Shortly after completing construction on two warehouse buildings totaling 262,000 square feet near the Orlando International Airport, Whitley Capital sold the 16.5-acre property for $30.1 million.
The land is located just south of the distribution center for Disney Cruise lines within the decades-old Lincoln International Corporate Park, near Tavistock Development Company’s 27,000-acre Sunbridge master-planned community established in 2016. There’s such high demand for industrial development in this market that an entity affiliated with national investment firm Oak Tree Capital has been under contract to snag property here along Transport Drive for more than a year, waiting for the new buildings to go up.
Once the county granted construction completion permits to Whitley Capital on Aug. 29, the deed changed hands a little more than a week later. Brokers Josh Lipoff and Joe Hills with JLL represented the seller in the transaction.
Stephen Whitley, principal of Whitley Capital, told GrowthSpotter that one of the warehouse buildings, totaling 143,000 square feet, is under lease by publicly-traded Escalade Inc., a national manufacturer and distributor of sporting goods. The company makes products for a number of leading brands such as Brunswick Billiards and Ping-Pong.
One of its brands, cornhole board manufacturer Victory Tailgate, is headquartered in Orlando on Transport Drive, according to the company’s website.
The company could not be reached for comment Tuesday.
Lipoff with JLL said Victory Tailgate had been using a number of smaller warehouses for its operations. The company will be able to consolidate its business under one larger roof with this new lease arrangement.
“They had three or four separate operations and it was just more effective to bring it all under one new facility,” Lipoff said.
The other warehouse building on the property that sold on Sept. 9 totals 119,000 square feet and does not yet have a tenant, Whitley said.
Industrial development activity in the Orlando market “shows no signs of slowing down,” according to an industrial market report by Colliers International published in early August that reflects the second quarter of 2022.
The report says that asking rates on newly delivered warehouse and distribution inventory continue to trend upward, averaging $8.90 per square foot. In comparison, big-box space of 300,000 sq. ft. and greater ranged from $5.75 - $7.00 per square foot.
The southeast quadrant of Orange County has the most warehouse inventory with 46.8 million square feet of space and a vacancy rate of 3.5 %. Another 1.2 million square feet worth of warehouse space was under construction in this segment during the second quarter, according to the report.
Across the entire Orlando area market, which includes Osceola, Lake and Seminole Counties, more than 10 million square feet of warehouse space was in some phase of construction in the second quarter as developers attempt to meet the growing demand for space, the report says.
The bulk of that activity is occurring in Northwest Orange County, the Apopka area. Throughout the summer, more than 4.8 million square feet of industrial buildings were under construction here, according to the report.
Significant lease activity in the second quarter includes Coca-Cola moving into 294,787 square feet at 2001 W. Oak Ridge in Southwest Orange County and motor vehicle manufacturing company KrammerAmerica moving into 246,460 square feet of warehouse space at 3040 Shelby Industrial Drive in Northwest Orange County.
Other significant activity includes Carrier’s move out of 130,000 square feet at Princeton Oaks 100, and into 173,000 square foot at 8050 Vista Reserve building 2000, marking the latter fully occupied. Frito Lay is expected to move into the vacated space at Princeton Oaks next quarter. Additionally, 650 Hermit Smith in Apopka is now fully occupied as the last two tenants moved into the remaining 118,000 s.f. this quarter.
However, a JLL industrial report notes that deliveries this quarter were relatively limited, with just under 400,000 square feet across six buildings completed. To date this year, about 1.6 million square feet have been delivered.
“Demand continues outpacing supply,” the JLL report says.
Whitley invested in the area east of the Orlando International Airport in 2020, spending about $1.3 million for a little more than 26 acres of land on the eastern end of Transport Drive, where companies include Special Logistics Southeast, Disney Cruise Lines and the Swedish multinational home appliance manufacturer, Electrolux.
In early 2021, he sold off a nearly 10-acre portion on the south end of the property to moving services company ACE Relocation Systems for $1.9 million. ACE Relocation worked with commercial developer Cadence Partners LLC to help develop a 120,000-square-foot office/warehouse for the company.
Whitley said the corporate park has been around for more than 40 years but is seeing a surge of new activity lately.
“This park sort of sat there for a long time but there’s been so much of a pick-up in activity both in terms of population growth in that area, but also demand for industrial space,” he said. “This particular site for years was considered too far out to attract much interest, but over the last several years that perception has definitely changed. Now areas like this that were once thought to be a little bit outside of the target area are very attractive to investors, but also to tenants.”
The proximity to the airport is a huge draw, too, he added. “The fact of the matter is, you can get off an airplane and be at this site in 15 or 20 minutes.”
Available land for industrial development around the airport is becoming more and more scarce, added Hills with LLC.
And that’s why organizations that are eager to bring distribution hubs to Orlando are jumping on the opportunity as quickly as they can.
“There’s not a lot left to develop in Orange County and South Orlando,” Hills said.
Editor’s note: An earlier version of the story stated that the property is within Tavistock Development Company’s 27,000-acre Sunbridge master-planned community. It is just outside that area.