MDH Partners buys six Orlando warehouse bldgs, seller to reinvest locally

UPDATED: JANUARY 25, 2017 3:45 PM — Atlanta-based industrial real estate investor MDH Partners closed last week on a warehouse portfolio buy spanning three regions of Florida, which included more than $71.3 million spent on nearly 1.14 million square feet of conditioned area in Orlando.

The portfolio encompassed 27 buildings in Jacksonville, Greater Orlando and Miami totaling approximately 4.3 million square feet.


"The Orlando market continues to be one that we're very bullish on, and we look forward to continuing to expand our presence there," CEO Jeff Small told GrowthSpotter on Wednesday. "We think the continuing e-commerce growth in Orlando is really benefiting your market."

Learn what drew the investor to its seventh industrial asset in Orlando, what leasing challenge lies ahead, and where they stand on a Davenport spec-build.

The six newly-acquired Orlando buildings occupy more than 66 acres. Sales were closed on Jan. 12 and Jan. 17, and recorded Wednesday morning in Orange County.

Four of the six warehouses are on Tradeport Drive in the Airport Industrial Park, where MDH already owns one warehouse bought in August 2016. The fifth is on Directors Row in Orlando Central Park, and the sixth on Vineland Road in the Thirty Third Street Industrial Park.

A seventh local warehouse of 150,000 square feet in Kissimmee at 711 Hoagland Road was also acquired last week, though a sales deed has yet to be recorded. Altogether, the acquisitions bring MDH's asset count to 14 warehouses in Greater Orlando.

The six Orlando properties were about 75 percent leased at time of sale, offering a value-add factor that appealed to MDH, Small said.

Project is the latest in a series of major distribution centers planned for the major interchange near the Four Corners area.

JLL will manage the properties, as it does for MDH's assets nationwide. The company has yet to choose a real estate broker to serve as leasing agent on the Orlando buildings, Small said.

The deal was brought to MDH last year by Chris Riley, vice chairman of institutional properties with CBRE Atlanta, who was listing the portfolio on behalf of seller Webb International of Orlando, represented on deeds by City National Bank of Florida, and Industrial Park Development Corp. in Orlando.

David Murphy, senior vice president at CBRE Orlando, represented Webb's properties in Orlando.

"This was a situation where we felt we were at historically low Cap rates with the potential for increasing interest rates. And when we started on this (prior to the 2016 presidential election), we felt like there was substantial risk to corporate gains taxes," president Dan Webb told GrowthSpotter. "So it was a good time to capitalize."

Webb plans to reinvest a portion of his sale proceeds in new development around Orlando, starting with a 44,800-square-foot high-density office building under construction in Lake Mary, at 680 Century Point. That new building should be completed in February, he said.

He also plans to purchase some property near the airport from an affiliate LLC, in order to control it and develop a 175,000-square-foot warehouse. That could be build-to-suit or speculative, Webb said.

Industrial real estate group sees Greater Orlando area as new focal point for growth and investment, CEO says.

No mortgage was recorded in Orange County as of Wednesday morning in relation to the purchases, but Small said a loan was acquired via Bank of America, Wells Fargo and Synovus.

In addition to the assets bought this month, MDH has recently started construction on a third speculative warehouse building of 300,000 square feet at its Four Corners Business Park property in Davenport.

MDH entered the Orlando industrial market in September 2015 with three assets in the Richmond Heights neighborhood. Later that month it bought 52 acres at the I-4/U.S. 27 interchange in Davenport, a few miles southwest of ChampionsGate, where it is now constructing its third speculative warehouse.


The Four Corners Business Park will total 795,753 square feet once complete. Pre-leasing activity on the third building is "going well," Small said.

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