Blackstone Sells $1B in Industrial Assets to Rexford

Blackstone Real Estate has sold around three million square feet of industrial properties through two separate transactions to Rexford Industrial Realty for $1 billion, or $332 per square foot.

The combined portfolio comprises 48 properties that are 98% leased. Nearly all of the assets are located within core, infill submarkets in Los Angeles and Orange counties.

The deal is expected to generate a weighted average initial unlevered cash yield of 4.7% and an anticipated stabilized unlevered cash yield of 5.6%. Rexford Industrial funded the purchase using proceeds from its recent exchangeable senior note offerings and cash on hand.

The deal is among Southern California’s largest by total price for industrial properties of the past year, according to a report by CoStar Group. Rafael De Anda, director of market analytics for CoStar Group in Los Angeles told the publication that there’s been a drastic pullback in large portfolio deals involving industrial properties in Southern California since the start of 2023 and that industrial portfolio deals over $1 billion have been rare overall since Blackstone’s $13.4 billion acquisition of an 839-property portfolio from investment firm GLP in September 2019.

A prodigious acquirer, Rexford’s total pipeline comprises approximately $300 million of investments under contract or accepted offer, according to statements by the REIT’s chief executives. That brings the aggregate year-to-date $1.4 billion of investments completed or in the pipeline, to a weighted average 5.0% anticipated initial unlevered cash yield and anticipated 5.7% stabilized unlevered cash yield, they said.

Blackstone Real Estate owns over 50 million square feet of warehouses in Southern California and $175 billion of such assets around the world, according to David Levine, Co-Head of Americas Acquisitions. “Logistics continues to experience near record low vacancy and remains a high conviction theme for Blackstone Real Estate globally.”