The acquisitions used 1031 trade proceeds, money readily available and cash from the corporate’s fairness choices.
In a 1031 trade, sellers keep away from paying capital features taxes by investing the sale proceeds into a brand new property inside a selected timeframe.
“These transactions reveal Rexford’s deep information, native sharpshooter experience and strategic focus in supply-constrained infill Southern California, the nation’s most sought-after industrial market,” Howard Schwimmer and Michael Frankel, the corporate’s co-chief executives, mentioned in a press release. “Acquired by way of off-market and evenly marketed transactions, these investments contribute favorable present money move plus future value-add alternative to drive superior, long-term worth creation.”
The most important of the acquisitions was at 2500 E. Victoria St. in Rancho Dominguez. Rexford purchased the 80.2-acre web site used for industrial storage for $217 million.
It was offered beneath a sale-leaseback settlement. Below a sale-leaseback, the client instantly leases the property again to the vendor. The vendor receives a money infusion, and the client instantly has a tenant, guaranteeing rental earnings.
The funding, based on Rexford, can have an preliminary 5% money yield and longer-term value-add potential. The corporate mentioned the location may very well be modernized.
Rexford additionally not too long ago acquired an industrial asset at 5772 Jurupa St., in Ontario, for $54 million. The 16.8-acre property holds a 360,000-square-foot constructing with high-
It’s totally leased, however Rexford estimates the rental fee to be 40% under market worth. When the lease expires, the corporate plans to both renew the tenant on a lease renegotiated to market fee or embark on a value-add undertaking and signal a brand new tenant to the property.
As well as, Rexford acquired 1010 E. Belmont St., additionally in Ontario, for $14.5 million. The property contains a 61,824-square-foot constructing sitting on 2.8 acres. It’s totally leased to a single tenant who Rexford estimates is paying 55% under market fee for the realm.
As soon as the tenant’s lease expires, Rexford plans to both renew it at market lease or discover a new tenant after enhancing the property and including 12 dock-high loading positions.
The corporate has been making different acquisitions as effectively. To date this yr, Rexford has made $1.3 billion in investments and has greater than $250 million of recent investments both beneath contract or in accepted presents.
“The corporate is well-positioned with a low-leverage, fortress-like steadiness sheet to generate long-term money move progress and worth for our shareholders by way of our demonstrated inside and exterior progress methods,” Schwimmer and Frankel mentioned in a press release.
Regardless of the corporate’s acquisition tear, it has additionally unloaded one property. In September, Rexford offered 5803 Newton Drive, in Carlsbad, for $18.6 million.
The property was totally leased on the time of the sale.
Cash from the sale of the 71,602-square-foot constructing was used within the 2500 E. Victoria St. buy.
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