Rexford Industrial Realty, Inc. REXR is experiencing solid demand for its properties. Recently, this industrial real estate investment trust (REIT) announced a lease for 274,885 square feet of value-add-repositioned project at 500 Dupont Avenue in Ontario, CA. The property located in the Inland Empire – West submarket was leased to a third-party logistics provider.
Reflecting the positive sentiments of investors, shares of REXR were up 1.4% during Tuesday's regular trading session.
The project underwent overall building modernization, including the expansion of dock-high loading, the installation of upgraded ESFR fire sprinklers, the construction of new office spaces and the establishment of a new, secured container storage yard.
The lease is set to begin in October 2024, with the project anticipated to stabilize at an unlevered stabilized yield of 5.5%.
REXR’s Leasing Update
The leasing activity demonstrates strong tenant demand fundamentals within Rexford's target infill Southern California markets.
In the second quarter of 2024, Rexford reported impressive leasing results. The company executed 60 new leases encompassing 1,033,006 square feet and 69 renewal leases totaling 1,228,905 square feet in the quarter.
From the beginning of 2024 through July 17, 2024, the company stabilized four repositioning projects covering a combined area of 123,019 square feet, which represents a total investment of $66.4 million. The projects achieved a weighted average unlevered stabilized yield on total investment of 9.7%.
Wrapping Up
Apart from the fast adoption of e-commerce, industrial real estate space is anticipated to gain traction over the long run from a likely rise in inventory levels. Given REXR’s solid capacity to offer logistics facilities, it is well-poised to bank on this trend.
Over the past three months, shares of this Zacks Rank #3 (Hold) company have gained 12.2%, compared with the industry’s growth of 17.2%.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks from the broader REIT sector are Cousins Properties CUZ and Lamar Advertising LAMR, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Cousins Properties’ 2024 FFO per share has moved marginally northward over the past two months to $2.66.
The Zacks Consensus Estimate for Lamar Advertising’s current-year FFO per share has been marginally raised over the past two months to $8.09.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.
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