One in every of Southern California’s most energetic industrial buyers continues its technique of focusing on infill properties. Rexford Industrial closed on a $100 million off-market acquisition within the Carson submarket, from ACX International, which additionally acts because the property’s sole tenant.
The 148,186-square-foot asset is situated on an 8.5-acre parcel at 920 E. Pacific Freeway in Wilmington. In response to CommercialEdge, the property was accomplished in 1954 and underwent beauty renovation in 1998. It beforehand traded in 2011, when ACX acquired it for $14 million. The low-coverage logistics facility is port-adjacent and located throughout the chubby trucking hall.
Rexford expects to generate a 4.1 p.c unlevered money yield on the funding, rising by 4.0 p.c on annual contractual will increase. The deal was a long-term sale-leaseback transaction, with ACX persevering with to occupy the constructing. The worth equated to $271 per sq. foot, considerably under the market’s common.
READ ALSO: 5 Methods CRE Buyers Can Get Recession-Prepared
This transaction was the most important of the seven acquisitions, which totaled $338.9 million, that Rexford accomplished throughout the third quarter of 2022.
In August, the investor purchased an industrial asset at 2880 E. Ana St. for $35.6 million—or $213 per sq. foot—from Marmon Properties LLC. Upon lease expiration, Rexford intends to redevelop the three.7-acre web site into an industrial outside storage facility. The investor expects to generate a 4.1 p.c unlevered money yield, projected to develop to an unlevered stabilized money yield on complete funding of 5.2 p.c.
One other August acquisition concerned the property at 3901 By way of Oro in Lengthy Seashore, additionally slated for redevelopment upon lease expiration. The location supplies direct entry to interstates 404 and 710 and is located in proximity to the Ports of Los Angeles and Lengthy Seashore. Rexford paid $20 million or $146 per sq. foot for the asset, anticipating an unlevered money yield of 4.3 p.c, projected to develop to five.0 p.c on complete funding.
Different Southern California acquisitions
Rexford’s different third quarter purchases included:
- A two-building property at 17909 and 17929 S. Susana Highway in Rancho Dominguez that bought for $26.1 million, or $245 per sq. foot. This facility is deliberate for a redevelopment right into a low protection logistics facility upon lease expiration.
- A Class A, single-tenant, 51,185-square-foot constructing at 21022-21034 S. Figueroa St. in Carson that traded for $24.2 million, or $473 per sq. foot—considerably above the market common.
- Two totally occupied Class A buildings at 6000-6052 and 6027-6029 Bandini Blvd. that modified palms for $91.5 million or $501 per sq. foot. Upon lease expirations, Rexford plans to resume or re-lease the belongings following a value-add repositioning.
- A 3-building, 113,733-square-foot portfolio within the Metropolis of Business market. These belongings are additionally estimated to be leased at 50 p.c under market fee.
Rexford Industrial has been laborious at work growing its industrial portfolio within the red-hot Southern California infill market. Yr-to-date, Rexford accomplished a complete of $2 billion in industrial acquisitions, with $200 million of extra investments beneath contract or accepted presents.
These current offers have been accomplished within the context of unrelenting demand throughout the Los Angeles market, which recorded $3.2 billion in gross sales as of July, based on CommercialEdge. Los Angeles continued to prime all different metros this 12 months, with gross sales on common netting $291 per sq. foot—barely decrease than 2021’s $297 per sq. foot common. Demand was additionally highlighted by the market’s emptiness, at 1.9 p.c in July, 250 foundation factors decrease than the nationwide common.
