National business park developer EastGroup Properties is eyeing a 160-acre site near Reunion for what could be the largest industrial distribution park in its Orlando portfolio.
EastGroup Vice President Chris Segrest told GrowthSpotter the REIT has a purchase contract on the site at Old Lake Wilson Road, about a mile north of the I-4 interchange with S.R. 429, and is planning to build 1.5 million square feet of Class A business distribution space.
EastGroup hopes to start construction during the first quarter of 2020. Segrest estimates the company’s total investment would come to $190 million.
A publicly traded REIT with $5 billion in assets under management, EastGroup currently has 4 million square feet in the Orlando market, including Southridge Commerce Park and Horizon Commerce Center.
“Obviously, we’re very excited about this next Orlando development for EastGroup,” Segrest said. “We’ve been over on the Beachline, and we have burned through our Horizon land really quickly. We continue to see that area growing so we started looking for sites around S.R. 429. We really like this site -- especially the proximity to I-4."
The property has been owned by GP Limited Partnership since 1991. The same entity is the owner/developer of the Xentury City development of regional impact in the tourism corridor, which is home to the Gaylord Palms Resort and Convention Center.
“This has never been at the forefront with us because we’ve been focused on Xentury City,” CFO Dimitri Toumazos said on Tuesday. “We always had the mindset to do a ground lease, but this year we decided to put it out on the market.”
CBRE’s Robert McEwan is the listing broker.
The property has Tourist Commercial future land use and an approved Planned Development zoning for hotels, timeshares, retail uses that had long since expired.
EastGroup applied last week to rezone the property to Employment Center, which allows business parks. Segrest said the EC zoning makes sense for the property because it’s adjacent to a former construction and development landfill, which makes it unsuitable for residential or resort uses.
GP Partners acquired the 40-acre landfill in 2008. Toumazos said the company worked with the Florida Department of Environmental Protection to close and cap the landfill and go through the required monitoring process. GP Partners would retain ownership of the former landfill and continue its stewardship of the property, he said.
A conceptual site plan prepared by Florida Engineering Group shows a layout of 12 flex warehouse buildings on the site. Segrest said the initial plan showed an entrance directly across from the Indian Ridge residential subdivision, but that it would be relocated to Sand Hill Road. The developer would use water features and landscaping to buffer the business park from the neighborhood across the street, and the larger warehouses would be set back from Old Lake Wilson Road.
EastGroup had previously scouted sites on Polk County’s U.S. 27 corridor, one of the region’s busiest distribution hubs. “We like this site better,” he said. “Our product type is a little different -- it’s not bulk distribution. We have a higher percentage of office use, and a lot of glass."
The company leases to a diverse customer base in Orlando that includes convention center users, major retail and e-commerce companies, pharmaceutical/health care groups, and residential construction companies.