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Rexford (REXR) Boosts Portfolio, Acquisitions Reach $1.03B in 2021

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Rexford Industrial Realty, Inc. (REXR - Free Report) recently announced shelling $250.5 million for the acquisition of four industrial properties in the prime in-fill Southern California submarkets. With these buyouts, the company’s 2021 acquisition activity has reached $1.03 billion so far. Moreover, there are $375 million of additional investments under contract or accepted offer.

The above-mentioned properties, which were acquired in late August and early September, comprised a total of 837,500 square feet of improvements. Funded by using cash on hand and proceeds from forward equity settlements, 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, "Through our proprietary originations platform, we continue to leverage our deep local sharp-shooter advantage together with our value-add redevelopment expertise to enable superior return on investment and favorable cash flow growth.”

The company acquired 1801 E. St. Andrew Place, in Santa Ana, within the Orange County — Airport submarket for $105.3 million. Fully leased long-term to two credit tenants, this investment is estimated to generate an initial 5.6% unlevered cash yield, with a 2.5% average contractual annual rent escalations.

In Orange, the company has acquired 2401-2421 N. Glassell Street, within the Orange County — North submarket for $70 million. In addition, through an off-market transaction, the company has acquired the 4-acre vacant site at 2390-2444 N. American Way, in Orange, within the Orange County — North submarket for $16.7 million. In Ontario, CA, the company has acquired 500 S. Dupont Avenue within the Inland Empire — West submarket for $58.5 million.

Per CBRE Group (CBRE - Free Report) , at the end of second-quarter 2021, the vacancy rate was 2.6% in the 68-million-square-foot Orange County — Airport submarket. In addition, the vacancy rate was 1.4% in the 115-million-square-foot Orange County — North submarket, while the vacancy rate was 1% in the 316-million-square-foot Inland Empire — West 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 its robust market fundamentals, equipped with a well-capitalized balance sheet and an impressive acquisition track record.

Shares of this Zacks Rank #2 (Buy) company have gained 20.6% over the past six months, outperforming its industry’s rally of 14.4%.

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