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Rexford (REXR) Buys Industrial Properties Worth $110.6 Million

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Rexford Industrial Realty, Inc. REXR recently announced shelling $110.6 million for the acquisition of a six-building industrial portfolio and an industrial outdoor storage yard in prime in-fill Southern California markets. With these buyouts, the company’s 2020 acquisition activity has reached $1.12 billion, including $771 million in the fourth quarter.

In Vernon, within the LA — Central sub-market, the company has acquired a six-building industrial portfolio for $93.8 million through an off-market transaction. Comprising single- and multi-tenant buildings encompassing 464,415 square feet on 20.93 acres of land, the properties are fully leased at rents that are below the current market rates, and well poised to function as last-mile distribution and logistics needs in the center of Greater Los Angeles.

In Santa Fe Springs within the LA — Mid-Counties sub-market, the company acquired 12211 Greenstone Avenue for $16.8 million. Developed in 2019, this five-acre industrial outdoor storage yard is presently leased to a national tenant at a rent that is below the current market rates.

These acquisitions funded by using cash on hand are a strategic fit for Rexford. Southern California is considered the nation's highly-valued industrial property market with supply constraints. The Vernon portfolio buyout, particularly, reflects the company’s off-market sourcing advantage and offers scope to stoke rent growth in the upcoming years, while the Greenstone Avenue property, purchased at an attractive land basis, provides an in-demand industrial outdoor storage in a dense in-fill location, per management.

Per CBRE Group CBRE, at the end of the third quarter, the vacancy rate in the 290 million square foot LA — Central submarket was 2.6%, the same in the 112 million square foot LA – Mid Counties submarket was 2.2%, reflecting the solid demand for industrial properties in these markets.

Amid the e-commerce boom and supply-chain strategy transformations, demand for industrial real estate has been encouraging. Warehouse operations have become all the more essential with surging e-commerce customers in light of the coronavirus pandemic. 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 will open up prospects for Rexford and other industrial REITs like Duke Realty Corp. DRE, Prologis PLD and others.

Notably, equipped with a well-capitalized balance sheet and an impressive acquisition pipeline, Rexford is well poised to gain traction from robust market fundamentals.

Shares of this currently Zacks Rank #2 (Buy) company have gained 9% so far in the year, as against the 4.5% decline of its industry. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.


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