California, the nation's lowest-supply and highest-demand industrial market."
In August, the company acquired 8210-8240 Haskell Ave, in Van Nuys, within the LA — San Fernando Valley submarket, for $12.4 million or $233 per square foot. The stabilized unlevered cash yield on total investment is estimated to begin at 5% upon lease-up with growth anticipated thereafter.
In Torrance, the company has acquired 3100 Lomita Blvd within the LA — South Bay submarket for $182 million or $316 per square foot. Presently leased to three credit tenants on long term leases, the property is poised to generate an initial yield of 5.3%, increasing over time with roughly 3% annual contractual rent escalations.
Per CBRE Group (CBRE - Free Report) , at the end of second-quarter 2021, the vacancy rate was 1.4% in the 182-million-square-foot LA — San Fernando Valley submarket. In addition, the vacancy rate was 0.6% in the 218-million-square-foot LA – South Bay submarket, reflecting solid demand for industrial properties in these markets.
Industrial asset class has grabbed the limelight for showing resilience amid the pandemic with low vacancy rates, high asking rents and robust rent collections. 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 haul. This is opening up prospects for Rexford, and other industrial REITs like Duke Realty Corp. and Prologis (PLD - Free Report) .
Specifically, Rexford is well poised to gain traction from robust market fundamentals, equipped with a well-capitalized balance sheet and an impressive acquisition track record, though surplus supply of industrial real estate is a headwind in some markets.
Shares of this currently Zacks Rank #3 (Hold) company have gained 25.2% over the past six months, outperforming its industry’s rally of 18%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Image Source: Zacks Investment Research