Rexford Industrial acquires industrial property For USD15.5m
Rexford Industrial Realty, a real estate investment trust focused on industrial properties located in Southern California infill markets, has acquired industrial asset for USD15.5 million. The acquisition was funded using cash on hand.
"Acquired as a sale-lease-back through an off-market transaction, this investment demonstrates our team's ability to leverage Rexford's proprietary originations capability to deliver a creative solution to a seller seeking to unlock value and capital captive in their real estate," say Howard Schwimmer and Michael Frankel, Co-Chief Executive Officers of the Company. "This transaction is also indicative of our commitment to deliver substantially above-market cash yields by investing within infill Southern California, the nation's largest, highest demand and most supply-constrained industrial market.
"Vernon Avenue is a well located, fully occupied industrial property with a long-term in-place triple net lease, providing a favourable level of recurring cash flow plus the potential for future value-add redevelopment given the relatively low implied value of the underlying land. Looking forward, we believe Rexford is well-positioned with a fortress-like, low-leverage balance sheet to capitalise upon emerging internal and external growth opportunities in order to create value for shareholders."
The Company acquired 720-750 N Vernon Avenue, located in Azusa within the LA – San Gabriel Valley submarket, for USD15.5 million, or USD59 per land square foot. The low coverage property, which was acquired through a sale-lease-back transaction underwritten on a land value basis, comprises 71,692 square feet of buildings on 6.05 acres of land. The property is fully leased on a long-term, triple net basis. The Company intends to harvest cash flow from the in-place lease, and, upon lease expiration, to redevelop the site by constructing a new, substantially larger Class A warehouse/distribution facility. According to CBRE, the vacancy rate in the 153 million square foot LA – San Gabriel Valley submarket was 1.5 per cent at the end of the fourth quarter 2019.