Rexford Industrial Realty plans to redevelop a recently acquired office site in the San Fernando Valley into two industrial facilities.
Los Angees-based Rexford bought the 231,700-square-foot site for $42 million, or around $181 per square foot, according to a Monday announcement from CBRE, which brokered the deal for the seller.
CBRE did not name the seller, but records show it was Laramar, a Chicago firm that bought the office complex for $29.1 million in 2017 in a special servicing deal–meaning the previous owner defaulted on a CMBS loan.
The office property, located at 21415 Plummer Street, is currently 85 percent leased to two tenants — one is the County of Los Angeles, which uses the building to house some operations of its Department of Public Social Services, according to the county’s website.
Once the leases expire, Rexford is planning to demolish the office park and build two industrial properties totaling 182,000 square feet.
With developable land hard to come by across Southern California, and demand for industrial real estate soaring, industrial developers are getting more creative . Rexford has recently turned its sights on older office properties for industrial redevelopment.
The keys to these sorts of redevelopment are zoning and location.
“We need to be able to do industrial by right,” Patrick Schlehuber, Rexford’s head of acquisitions, told TRD in January. The Chatsworth office park comes with 9.1 acres of land zoned for industrial uses.
Rexford’s new site is located just over 1,000 feet away from Topanga Canyon Boulevard, which connects to both the 101 and 118 freeways — two key distribution networks for logistics and e-commerce distribution.
Chatsworth, a suburban neighborhood in the western San Fernando Valley, is getting more industrial sites, fueled by a demand for more space. Xebec Realty Partners and PGIM bought a 300,000-square-foot complex for $37 million in 2019 — around $121 per square foot, showing prices have increased since then.