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Rexford (REXR) Boosts Portfolio, Investments Reach $1.5B in 2023
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Rexford Industrial Realty, Inc. (REXR - Free Report) recently announced that it shelled out $69.5 million to acquire two industrial properties in the prime infill Southern California submarkets and the disposition of one property for $11.3 million in December. With these, Rexford’s 2023 investments reached $1.5 billion. Also, REXR presently holds a near-term pipeline, with around $75 million in new investments either under contract or with accepted offers.
The abovementioned properties, acquired in December, were funded using proceeds from forward equity settlements, cash on hand and 1031 disposition proceeds. These acquisitions are a strategic fit for Rexford as Southern California is considered to be a highly valued industrial property market, with supply constraints in the United States. With such expansion efforts, the company's total portfolio now comprises 373 properties, encompassing 45.8 million square feet located throughout infill Southern California.
According to Howard Schwimmer and Michael Frankel, the co-chief executive officers of Rexford, "Rexford Industrial's investment activity highlights the Company's continued ability to leverage its value-add expertise and proprietary market access within infill Southern California to drive substantial value creation."
Specifically, Rexford acquired 600-708 E. Vermont Avenue, Anaheim, in the OC — North submarket, for $57 million. Subsequent to a short-term leaseback, REXR has plans to redevelop the 12.1-acre site into a 264,000-square-foot divisible class A building. This value-added investment is estimated to generate a 6.7% unlevered stabilized cash yield on total investment.
In the LA — San Gabriel Valley submarket, Rexford acquired 11234 Rush Street, South El Monte, for $12.5 million. REXR plans to redevelop the vacant 4.7-acre land site into a 102,000-square-foot class A industrial building. This investment is expected to generate a 6.4% unlevered stabilized cash yield on total investment.
Per CBRE Group (CBRE - Free Report) , at the end of the third quarter of 2023, the vacancy rate was 0.9% in the 117 million square foot OC — North submarket. Also, according to CBRE Group, the vacancy rate in the 161 million square foot LA — San Gabriel Valley submarket was 1.5%.
Meanwhile, Rexford disposed of 3720-3750 W. Warner Avenue, Santa Ana, in the OC — Airport submarket, for $11.3 million. The unlevered IRR on the transaction to REXR is 28%, and the company reinvested the proceeds from the sale into the acquisition of 600-708 E. Vermont Avenue.
Rexford is poised to gain traction from its healthy market fundamentals, with a low-leverage balance sheet and selective approach to capital allocation.
Shares of Zacks Rank #2 (Buy) REXR have risen 6.4% over the past month, outperforming its industry’s growth of 5%.
The Zacks Consensus Estimate for First Industrial Realty Trust’s 2023 FFO per share of $2.43 suggests a 6.6% increase year over year.
The consensus mark for Park Hotels & Resorts’ current-year FFO per share has moved marginally north over the past month to $2.03.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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Rexford (REXR) Boosts Portfolio, Investments Reach $1.5B in 2023
Rexford Industrial Realty, Inc. (REXR - Free Report) recently announced that it shelled out $69.5 million to acquire two industrial properties in the prime infill Southern California submarkets and the disposition of one property for $11.3 million in December. With these, Rexford’s 2023 investments reached $1.5 billion. Also, REXR presently holds a near-term pipeline, with around $75 million in new investments either under contract or with accepted offers.
The abovementioned properties, acquired in December, were funded using proceeds from forward equity settlements, cash on hand and 1031 disposition proceeds. These acquisitions are a strategic fit for Rexford as Southern California is considered to be a highly valued industrial property market, with supply constraints in the United States. With such expansion efforts, the company's total portfolio now comprises 373 properties, encompassing 45.8 million square feet located throughout infill Southern California.
According to Howard Schwimmer and Michael Frankel, the co-chief executive officers of Rexford, "Rexford Industrial's investment activity highlights the Company's continued ability to leverage its value-add expertise and proprietary market access within infill Southern California to drive substantial value creation."
Specifically, Rexford acquired 600-708 E. Vermont Avenue, Anaheim, in the OC — North submarket, for $57 million. Subsequent to a short-term leaseback, REXR has plans to redevelop the 12.1-acre site into a 264,000-square-foot divisible class A building. This value-added investment is estimated to generate a 6.7% unlevered stabilized cash yield on total investment.
In the LA — San Gabriel Valley submarket, Rexford acquired 11234 Rush Street, South El Monte, for $12.5 million. REXR plans to redevelop the vacant 4.7-acre land site into a 102,000-square-foot class A industrial building. This investment is expected to generate a 6.4% unlevered stabilized cash yield on total investment.
Per CBRE Group (CBRE - Free Report) , at the end of the third quarter of 2023, the vacancy rate was 0.9% in the 117 million square foot OC — North submarket. Also, according to CBRE Group, the vacancy rate in the 161 million square foot LA — San Gabriel Valley submarket was 1.5%.
Meanwhile, Rexford disposed of 3720-3750 W. Warner Avenue, Santa Ana, in the OC — Airport submarket, for $11.3 million. The unlevered IRR on the transaction to REXR is 28%, and the company reinvested the proceeds from the sale into the acquisition of 600-708 E. Vermont Avenue.
Rexford is poised to gain traction from its healthy market fundamentals, with a low-leverage balance sheet and selective approach to capital allocation.
Shares of Zacks Rank #2 (Buy) REXR have risen 6.4% over the past month, outperforming its industry’s growth of 5%.
Image Source: Zacks Investment Research
Other Stocks to Consider
Some other top-ranked stocks from the REIT sector are First Industrial Realty Trust, Inc. (FR - Free Report) and Park Hotels & Resorts (PK - Free Report) . PK sports a Zacks Rank #1 (Strong Buy), while FR carries a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for First Industrial Realty Trust’s 2023 FFO per share of $2.43 suggests a 6.6% increase year over year.
The consensus mark for Park Hotels & Resorts’ current-year FFO per share has moved marginally north over the past month to $2.03.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.