Rexford Industrial Announces Lease-Up of 275,000-Square-Foot, Value-Add-Repositioned Project

Rhea-AI Summary

Rexford Industrial Realty, Inc. (NYSE: REXR) has successfully leased up its 274,885 square-foot value-add-repositioned project at 500 Dupont Avenue in Ontario, California. The property, located in the Inland Empire – West submarket, has been leased to a third-party logistics (3PL) provider. The project underwent significant modernization, including expanded dock-high loading, upgraded ESFR fire sprinklers, new office construction, and a new secured container storage yard.

The lease is set to commence in October 2024, with the project expected to stabilize at an unlevered yield of 5.5%, aligning with the Company's previously published estimates. Rexford Industrial's Co-CEOs, Howard Schwimmer and Michael Frankel, emphasized the Company's strong execution and informational advantage in delivering high-quality, functional products within the infill Southern California market.

Positive

• Successful lease-up of a 274,885 square-foot value-add-repositioned project
• Project expected to stabilize at an unlevered yield of 5.5%, in line with estimates
• Lease commencement set for October 2024, indicating near-term revenue generation
• Significant property improvements likely to attract and retain high-quality tenants

Negative

• None.

Insights

Real Estate Investment Analyst

The lease-up of Rexford Industrial's 275,000-square-foot repositioned project in Ontario is a positive development for the company. The 5.5% unlevered stabilized yield aligns with previous estimates, indicating effective execution of their value-add strategy. This successful lease-up demonstrates Rexford's ability to create value through property improvements and capitalize on the strong demand for industrial space in Southern California's infill markets.

The lease to a 3PL provider reflects the ongoing e-commerce boom and the need for efficient distribution facilities. The property's modernization, including expanded loading docks and a secured container storage yard, caters to the evolving needs of logistics operators. This strategic positioning should help Rexford maintain high occupancy rates and potentially command premium rents in the competitive Inland Empire market.

Investors should note that while this single lease-up is positive, it's important to monitor Rexford's overall portfolio performance and ability to consistently execute similar value-add projects to drive long-term growth.

Industrial Market Specialist

The lease-up of this repositioned project in Ontario underscores the robust demand for high-quality industrial space in the Inland Empire – West submarket. This area continues to be a prime location for logistics operations, given its proximity to major population centers and transportation networks.

The extensive renovations, including the addition of ESFR fire sprinklers and a secured container storage yard, align with the evolving requirements of modern 3PL providers. These improvements not only enhance the property's functionality but also its marketability, potentially allowing Rexford to command higher rents and attract quality tenants.

The success of this project validates Rexford's strategy of focusing on infill Southern California markets, where land constraints and high barriers to entry can lead to favorable supply-demand dynamics. However, investors should remain vigilant about potential market saturation and the impact of economic fluctuations on the industrial real estate sector.

LOS ANGELES, Sept. 9, 2024 /PRNewswire/ -- Rexford Industrial Realty, Inc. (the "Company" or "Rexford Industrial") (NYSE: REXR), a real estate investment trust focused on creating value by investing in and operating industrial properties located throughout infill Southern California, today announced the lease-up of 500 Dupont Avenue, located in Ontario in the Inland Empire – West submarket. 

The newly repositioned 274,885 square-foot building was leased to a third-party logistics (3PL) provider. The value-add-repositioned project included overall building modernization, expansion of dock-high loading, upgraded ESFR fire sprinklers, new office construction and a new, secured container storage yard. The lease commences in October 2024, and the project is expected to stabilize at an unlevered stabilized yield of 5.5%, in line with the estimated stabilized yield that was published in the Company's second quarter Supplemental Financial Reporting Package.

"Rexford Industrial's strong execution and informational advantage across our vertically integrated, entrepreneurial team continue to deliver differentiated product providing the highest quality and functionality available within the infill Southern California market," stated Howard Schwimmer and Michael Frankel, Co-Chief Executive Officers of the Company. "Looking forward, our strategic focus on value-creation will continue to favorably differentiate the Rexford Industrial portfolio and drive long-term shareholder value."

About Rexford Industrial

Rexford Industrial creates value by investing in, operating and redeveloping industrial properties throughout infill Southern California, the world's fourth largest industrial market and consistently the highest-demand with lowest-supply major market in the nation. The Company's highly differentiated strategy enables internal and external growth opportunities through its proprietary value creation and asset management capabilities. Rexford Industrial's high-quality, irreplaceable portfolio comprises 422 properties with approximately 49.7 million rentable square feet occupied by a stable and diverse tenant base. Structured as a real estate investment trust (REIT) listed on the New York Stock Exchange under the ticker "REXR," Rexford Industrial is an S&P MidCap 400 Index member. For more information, please visit www.rexfordindustrial.com.

Forward-Looking Statements

This press release may contain forward-looking statements within the meaning of the federal securities laws, which are based on current expectations, forecasts and assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward-looking statements by the use of forward-looking terminology such as "may," "will," "should," "expects," "intends," "plans," "anticipates," "believes," "estimates," "predicts," or "potential" or the negative of these words and phrases or similar words or phrases which are predictions of or indicate future events or trends and which do not relate solely to historical matters. While forward-looking statements reflect the Company's good faith beliefs, assumptions and expectations, they are not guarantees of future performance. In addition, projections, assumptions and estimates of our future performance and the future performance of the industry in which we operate are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described above. These and other factors could cause results to differ materially from those expressed in our estimates and beliefs and in the estimates prepared by independent parties. For a further discussion of these and other factors that could cause the Company's future results to differ materially from any forward-looking statements, see the reports and other filings by the Company with the U.S. Securities and Exchange Commission, including the Company's Annual Report on Form 10-K for the year ended December 31, 2023. The Company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes.

Contact:

Investorrelations@rexfordindustrial.com

 

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SOURCE Rexford Industrial Realty, Inc.

FAQ

What is the size of the Rexford Industrial property leased in Ontario, California?

The Rexford Industrial property leased in Ontario, California is 274,885 square feet in size.

When will the lease for Rexford Industrial's Ontario property (REXR) commence?

The lease for Rexford Industrial's Ontario property (REXR) is set to commence in October 2024.

What is the expected unlevered stabilized yield for Rexford Industrial's Ontario project (REXR)?

The expected unlevered stabilized yield for Rexford Industrial's Ontario project (REXR) is 5.5%.

What improvements were made to Rexford Industrial's 500 Dupont Avenue property (REXR)?

Improvements to Rexford Industrial's 500 Dupont Avenue property (REXR) included overall building modernization, expanded dock-high loading, upgraded ESFR fire sprinklers, new office construction, and a new secured container storage yard.