Rexford Buys Infill Assets with Excess Land

LOS ANGELES—Rexford Industrial, a public REIT, has acquired two infill industrial properties with more than 100,000 square feet of excess land that could augment values in the future. The investor purchased the two fully occupied properties, which are located in the South Bay and the City of Industry, for a total of $29 million. These two transactions bring the firm's year-to-date investments to $96.8 million. 

“Both transactions fit within the Rexford program in terms of being infill product, quality buildings and strong locations within the market,” Howard Schwimmer, co-CEO of Rexford Industrial, tells GlobeSt.com about the two transactions. “They both have extra land and the ability to add a significant amount of dock loading down the road, if and when the tenants were to transition out of the building.” The REIT purchased both properties with the company's credit facility.

Located at 2588 and 2605 Industry Way in Lynwood, the two-building South Bay property has 60,000 square feet of excess paved land that could be separately leased or developed. Rexford purchased the property for $22 million. The primary tenant exercised its right of first refusal and worked with Rexford to complete a long-term sale-leaseback for the property. “They're great buildings for that South Bay market,” adds Schwimmer. “They're located near the 105 freeway with great access to the South Bay and the greater Los Angeles area. We are very excited about those, and we have a very strong credit tenant on the lease. We were able to put together a very long-term lease that for us is well above current returns on transactions you see being done in the market.”

Located at 425 S. Hacienda Blvd. in the City of Industry, the second property has 50,000 square feet of excess land. “The site also has extra land that could be put to work down the road, and it is a phenomenal main-and-main location in the City of Industry,” says Schwimmer. Rexford purchased the property for $7 million, and completed a 10-year sale-leaseback with the tenant. “We were able to structure a 10-year lease at what we believe to be favorable returns above what you would typically see in a marketed transaction,” add Schwimmer. 

Rexford focuses on infill industrial properties because they find better returns. Earlier this month, the company purchased two industrial properties in Santa Fe Springs for a total of $15.4 million.