Rexford Buys REO Industrial Project for $10M

Michael Frankel, Rexford managing partner, notes that Rexford acquired the property from the lender out of foreclosure. The company says the transaction was facilitated by Rexford's long-standing relationship with the lender and the ability to close rapidly for all-cash without a financing contingency.

Schwimmer says that the purchase price enables Rexford to "offer the suites for lease at competitive rates designed to maximize occupancy and cash flow, despite the uncertain economy." Frankel adds that the price provides Rexford with "great flexibility in our leasing and future sale efforts" for the property.

Frankel explains that the original developer/owner had mapped the entire project as industrial condominiums and sold five of the original 50 units at up to $191 per square foot in mid- to late-2008. Similar units were selling for more than $200 per square foot at the height of the market in 2007, and the current market price for these units is $115 to $120 per square foot, Frankel says. He notes that Rexford has developed its industrial real estate expertise and reputation over nearly 30 years through up and down real estate cycles, which "proved critical towards enabling a successful transaction for both buyer and seller."

According to a previous report on GlobeSt.com, the project was developed by Shaw Properties of Newport Beach and eventually went into receivership with principal Patrick Galentine of Tustin-based Coreland Cos. as receiver and Coreland as property manager during the receivership period. Coreland reports that Steven Hogberg, senior vice president of Coreland's brokerage division, represented the Chicago-based lender.

The 176,003 square feet that Rexford acquired consists of 45 condominium units situated on approximately nine acres of land. The concrete tilt-up condos, which range from 3,221 square feet to 5,020 square feet, are a part of a larger 196,000-square-foot, 50-unit industrial business park previously known as Cornerstone Commerce Center.

The project location is in the Mid-Counties submarket, which remains among the best-performing industrial submarkets in the nation with a sub-5% vacancy rates despite the ongoing economic downturn, Rexford notes. From 1953-2002, a variety of manufacturing facilities occupied the property, which Shaw bought in 2006 before razing the older vintage industrial structures and developing Cornerstone.