LOS ANGELES—Rexford Industrial has purchased a Southern California industrial portfolio for $88.5 million, or $108 per square foot. The 817,166-square-foot portfolio has nine class-A properties located in Los Angeles, Orange and San Diego Counties. The purchase marks the REIT‘s 11th investment acquisition this year, totaling $185.6 million.
The properties range in size from 46,846 square feet to 126,036 square feet, and have a total of 24 units. The properties average 87% occupancy and have a total of 17 tenants. Six of the buildings are fully occupied with one, located in Orange, has a low 40% occupancy. According to Rexford’s co-CEOs Howard Schwimmer and Michael Frankel, “We plan to execute on a range of opportunities to drive occupancy while enhancing functionality, cash flow and value through strategic repositioning.” They plan to reposition the Orange property and take advantage of the value-add component to create a product type with higher demand in the submarket.
The Orange property isn’t the alone. Rexford plans to reposition most of the properties as leases roll. Improvements to these properties will include increasing loading, warehousing functionality and fire sprinkler capacity. It may also break the existing spaces into smaller units with dock loading to enhance rental income as well. This is especially true for the San Diego properties, which have storefronts and dividing walls in place already.
Rexford is focused on investment opportunities in the Southern California market. This purchase increases its Southern California portfolio significantly. Last year, the company went public, and has since grown its square-footage by 50.3%. Other recent purchases include a two-building industrial property in Ontario for $10.2 million and a two-property portfolio purchased for $21.9 million.