A Tampa-based financial advisor spent $1.4 million in late June on a triple net-leased auto dealership property in West Orlando to fulfill a 1031 exchange, and is pursuing more value-add parcels for another 1031 opportunity.
Located at 3490 W. Colonial Dr., the 3.11-acre property lies on the southeast corner with Ferguson Drive, and is home to the Orlando Kia West Pre-Owned Supercenter car dealership. It's amidst a stretch of auto dealerships just east of the Central Florida Fairgrounds.
Robert Tannenbaum, a vice president and senior financial advisor at Merrill Lynch, had a previous career as a chiropractor and owned multiple medical office strip centers in the Tampa area.
He sold those centers earlier this year, and began seeking value-add properties in Greater Orlando and other markets to help fulfill the 1031 exchange.
"This property caught my eye because it has a solid tenant there in Kia with roughly 10 years remaining on its lease, and I think that area has some possibility of being regentrified, so there's land value growth to be had," Tannenbaum said. "The area was downtrodden but people are interested in it again, other properties are being sold in the area."
Similar properties with stable single-tenant or national tenant leases in the Orlando area would interest Tannenbaum, who expects to invest further this year to fulfill another 1031 exchange.
The Kia property was previously bought in February 2006 by Infinity Property Management LLC for $3.2 million, which was represented in the recent sale by Dustin Bowersett, associate with Colliers International.
The site was formerly a Suzuki dealership that went out of business before 2006. Infinity bought it from Sun State Ford, leased it to used car dealerships for a few years, then in 2014 leased it to Greenway Ford's Orlando Kia for its pre-owned car sales.
The property was listed in December 2015 at $1.4 million, the price it would eventually sell at, but two contracts fell through before Tannenbaum because of concerns over the land's designation as a Florida Superfund site.
Back in the 1950s, these 3.11 acres and much of the surrounding property were a truck stop with fuel tanks buried underground, which eventually leaked petroleum. The site was placed on a state Superfund list decades ago, and has around 15 underground monitoring wells to this day removing trace petroleum from the soil, Bowersett said.
"So it was tough to find a buyer who would accept that risk of contaminated soil," he said. "There were also two underground storage tanks on this site that the buyer required we remove during the transaction."