A 231,769-square-foot flex office campus within Chatsworth Business Park has sold to Rexford Industrial Realty for $42 million, or $106 per land square foot.
The two-building low-rise campus — located at 21415- 21615 Plummer St. in Chatsworth — sits on 9.1 acres of industrial-zoned land.
The buildings are 85 percent leased to two tenants, including the County of Los Angeles, which has been at the property since 2000. Upon lease expirations, Rexford intends to redevelop the site by razing the existing structures and constructing two 32-foot-clear warehouse buildings that will total 182,000 square feet.
Mark Shaffer, Mike Longo, Anthony DeLorenzo, Todd Tydlaska, Sean Sullivan, Matt Heyn and Bennett Robinson of CBRE Group represented the seller, a national real estate investment and management company, in the off-market transaction.
“Strong demand for Class A industrial space is creating a unique opportunity to redevelop low-rise office-to-industrial infill locations,” said Shaffer in a statement.
Added Longo: “The strong in-place income from the existing office tenants and the ability to repurpose the site to industrial should the office tenants leave, offered a compelling opportunity for Rexford to expand their presence in the San Fernando Valley.”
Rexford Industrial Realty has been actively buying up North Los Angeles properties. In February, Rexford acquired a Santa Clarita warehouse as part of a five-piece portfolio it obtained for $170 million. In December 2020, as part of a two-property transaction, Rexford purchased a Sylmar property at 13943-13955 Balboa Blvd. for $42.6 million. In 2019, Rexford bought the San Fernando Business Center for $118 million, or about $200 a square foot. That purchase, which consisted of three single-tenant industrial buildings, totaled 591,660 square feet.
According to CBRE research, demand for infill warehouse distribution space combined with the accelerated rent growth for Class A warehouse distribution space has created an opportunity for investors to redevelop surface-parked suburban office buildings into prime industrial locations.