EQT Real Estate Makes $1.2B Buy of Logistics Portfolio in Southern California
EQT Real Estate has made a major bet in the logistics sector, acquiring a 5.2 million square foot portfolio in Southern California, an area that's home to millions of residents.
Rexford Industrial, which was the seller of the 32 buildings, reported the transaction to be worth roughly $1.2 billion. The investment firm used its EQT Real Estate Industrial Value Fund VI to fund the purchase.
The portfolio can be broken down into two parts of SoCal. Most of the square footage (greater than 50 percent) spans across Los Angeles, Orange County, the South Bay and San Gabriel Valley. The remaining 46 percent is positioned in the Inland Empire West, which is near the Ontario International Airport.
These markets represent a big population opportunity; LA and the Inland Empire alone host about 17.7 million residents, with as many as 25 million people living within 250 miles of each region.
Plus, the fundamentals provide tailwinds. According to Matthew Brodnik, global chief investment officer at EQT Real Estate, Southern California's industrial sector as a whole benefits from limited supply.
Coastal infill regions have hosted occupancy rates that range between 93 percent and 94 percent, according to EQT. The portfolio is 96 percent leased to 36 tenants.
"This acquisition reflects our ability to move quickly and decisively on a portfolio of this scale and complexity. With 36 tenants across a diverse set of industries, the assets provide a granular, well-established income base from day one, and we see clear opportunities to deepen those relationships as leases roll over," Gardner Ellner, EQT's managing director of investments at US Logistics, said in a statement.
"We look forward to actively managing the portfolio, which features assets that are best positioned to capture the broadest and highest growth segments of tenant demand in Southern California."
The tenants at the properties are involved in a range of industries including consumer electronics, food and beverage, consumer goods, chemicals and plastics, automotive, aerospace and defense, HVAC and building products, logistics, as well as apparel and fashion. The weighted average lease term at the buildings comes out to 2.7 years.
This marks another move in the industrial sector for EQT. In July, it acquired a 2.8 million square foot logistics portfolio in six high-growth national markets.
Some other major acquisitions in 2026 include teaming up with Americold Realty Trust on a $1.3 billion cold storage joint venture of at least 12 assets and a purchase of a 25-warehouse portfolio in March for $575 million.
Source: GlobeSt/ALM