Two Class A warehouse properties directly west of Orlando International Airport sold for an estimated $9.86 million combined, or roughly $77 per square foot, to a Boston-area investment group on Friday, the latest example of Orlando's industrial market drawing national interest, local brokers tell GrowthSpotter.
Known as Southport Center and Palmbay Center, the two neighboring properties that sold are located near the corner of Palmbay and Southport drives in Liberty Park at AIPO, an industrial business park adjacent to OIA. Liberty Park boasts companies like Budweiser, FedEx and Chrysler among companies with major facilities in the park.
Palmbay Center, a distribution warehouse built in 2003 with 53,448 square feet under roof, has a charter aircraft rental and leasing firm 24-7 Specials listed as a current tenant, via commercial real estate websites.
Southport Center, also a distribution warehouse that was built in 2007 with 74,214 square feet under roof, has among its listed tenants UK Imports and medical supplier Customed USA.
The buyer of both is Southport Palmbay Investors, a Florida LP created May 13 and affiliated with High Street Realty Company out of Boston, Mass. HSRC, a private equity real estate investment and management company that invests in warehouse and distribution properties in major markets across the eastern U.S., did not return calls for comment on Monday.
Orlando has had little new industrial warehouse space built over the past five years, and existing facilities available for purchase are being leased up to create value, or sold at steadily rising prices, said George Livingston, chairman of NAI Realvest in Orlando.
"Orlando is a secondary market, and national (investor) interest is now flowing to the secondary markets from primary markets, which means there is value to be had here with higher return," he said. "This is an indicator of a trend with out-of-town buyers coming into this market and buying properties for a position they'll probably hold for three to seven years.
"All the development around the airport and expansion planned there for more international flights will only make properties in this area more competitive," Livingston said.
With a combined 127,662 square feet under roof, the buyer paid roughly $77 per square foot, or $9.86 million overall, a calculation based on the doc deed tax from Orange County records. The two properties had a combined assessed value of $3.88 million in 2014 from the Orange County Property Appraiser.
That price per square foot could be seen as high for a user-owner but may still be attractive for an investor seeing demand for long-term tenants in Orlando, said Jay Rohr, founder of MetroOne Inc., a local consultant for the industrial real estate market.