The high-risk business model of Rexford involves industrial assets in Southern California. Despite potential risks, Southern California’s status as the largest industrial market in the US, due to its role as a gateway for Asian goods, presents opportunities. Although vacancy rates have risen since 2023, they remain lower in Southern California compared to the broader US market.
The region’s advantages include tight supply, limited land availability, and industrial asset conversions to other uses like housing. Rexford’s expertise in asset redevelopment enhances the appeal for potential tenants without increasing supply.
Rexford’s recent performance reflects heightened demand post-COVID-19 peak, leading to rent increases. While occupancy rates have slightly decreased, the company’s strong statistics, such as 95.9% occupancy and substantial rental increases, indicate resilience. Moreover, ongoing capital spending projects for asset redevelopment support future growth.
Despite market concerns about industrial real estate, Rexford, with its focus on a strong market and solid performance, offers a compelling investment opportunity. The current 4.1% dividend yield is attractive, making Rexford potentially appealing for long-term dividend investors.
Consider seizing this opportunity to invest in a well-positioned REIT like Rexford, especially for those looking for stable dividends and long-term growth.
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Reuben Gregg Brewer does not hold any positions in the mentioned stocks. The Motley Fool recommends Rexford Industrial Realty. The Motley Fool adheres to a strict disclosure policy.
