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920 E. Pacific Coast Highway
One of Southern California’s most active industrial investors continues its strategy of targeting infill properties. Rexford Industrial closed on a $100 million off-market acquisition in the Carson submarket, from ACX Global, which also acts as the property’s sole tenant.
The 148,186-square-foot asset is located on an 8.5-acre parcel at 920 E. Pacific Highway in Wilmington. According to CommercialEdge, the property was completed in 1954 and underwent cosmetic renovation in 1998. It previously traded in 2011, when ACX acquired it for $14 million. The low-coverage logistics facility is port-adjacent and situated within the overweight trucking corridor.
Rexford expects to generate a 4.1 percent unlevered cash yield on the investment, growing by 4.0 percent on annual contractual increases. The deal was a long-term sale-leaseback transaction, with ACX continuing to occupy the building. The price equated to $271 per square foot, somewhat below the market’s average.
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This transaction was the largest of the seven acquisitions, which totaled $338.9 million, that Rexford completed during the third quarter of 2022.
In August, the investor bought an industrial asset at 2880 E. Ana St. for $35.6 million—or $213 per square foot—from Marmon Properties LLC. Upon lease expiration, Rexford intends to redevelop the 3.7-acre site into an industrial outdoor storage facility. The investor expects to generate a 4.1 percent unlevered cash yield, projected to grow to an unlevered stabilized cash yield on total investment of 5.2 percent.
Another August acquisition involved the property at 3901 Via Oro in Long Beach, also slated for redevelopment upon lease expiration. The site provides direct access to interstates 404 and 710 and is situated in proximity to the Ports of Los Angeles and Long Beach. Rexford paid $20 million or $146 per square foot for the asset, expecting an unlevered cash yield of 4.3 percent, projected to grow to 5.0 percent on total investment.
Other Southern California acquisitions
Rexford’s other third quarter purchases included:
- A two-building property at 17909 and 17929 S. Susana Road in Rancho Dominguez that sold for $26.1 million, or $245 per square foot. This facility is planned for a redevelopment into a low coverage logistics facility upon lease expiration.
- A Class A, single-tenant, 51,185-square-foot building at 21022-21034 S. Figueroa St. in Carson that traded for $24.2 million, or $473 per square foot—significantly above the market average.
- Two fully occupied Class A buildings at 6000-6052 and 6027-6029 Bandini Blvd. that changed hands for $91.5 million or $501 per square foot. Upon lease expirations, Rexford plans to renew or re-lease the assets following a value-add repositioning.
- A three-building, 113,733-square-foot portfolio in the City of Industry market. These assets are also estimated to be leased at 50 percent below market rate.
Rexford Industrial has been hard at work increasing its industrial portfolio in the red-hot Southern California infill market. Year-to-date, Rexford completed a total of $2 billion in industrial acquisitions, with $200 million of additional investments under contract or accepted offers.
These recent deals were completed in the context of unrelenting demand within the Los Angeles market, which recorded $3.2 billion in sales as of July, according to CommercialEdge. Los Angeles continued to top all other metros this year, with sales on average netting $291 per square foot—slightly lower than 2021’s $297 per square foot average. Demand was also highlighted by the market’s vacancy, at 1.9 percent in July, 250 basis points lower than the national average.
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