Rexford Industrial Realty isn't slowing down. It has continued its aggressive portfolio expansion this year. In its latest round of acquisitions, the firm purchased six Southern California industrial properties totaling $153 million. Year-to-date, Rexford has spent $610 million on industrial properties in the region.
In keeping with Rexford's standard strategy, the company acquired all six of its most recent purchases through off-market or lightly marketed deals and funded the purchases with cash-on-hand and the company's line of credit. This year, 85% of the company's purchases have been sourced through off-market or lightly markets deals.
The firm completed the latest round of acquisitions in April and May. The list of purchases starts with a development site at 7815 Van Nuys Boulevard in Panorama City that was purchased for $25 million. Rexford will demolish the existing property and build a 77,000-square-foot class-A industrial building, which is projected to generate 4.7% unlevered cash yield on total investment upon initial stabilization.
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Next, Rexford acquired a two-building 66,000-square-foot property at 900-920 Allen Avenue in Glendale for $25 million. The deal is expected to generate an initial 4% unlevered cash yield on total investment, then will grow with 3% annual contractual rent increases, providing the potential for future value-add redevelopment.
In its smallest deal, Rexford then acquired a new construction 35,000-square-foot single tenant building on 1.7 acres of land, is located near the Ontario International Airport at 1154 Holt Boulevard in Ontario for $14.6 million. Upon the lease expiration, the company plans to re-lease the building at market rent, which will ultimately deliver a 3.9% unlevered cash yield on total investment upon stabilization. Similarly, Rexford acquired a 56,000-square-foot single-tenant building for $15.5 million. The property is located at 13535 Larwin Circle in Santa Fe Springs, and has significant upside with rents 60% below current market rates. While the investment has a current 2.5% unlevered cash yield, it is projected to grow to an unlevered stabilized cash yield on total investment of 6.6% through either the renewal of the in-place tenant or a value-add repositioning of the property.
In the firm's two largest acquisitions, it acquired a two-building 124,243-square-foot class-A property for $46.9 million. With rents 50% below market, there is significant upside in the property, generating an initial 2.1% unlevered cash yield that is projected to grow to an unlevered stabilized cash yield on total investment of over 5%. Finally, Rexford acquired an outdoor storage facility for $26.5 million. The property is 92% leased with rents 40% below market. It will generate an initial 1.3% unlevered cash yield is projected to grow to an unlevered cash yield on total investment of 4.8% upon stabilization.
Rexford has an additional $500 million in properties under contract. Last year, Rexford acquired $1.6 billion in industrial assets in Southern California, and it is on track to exceed that number this year.
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Kelsi Maree Borland
