REXFORD INDUSTRIAL AND GE REAL ESTATE COMPLETE CREATIVE REFINANCE OF REXFORD INDUSTRIAL FUND I, LLC
Los Angeles, CA, June 13, 2007
Rexford Industrial, LLC, Southern California’s leading, privately held industrial real estate firm, has completed the $68 million refinance of a Rexford Industrial Fund I, LLC (RIF I) portfolio with GE Real Estate’s Strategic Capital Group (SGC).
“Rexford’s commitment to value creation extends beyond acquisition and property repositioning to encompass creative financing that maximizes the economic potential of each asset. This loan was custom crafted by Rexford and GE Real Estate to deliver financing in a flexible package that uniquely achieves Rexford’s key business and investor-related goals,” said Michael Frankel, CFO and partner at Rexford, who was responsible for originating the financing. “Special credit is also due to Chatham Financial, who successfully arranged the debt, and whose structuring expertise proved invaluable,” added Frankel.
This highly flexible loan structure secures fixed-rate pricing for the initial $46 million and favorable variable-rate pricing for the remaining $22 million (which has been effectively fixed in advance through the use of SWAPS), which will allow for capital expenditures and earnout draws through the seven year life of the loan. The entire loan will be held on GE Real Estate’s balance sheet, which also allows Rexford to move properties in and out of the financed pool without defeasance and with nominal friction or administrative costs.
“This creative deal structure allows Rexford to return the vast majority of investors’ invested equity without exceeding conservative levels of leverage on the portfolio, while increasing investors’ quarterly distributions to a level that could exceed 20% annualized return on invested capital,” added Mr. Frankel.
“We are pleased to initiate this relationship with GE, a partner that has demonstrated the entrepreneurial ability to not only help drive our accelerated firm growth, but also to assist Rexford in delivering outstanding value to our investors,” added Howard Schwimmer, Rexford’s Managing Member.
“Rexford Industrial is an experienced local player with a stellar reputation for assessing and optimizing the underlying value of industrial assets in one of the nation’s most desirable and competitive industrial real estate markets in the country,” said Michael Pedone, the SCG Director at GE Real Estate who structured the loan for Rexford. “This is our first transaction with Rexford Industrial and we look forward to providing the firm with other highly structured, customized financing solutions as our relationship grows.”
Since closing Rexford Industrial Fund I in October 2002 and acquiring nearly 1.5 million square feet of value-add industrial properties for the Fund, Rexford has subsequently raised RIF II, RIF III and RIF IV, and currently operates nearly five million square feet of value-add industrial real estate, principally in Southern California. Rexford is focused on creating value through the modernization, re-positioning and re-tenanting of under-utilized and/or mismanaged value-add industrial properties as well as the acquisition and management of well-located core and enhanced core industrial product throughout the Western United States. Rexford is currently acquiring industrial product for its RIF III and RIF IV fund vehicles.
Rexford is a thought leader in industrial real estate. Rexford’s principals have a long and distinguished track record of successful industrial property acquisition, repositioning and disposition, marked by an unmatched, entrepreneurial approach to deal origination and value creation.
About Rexford Industrial
Rexford Industrial LLC (www.rexfordindustrial.com) is a leading industrial real estate firm in Southern California. A well-capitalized private investment company, Rexford invests in all classes and every category of industrial properties. The company combines a uniquely creative, entrepreneurial approach to value creation with a conservative, risk-averse approach to investing that is designed to perform well during all phases of the real estate cycle. Rexford offers brokers unique investment incentives and capitalizes upon an exceptional network of loyal relationships in the industry. With a current portfolio of nearly five million square feet valued at more than $600 million, Rexford is targeting substantial growth through further acquisitions of industrial property. The firm is based in Los Angeles.
About GE Real Estate
GE Real Estate (www.gerealestate.com) is one of the world's premier commercial real estate companies with more than US$59 billion in assets and a presence in 28 countries throughout North America, Europe, Asia, and Australia/New Zealand. Backed by GE's AAA rating, GE Real Estate offers a comprehensive range of capital and investment solutions including equity capital for acquisition or development, as well as fixed and floating rate mortgages for new acquisitions or re-capitalizations of commercial real estate. With a 28% compound annual growth rate since 1993, GE Real Estate is one of the world's fastest growing and most profitable real estate enterprises. This extraordinary record of success grows out of a reputation for collaboration and partnership; a depth of knowledge and experience and a history of building relationships, finding opportunities and opening doors for more than 5,000 owners, builders, borrowers and brokers worldwide.