SAN DIEGO—Rexford Industrial Realty has acquired the former Main Postal Annex facility in San Diego, located at 2535 Midway Drive, for $19.3 million, or approximately $52 per square foot. The acquisition was completed with borrowings under the company's line of credit.

“This transaction presents an opportunity to acquire and reposition two prominent industrial buildings in a dense, supply-constrained infill submarket in Central San Diego,” stated Howard Schwimmer and Michael Frankel, co-CEOs of the company. “The acquisition represents an exciting opportunity to create significant value by capitalizing upon a favorable cost basis to reposition a single tenant facility into an industrial complex delivering high-demand industrial spaces in an under-served market. This investment, which brings our year to date acquisition volume to nearly $200 million, is indicative of our value-driven investment approach and ability to source accretive opportunities in our target Southern California infill markets.”

2535 Midway Drive is comprised of two buildings containing an aggregate of 373,000 rentable square feet on 16.05 acres of land in Central San Diego. The repositioning strategy includes an initial phase dividing the ground floor of the two buildings into ten industrial units of 10,000 to 45,000 square feet, totaling approximately 229,000 square feet. Rexford plans to add highly-functional dock-high and ground-level loading, new office areas and abundant surface parking. The second phase calls for repositioning of up to approximately 144,000 square feet of 22-foot clear second-floor area in the larger building. The trust hopes to deliver the initial finished spaces is eighteen months.

Midway Drive is a heavily-traveled main arterial located in the Sports Arena micro market within the Central San Diego submarket, adjacent to the San Diego International Airport and shipping port. The property also benefits from major street frontage in addition to Midway Drive, on Barnett Ave that provides direct access to downtown San Diego, immediate access to major throughways including I-8 and I-5, as well as close proximity to the 52, 15, 163 and 805 freeways. According to CBRE, the vacancy rate in the 80 million square foot Central San Diego submarket was 5.3% at the end of the third quarter 2015.

Rexford Industrial Realty is a real estate investment trust focused on owning and operating industrial properties in Southern California infill markets. The company owns interests in 116 properties with approximately 11.5 million rentable square feet and manages an additional 19 properties with approximately 1.2 million rentable square feet.