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Rexford (REXR) Enhances Portfolio, Buyouts Reach $1.4B in '21

Rexford Industrial Realty, Inc. REXR recently announced shelling out $125.9 million to acquire five industrial properties in the prime in-fill Southern California submarkets. With these buyouts, Rexford’s 2021 acquisition activity has reached $1.4 billion. Also, more than $300 million of acquisitions are under contract or accepted offer.

The above-mentioned properties, acquired in October and November, were funded through a combination of 1031 disposition proceeds and cash on hand. These acquisitions are a strategic fit for Rexford. Southern California is considered a highly valued industrial property market with supply constraints in the United States.

According to Howard Schwimmer and Michael Frankel, co-chief executive officers of Rexford, "These investments demonstrate Rexford's ability to leverage our value-add expertise and proprietary access to the nation's strongest and most highly valued industrial market to generate substantially above-market cash yields and return on investment."

Rexford has acquired 21515 Western Avenue in Torrance, within the Los Angeles — South Bay submarket, for $19 million. In Santa Fe Springs, within the Los Angeles — Mid-Counties submarket, the company has taken over 12027 Greenstone Avenue for $8.1 million. In Commerce, CA, within the Los Angeles — Central submarket, the company has purchased 6027 Eastern Avenue for $23.3 million.

Further, Rexford purchased 340-344 Bonnie Circle, in Corona, CA, within the Inland Empire — West submarket for $27 million and 14100 Vine Place, in Cerritos, CA, within the Los Angeles — Mid-Counties submarket for $48.5 million.

Per CBRE Group CBRE, at the end of the third quarter of 2021, the vacancy rate was 0.6% in the 218-million-square-foot Los Angeles — South Bay submarket and 0.2% in the 112-million-square-foot Los Angeles — Mid-Counties submarket. Also, according to CBRE Group, the vacancy rate in the 273-million-square-foot Los Angeles — Central submarket was 1.9%, while the same in the 319-million-square-foot Inland Empire — West submarket was 0.8%, reflecting solid demand for the industrial properties in these markets.

Apart from these acquisitions, Rexford also announced the disposition of 2670-2674 Walnut Street and 89-91 San Gabriel Boulevard, in Pasadena, within the Greater San Gabriel Valley submarket for $11.7 million. This investment’s unlevered internal rate of return is 20.7% and the company reinvested the sale proceeds into the acquisition of 340-344 Bonnie Circle.

Demand for industrial real estate space has been shooting up amid an e-commerce boom, growth in industries and companies making efforts to improve supply-chain efficiencies. Apart from the fast adoption of e-commerce, logistics real estate is anticipated to benefit from the likely rise in the inventory levels over the long haul, opening prospects for Rexford and other industrial REITs like Duke Realty Corp. DRE and Prologis PLD.

Rexford is well poised to gain traction from its robust market fundamentals, equipped with a low-leverage, fortress-like balance sheet and an impressive acquisition track record.

Shares of Zacks Rank #2 (Buy) REXR have gained 17.3% over the past three months, outperforming its industry’s rally of 2.1%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Prologis also holds a Zacks Rank of 2 at present. Its 2021 funds from operations (FFO) per share will likely increase 8.2% year over year.

The Zacks Consensus Estimate for Prologis’ 2021 FFO per share has been revised marginally upward in a month.

Duke Realty holds a Zacks Rank of 2 at present. Its long-term growth rate is projected at 7.90%.

The Zacks Consensus Estimate for Duke Realty’s 2021 FFO per share has been revised marginally upward in a month to $1.74.

The Zacks Consensus Estimate for CBRE Group’s ongoing-year earnings per share has moved 1.9% north to $5.30 over the past week.

The Zacks Consensus Estimate for CBRE Group’s 2021 earnings per share suggests an increase of 62.1% year over year. Currently, CBRE Group carries a Zacks Rank of 1.

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Prologis, Inc. (PLD): Free Stock Analysis Report
Duke Realty Corporation (DRE): Free Stock Analysis Report
Rexford Industrial Realty, Inc. (REXR): Free Stock Analysis Report
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