Southern California's most active industrial buyer now wants to sell some real estate as the industrial market softens nationally.
Executives with Rexford Industrial Realty, which exclusively invests in Southern California industrial markets, did not say how many properties it wanted to sell or give a timetable for those sales, according to a third-quarter earnings call Thursday. The selling plans come as rental growth for industrial property has cooled and rising interest rates have challenged deals.
Chief Financial Officer Laura Clark said Rexford will provide more updates on dispositions when these deals close. The company sees selling properties as another source of capital it can invest into higher-yielding industrial real estate, Clark said.
Rexford also wants to spend another $400 million on properties, including $245 million on transactions in the San Gabriel Valley market, co-CEO Howard Schwimmer said on the call.
Rexford has spent more than $3.7 billion on industrial properties in the past five years in greater Los Angeles, more than competitors Blackstone Group and Prologis combined, according to CoStar data. The buying spree has been a boon for brokers, too, who have been rewarded for finding properties for Rexford to acquire. The industrial real estate investment trust is not among the top 10 most active sellers in that time period.
Rexford's earnings call took place after San Francisco-based industrial giant Prologis said Tuesday it was lowering its profit outlook as earnings and occupancy fell. Prologis executives blamed geopolitical upheaval and rising interest rates for slowing industrial demand.
Rexford's occupancy, excluding repositioning and redevelopment, was 97.9% as of Sept. 30, up slightly from 97.8% a year earlier, according to a statement. In addition, net income attributable to common shareholders was roughly $59 million in the third quarter, up from $39.3 million in the same time period last year.
Rexford's stock fell more than 5% Thursday afternoon and has dropped 17% this year.