Blackstone Sells $1 Billion Southern California Industrial Portfolio to Rexford Industrial Realty
In a major real estate transaction, global investment giant Blackstone has sold a 48-property portfolio of Southern California industrial buildings to investment trust Rexford Industrial Realty in a whopping $1 billion deal. The announcement of this massive deal was made by the companies on Thursday.
The properties included in the deal are primarily located in Los Angeles and Orange counties, totaling more than 3 million square feet. While a full list of properties was not disclosed, it was revealed that the portfolio is 98% leased, with 99% of the square footage concentrated in core, infill regions of the two counties.
Rexford, known as one of California’s most active industrial investors, plans to fund the purchase with cash on hand and the proceeds from a recent senior note offering. The company’s co-chief executive officers, Howard Schwimmer and Michael Frankel, expressed their excitement about the acquisition, highlighting the strategic value of investing in high-quality assets in the highly competitive Southern California industrial market.
David Levine, co-head of Americas acquisitions for Blackstone Real Estate, described the deal as “an excellent outcome for our investors,” emphasizing the strong institutional demand for high-quality assets in markets like Southern California. Despite the sale, Blackstone still retains ownership of over 50 million square feet of warehouses in the region and a global logistics portfolio valued at $175 billion.
The Southern California industrial market has been experiencing high demand, driven by factors such as e-commerce growth and the need for fast deliveries. However, industrial vacancy rates in the region remain low, with limited new development due to factors like land availability and pricing.
Rafael De Anda, director of market analytics for CoStar Group in Los Angeles, noted that industrial rent growth in the region has plateaued, but there are still investment opportunities to be found. The deal between Blackstone and Rexford is significant, as large portfolio deals in the industrial sector have been rare since Blackstone’s massive acquisition in 2019.
Overall, the sale of the 48-property portfolio represents a major milestone in the Southern California real estate market, showcasing the continued interest and investment in the region’s industrial properties.