LOS ANGELES – Rexford Industrial Realty, Inc. (NYSE: REXR), a real estate investment trust (REIT), has expanded its industrial property portfolio through the acquisition of approximately 3 million square feet of industrial properties from Blackstone (NYSE:BX) Real Estate. The deal, valued at $1.0 billion, involves 48 properties with a 98% occupancy rate, primarily located in the high-demand areas of Los Angeles and Orange counties.
Executed through separate transactions with various Blackstone entities, including Blackstone Property Partners, Blackstone Real Estate Partners, and Blackstone Real Estate Income Trust, the acquisition averages $332 per square foot.
The properties are expected to generate an initial unlevered cash yield of 4.7% and a stabilized yield of 5.6%. Rexford Industrial funded the investment using proceeds from recent exchangeable senior note offerings and cash on hand.
Co-CEOs of Rexford Industrial, Howard Schwimmer and Michael Frankel, highlighted the strategic nature of the investment in Southern California's industrial market, known for its high barriers and limited supply.
They anticipate that the acquisition will contribute to the company's cash flow growth and long-term value creation. The REIT's investment pipeline currently stands at approximately $300 million, with a combined year-to-date investment of $1.4 billion, targeting an initial yield of around 5%.
David Levine, Co-Head of Americas Acquisitions for Blackstone Real Estate, remarked on the strong demand for high-quality assets in markets like Southern California. Blackstone Real Estate, with over $175 billion in warehouse assets globally, sees logistics as a continued area of focus due to the sector's low vacancy rates.
Rexford Industrial specializes in the infill industrial market of Southern California, boasting a portfolio of 422 properties with about 49.1 million rentable square feet. The company is listed on the New York Stock Exchange and is a member of the S&P MidCap 400 Index.
Blackstone is a leading global real estate investor with $337 billion of capital under management, owning commercial properties across various sectors and regions.
This acquisition is based on a press release statement and includes forward-looking statements subject to risks and uncertainties. Neither Rexford Industrial nor Blackstone Real Estate has provided further comments beyond the press release.
InvestingPro Insights
Rexford Industrial Realty's recent acquisition of prime industrial properties from Blackstone Real Estate not only expands its footprint in the competitive Southern California market but also reflects a strategic move that aligns with the company's growth trajectory. To provide our readers with a deeper financial perspective on Rexford Industrial, here are some key metrics and tips from InvestingPro:
The company boasts a market capitalization of $12.1 billion, indicating its significant presence in the industrial real estate sector. With a P/E ratio standing at 44.78 and adjusting to 51.58 for the last twelve months as of Q4 2023, Rexford Industrial is trading at a high earnings multiple, which suggests investor confidence in its future growth potential.
This is further supported by a robust revenue growth of 26.4% over the same period, demonstrating the company's ability to increase its earnings effectively.
InvestingPro Tips highlight that Rexford Industrial has raised its dividend for 11 consecutive years, showcasing a commitment to returning value to shareholders. Additionally, the company is profitable over the last twelve months, which is a reassuring sign for investors looking for stable earnings. For those interested in a deeper dive, there are a total of 9 additional InvestingPro Tips available for Rexford Industrial, which can be accessed at InvestingPro, offering a comprehensive analysis of the company's financial health and growth prospects.
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As the company prepares for its next earnings date on April 17, 2024, investors will be keenly watching to see how these strategic acquisitions translate into financial performance and whether the company can maintain its trajectory of growth in the dynamic industrial real estate market.
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