Elliott Investment Grabs Major Stake in Rexford Industrial

A New York-based activist investor and hedge fund operator is making a major play for Los Angeles-based real estate investment trust Rexford Industrial Realty.

Elliott Investment Management has built an active stake in Rexford Industrial Realty, Bloomberg reported, citing sources close to the matter. In doing so, the hedge fund becomes one of the top five investors in the REIT. Representatives for Rexford and Elliott haven’t commented on the deal.

Elliott’s move is not a surprise to some analysts. In January, Deutsche Bank predicted a company might make a bid for Rexford’s portfolio, noting that the Southern California market could present a prime long-term opportunity for private and public investors looking to grow their profile.

Southern California’s industrial market would be the fourth-largest globally by square feet in considered among nations, trailing the rest of the U.S., China and Japan. That’s due to factors such as proximity to two major seaports, extensive roadway and rail links, and a sprawling industrial market across the Inland Empire and Gateway Cities.

Elliott is known for being a direct investor in real estate equity and high-yield debt, according to Bloomberg. It often operates as an activist investor, agitating for changes to the leadership and operations of companies once it takes stakes. It also

Rexford went public in 2013 and has been growing its warehouse portfolio through acquisitions, according to Bloomberg. This included an acquisition of 48 properties from Blackstone Real Estate last year in a $1 billion transaction.

Rexford’s market value currently sits at $9.9 billion and has an enterprise value of $13.3 billion, per Bloomberg. Over the past year, the company’s shares have dropped 23 percent; by contrast, the U.S. REITs index only fell 2.4 percent during that time. In the second quarter, the firm saw a $113 million increase in profits compared to the same period the year prior.

Earlier this year, it was involved in a deal to take Vancouver-based City Office REIT private. Last month, Elliott bought debt tied to the distressed 101 Mission Street office building in San Francisco. Also last month, Elliott grew its stake in prominent data center real estate investment trust Equinix — a move possibly done in anticipation of the Bay Area’s growing AI sector.

In 2023, Houston-based telecommunications company and real estate investment trust Crown Castle began reviewing its fiber business as part of an agreement with Elliott, per Bloomberg. Some Elliott employees also gained seats on the REIT’s board at the time. — Chris Malone Méndez