Veriton Investment

Activist Elliott Is Said to Take Large Stake in Rexford REIT

(Bloomberg) -- Elliott Investment Management has built an active stake in Los Angeles-based real estate investment trust Rexford Industrial Realty Inc., according to people familiar with the matter.

It makes the hedge fund one of the top five investors the industrial real estate company, the people said, asking not to be identified because the matter is private. Elliott’s intentions couldn’t be immediately learned.

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A representative for Rexford didn’t immediately respond to a request for comment. A spokesperson for Elliott declined to comment.

Shares of Rexford, which rose as much as 6.6% on Wednesday, closed up 4.4% to $41.78 in New York, giving the company a market value of $9.9 billion. Including debt, Rexford has an enterprise value of about $13.3 billion. The company’s shares had fallen about 23% in the past year through Tuesday, compared with a 2.4% decrease in the US REITs index during that period.

Rexford has long been speculated as an acquisition target, according to analysts. A Deutsche Bank report in January said it wouldn’t be surprised to see a bid for its portfolio, giving that the Southern California market is attractive longer-term and several private and public players would like to increase their exposure.

Rexford is focused exclusively on investing in industrial property in Southern California, according to its website. Measured by square feet, that region’s industrial market would be the fourth-largest globally, behind only the US as a whole, China and Japan. It’s also close to two major ports, making it a hub for the flow of goods.

Jonathan Litt’s Land & Buildings Investment Management, an activist in REITs, disclosed a passive stake in Rexford earlier this month.

While Elliott is known for pushing for changes at public companies around the world, it’s also a direct investor in real estate equity and high-yield debt. It was part of a deal to take Vancouver-based City Office REIT Inc. private this year. It also bought debt in a San Francisco office tower, according to local reports.

Bloomberg News reported in July that Elliott, one of Equinix Inc.’s 10 biggest shareholders, is pushing the data-center REIT to take steps to boost its share price.

Telecommunications company Crown Castle Inc., also a REIT, launched a review of its fiber business in 2023 as part of an agreement with Elliott, which also won seats on the Houston-based real estate investment trust’s board.

Elliott’s previous REIT investments gave included Healthcare Trust of America Inc., which was sold to Healthcare Realty Trust Inc. in 2022, and Switch Inc., which was taken private by DigitalBridge Group Inc. and IFM Investors for $11 billion later that year.

Rexford went public in 2013 and has been adding to its warehouse portfolio through acquisitions, including a $1 billion acquisition from Blackstone Real Estate in 2024. It’s run by co-Chief Executive Officers Howard Schwimmer and Michael Frankel.

Smaller competitor Plymouth Industrial REIT Inc. received an unsolicited takeover offer from Sixth Street earlier this year.

(Updates with closing share price in fourth paragraph. The spelling of Deutsche Bank and Rexford’s share price change were corrected in an earlier version of this story.)