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Rexford (REXR) Boosts Portfolio, Buyouts Reach $1.9B in 2021

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Rexford Industrial Realty, Inc. REXR recently announced shelling out $270 million to acquire eight industrial properties in the prime infill Southern California submarkets. With these buyouts, Rexford’s 2021 acquisition activity reached $1.9 billion. Also, more than $400 million of additional investments are under contract or accepted offer.

The abovementioned properties, acquired in December, were funded using cash in hand and proceeds from forward equity settlements. 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 296 properties, encompassing 37.1 million square feet within the prime infill Southern California "last-mile" submarkets.

According to Howard Schwimmer and Michael Frankel, co-chief executive officers of Rexford, "These eight investments, acquired through off-market and lightly marketed transactions, deliver substantial value creation and result from Rexford's deep, local sharp-shooter market knowledge and relationships, our value-add expertise and proprietary access to the infill Southern California market, the nation's strongest, highest demand and highest-barrier industrial property market."

Rexford acquired a property in the western portion of the City of Industry, CA within the LA — San Gabriel Valley submarket for $28.6 million. In the same submarket, REXR also acquired 2391-2393 Bateman Avenue in Irwindale, for $23.1 million and 1020 Bixby Drive in the City of Industry for $16.4 million.

In the LA — Greater San Fernando Valley submarket, Rexford acquired 2800 Casitas Avenue in Los Angeles for $43 million. Within the LA — South Bay submarket, the company acquired 4240 W. 190th Street in Torrance for $75.3 million and 8911 Aviation Boulevard in Inglewood for $32 million.

Further, Rexford purchased 3071 E. Coronado Street in Anaheim, within the Orange County — North submarket for $28.0 million and 1168 Sherborn Boulevard in Corona, within the Inland Empire — West submarket for $23.4 million.

Per CBRE Group CBRE, at the end of the third quarter of 2021, the vacancy rate was 0.2% in the 159-million-square-foot San Gabriel Valley submarket. Also, according to CBRE Group, the vacancy rate in the 180-million-square-foot Greater San Fernando Valley submarket was 1.1% while 0.6% in the 218-million-square-foot LA — South Bay submarket.

Further, the vacancy rate was 0.9% in the 115-million-square-foot Orange County — North submarket while 0.8% in the 319-million-square-foot Inland Empire — West submarket. This, in turn, reflected solid demand for industrial real estate properties in these markets.

Demand for industrial real estate space has been shooting up amid an e-commerce boom, growth in industries and companies making efforts to improve supply-chain efficiencies. Apart from the fast adoption of e-commerce, logistics real estate is anticipated to benefit from the likely rise in inventory levels over the long haul, thereby opening prospects for Rexford and other industrial REITs like Terreno Realty Corporation TRNO and Prologis PLD.

Rexford is poised to gain traction from its robust market fundamentals, with a low-leverage, fortress-like balance sheet and an impressive acquisition track record.

Shares of Zacks Rank #2 (Buy) REXR have surged 41.3% over the past three months, outperforming its industry’s growth of 13.9%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Prologis carries a Zacks Rank of 2 at present. Prologis’ long-term growth rate is projected at 8.10%.

The Zacks Consensus Estimate for PLD’s first-quarter 2022 funds from operations (FFO) per share has been revised marginally upward in a month.

Terreno Realty holds a Zacks Rank of 2 at present. Terreno Realty’s 2021 revenues are expected to increase 17.8% year over year.

The Zacks Consensus Estimate for TRNO’s 2021 FFO per share has been revised marginally upward in the past two months.

The Zacks Consensus Estimate for CBRE Group’s 2021 earnings per share has moved 1.9% north to $5.30 over the past two months.

CBRE Group’s long-term growth rate is projected at 11.00%. Currently, CBRE sports a Zacks Rank of 2.


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Prologis, Inc. (PLD) : Free Stock Analysis Report

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