Newport Beach-based CT Realty Investors is selling a portion of its industrial real estate holdings in Orange County as part of a $191 million portfolio deal with a real estate investment trust.
Rexford Industrial Realty Inc., an L.A.-based investor of industrial properties in Southern California that has a market value of about $1 billion, last week announced it had entered into a deal to buy a portfolio of nine properties totaling a little more than 1.5 million square feet from affiliates of CT Realty.
The deal, which hasn’t yet closed, includes five industrial properties in Orange County totaling nearly 735,000 square feet.
Notable properties to change hands include 12131 Western Ave., a 208,000-square-foot building in Garden Grove that’s served as the headquarters of Money Mailer LLC since 2007.
Also trading hands: 20 Icon, a 105,000-square-foot building in Foothill Ranch that’s used by Cox Communications Inc. for its local headquarters; 9 Holland, a 185,000-square-foot industrial building off Bake Parkway in the Irvine Spectrum; and two properties in Santa Ana.
Properties in the San Gabriel Valley and the San Diego County city of Poway also are part of the deal, along with a pair of recently built industrial facilities in the Inland Empire city of Fontana.
The deal works out to about $125 per square foot for the portfolio, which is located on about 80 acres of land.
The nine buildings are fully leased to a total of 12 tenants, whose leases run an average of 4.5 years, according to Rexford Industrial, which had an OC industrial portfolio of about 1.5 million square feet prior to the deal.
The purchase “enables the company to expand our operating leverage as we increase our square footage by 50% in Orange County, in particular, which is one of our key target markets,” Rexford officials said in a statement.
Rexford raised $224 million in an initial public offering in 2013 and has since focused its acquisition push on Orange County’s industrial market, along with mature markets in other sections of Southern California. Its 121-building portfolio runs a little more than 12 million square feet.
It previously bought another local property from CT Realty—7311 Nichols Lane, a fully leased, 102,700-square-foot industrial building in Huntington Beach that sold last December for about $17.1 million, according to property records.
The latest acquisition is expected to close in the second quarter, according to Rexford.
The company said it plans to fund it through a $125 million term loan it recently closed that can increase its credit limit by an additional $100 million.
More CT Deals
The $191 million sale looks to be a money-maker for privately held CT Realty and its main investor in the portfolio—said to be one of the country’s largest private endowments.
An affiliate of the company bought the seven existing industrial facilities that are part of the transaction for about $120 million in a series of deals between 2013 and 2015, according to brokerage records and company statements.
The two newly built properties in Fontana, which total about 358,000 square feet, had an expected development cost of about $28 million, CT Realty said when the project was first announced in 2014.
A number of the OC properties that are trading hands had significant vacancies at the time CT Realty bought them.
The company remains on the lookout for additional industrial purchases in OC and other markets, said CT Realty Chief Executive James “Watty” Watson. The company has another investment fund that should allow for some $450 million in acquisitions, he said last week.
CT Realty has been an active developer of large industrial facilities outside of Orange County, particularly in the Inland Empire and in Texas, where it has a $500 million industrial project called Southport Logistics Park in the works.
It’s partnering with Seal Beach-based Xebec Realty Partners for the Texas project, where walls recently went up for its first 1-million-square-foot building. The project, about 12 miles south of downtown Dallas, is one of the largest industrial developments planned in the U.S.
CT Realty also has a pipeline of about 3.5 million square feet of for-sale industrial buildings under way in Southern California, through a venture with Madison, N.J.-based Prudential Real Estate Investors.
The company’s been a more active investor in office properties than industrial facilities in OC over the past year.
Last year, it paid about $30 million for a three-building office complex in Lake Forest that’s home to the headquarters of Del Taco Holdings Inc.
In January, it paid about another $20.5 million for Centrum South, a five-story office just south of the Garden Grove (22) Freeway.
The company also is developing a 25-acre former U.S. Postal Service site in Aliso Viejo into a mixed-use property emphasizing medical uses.
