Rexford continues SoCal spree with deals for industrial land, buildings

Spends $164M on four acquisitions, including shuttered hotel bound for redevelopment

Rexford's Michael (left) Frankel and Howard Schwimmer (right) with 14200 Arminta Street (Rexford, Loopnet)
Rexford's Michael Frankel (left) and Howard Schwimmer (right) with 14200 Arminta Street (Rexford, Loopnet)

Just weeks after closing one flurry of six SoCal purchases, the L.A.-based firm Rexford Industrial Realty has again extended its months-long buying spree.

The REIT bought four more properties in May that total $164 million, the firm announced on Wednesday.

“Our year-to-date investments total $774 million,” Rexford’s co-executives, Howard Schwimmer and Michael Frankel, said in a statement, adding that SoCal’s infill sector was “the nation’s lowest-supply and highest-demand industrial market.”

The four new purchases were spread around Southern California: The REIT bought a roughly two-acre parcel of land in Compton for $10.8 million; a 200,000-square-foot Class A building in Panorama City for $90.2 million; a 44,000-square-foot Class-A building in Ontario for $17.8 million; and a roughly seven-acre piece of industrial land in Fullerton for $45 million.

The Panorama City purchase, at 14200-14220 Arminta Street, came out to $451 per square foot. Rexford was drawn to the space because of the area’s “incredibly low vacancy rate” and the building’s “high-quality tenant,” a long-term lessee who has also made numerous improvements to the space, Michael Bogle, a vice president at CBRE who represented Rexford on the deal, said in a statement. The tenant appears to be Mission Foods, the Texas-based tortilla brand with significant operations in Southern California.

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“This was a true flight-to-quality play,” Bogle added.

With its Fullerton purchase, in northern Orange County, Rexford intends to redevelop a recently shuttered hotel into a warehouse. The firm’s purchase in Ontario — a deal that came out to $404 per square foot, for a one year-old building with a single tenant — is part of a larger trend of surging industrial demand in the two-county Inland Empire, where a flurry of new warehouse construction has also prompted a civic backlash.

Rexford’s $164 million in spending was the latest flurry in what’s been an extended buying spree: In April and early May the REIT bought six properties for a total $153 million, including a 35,000-square-foot building near the Ontario airport for $14.2 million; a roughly six acre storage site in Fontana for $26.2 million; and a 56,000-square-foot building in Santa Fe Springs for $15.5 million.

In December the REIT also spent $270 million to pick up more than 650,000 square feet of industrial space around SoCal, and the firm’s purchases earlier this year included a warehouse in Santa Clarita, an industrial building along the L.A. River and a business park in Long Beach.

Rexford now has over 300 properties that comprise nearly 40 million square feet of rentable space, according to a release. Its recent purchases were made both with cash on hand and the company’s credit line; in the first quarter, the company reported $43.9 million in net income — a 76 percent jump compared to a year earlier that was due to “extraordinary tenant demand,” Frankel said on an earnings call.

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