A Fort Lauderdale-based family's holding company closed their 1031 exchange within the past week by spending $3.64 million on a Shader Road warehouse property, landing a 7.25-cap return with a triple net credit tenant, and has millions more to invest in Orlando, a director with the company told GrowthSpotter.
Langer Holdings is an investment company for the family of Roger Langer, owner of the Langer Electric Service Co. in South Florida. The holding company is directed by son Rodney C. Langer, a veteran investment sales broker who was hired in July by Orlando's Crossman & Company to open a Miami office, and lead an expansion of Crossman's investment sales in Southeast Florida.
The Langer family sold a large piece of vacant industrial property in recent months in Medley, Fla., and Rodney scoured the state for the ideal property in which to reinvest their return.
"I must have looked at 200 properties across the state, settled on 20 of real interest, analyzed a dozen and this one in Orlando was the best by far in terms of quality of tenant and return on investment," Langer said. "We're very fortunate to find this deal, a 7.25-cap return on an absolute triple net credit tenant, almost unheard of."
Located at 3018 Shader Road, the seven-acre property has 48,000 square feet of warehouse space leased long-term by L&W Supply, one of the largest suppliers to home-building companies in the country.
"That area of Shader Road is a nicer industrial area in Orlando as well, with high-profile distribution plants there by Coca-Cola, Winn-Dixie and others," Langer said.
He sees the Greater Orlando area as currently offering the best possible return on investment type, with a focus by Langer Holdings on industrial and retail properties that are improved, with quality tenants.
A similar property in Miami-Dade County to the one Langer Holdings just bought in Orlando would have offered a capitalization rate of six, Langer estimates.
The Orlando market has drawn renewed interest over the past year from institutional investors, but Langer believes while interest rates may steadily rise that will keep upward pressure on cap rates, which should limit growing interest in Orlando from pushing down cap rates.
"We like Orlando, and are actively seeking more investments there. Even though our 1031 window has passed, we still have several million on the sidelines, waiting for the right deal to come along next," Langer said.