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A group of 14 small-bay warehouses in Powerline Business Park in Deerfield Beach sold for $72.3 million.

Gateway Powerline BP LLC, care of San Francisco Stockbridge Capital Group and the Los Angeles County Employees Retirement Association, sold the combined 416,936 square feet of warehouses at 4100 N. Powerline Road and 1791 W. Sample Road to Redhawk FL LLC, care of New York-based Investcorp International Realty in partnership with Brennan Investment Group. Metlife Real Estate Lending provided the buyer with a $76.64 million mortgage, which also covered properties in other states. Property data firm Vizzda confirmed the buyer and seller information.

The price equated to $173 per square foot.

The deal was brokered by Cushman & Wakefield’s Jim Carpenter, Will Strong, Kirk Kuller, Michael Matchett, Molly Hunt, Mike Davis, Rick Brugge, Rick Colon, Dominic Montazemi, Jeff Chiate, Rick Ellison, Matthew Leupold, Robert Buckley, Tracey Cartledge, Scott Prosser, Steve Hermann and Jack Depuy. This team also brokered the sale of Montbello Industrial in Denver between the same parties.

It last traded for $62.25 million in 2019.

The industrial buildings were developed on the 26.4-acre site from 1983 to 1984. The site is just north of Sample Road.

 

Source: SFBJ

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South Florida’s industrial market ended the fourth quarter of last year with a seismic shift in ownership of 1.4 million square feet in Miami-Dade and Broward counties.

Boston-based Longpoint Partners acquired 25 industrial buildings in eight cities from Conshohocken, Pennsylvania-based Seagis. Longpoint’s $262 million portfolio purchase clocked in as the priciest industrial deal of 2023 — a sign that South Florida warehouses remain a top target for institutional investors.

Industrial properties arguably represent a safe bet, given historically low single-digit vacancy rates and a continuing trend of rising asking rents, according to a recent CBRE report.

The tri-county region experienced a slight uptick in empty warehouse spaces in the fourth quarter, even though tenant demand remains high — except in Broward. Still, industrial landlords kept increasing asking rents, the report shows.

Miami-Dade County

In the fourth quarter, the vacancy rate rose to 3.2 percent, compared to 2.6 percent during the same period of 2022, CBRE found. The average asking rent rose to $15.50 a square foot from $15.05 a square foot in the third quarter. It also increased by nearly 16 percent compared to $13.37 a square foot during the fourth quarter of 2022.

Miami-Dade’s slight increase in vacancies was due to nearly 5.4 million square feet of new industrial space becoming available last year, the report states. About 80 percent has been leased to date.

San Francisco-based Prologis scored one of the biggest industrial lease signings of the fourth quarter. Packing and shipping firm Ameriworld Fulfillment signed a new 10-year lease valued at $25.2 million for 124,000 square feet in an industrial complex near Miami International Airport owned by Prologis.

Broward County

The vacancy rate in Broward remained relatively unchanged, hitting 3.5 percent in the fourth quarter, compared to 3.7 percent during the same period of 2022, CBRE found. The average asking rent jumped by 20 cents to $15.65 a square foot, compared to $15.45 a square foot during the third quarter of last year. It also increased by roughly 11 percent compared to $14.14 a square foot during the fourth quarter of 2022.

During the second half of last year, tenant demand was relatively weak in Broward, but the county has a limited supply of industrial space, which led to the average asking rent increasing, the report states.

In October, All Glass Production signed the second biggest industrial lease of 2023. The glass manufacturing company leased a nearly 250,000-square-foot warehouse at South Florida Logistics Center in Pembroke Pines. The property is owned by Denver-based Sagard Real Estate.

Palm Beach County

Palm Beach County experienced the largest increase in available space, with the vacancy rate hitting 4.2 percent in the fourth quarter, compared to 2.3 percent during the same period of 2022, the CBRE report shows.

The average asking rent rose by 25 cents to $15.75 a square foot, compared to $15.50 a square foot in the third quarter. It also increased by 7.5 percent compared to $14.65 a square foot during the fourth quarter of 2022.

Palm Beach County’s industrial sector experienced a gradual slowdown last year, with vacancies rising during four consecutive quarters, CBRE found.

Bush Brothers Provision Company, a meat packing and distribution company, signed a lease to move its headquarters into a 42,100-square-foot space at Royal Palm Logistics Center, a new industrial project in Royal Palm Beach developed by Orlando-based McCraney Property Company.

 

Source: The Real Deal

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The City of Riviera Beach is looking to redevelop three sites totaling approximately 80 acres across Riviera Beach.

The City intends to optimize existing City owned parcels and replace aging structures by developing a mix of residential, commercial, and retail space.

A developer and local participant workshop will be held on Jan. 24 from 2 to 4 p.m. at the Marina Event Center located at 190 E 13th St. in Riviera Beach.

The three primary sites include approximately 41 acres at 600 and 601 Blue Heron Blvd., approximately 2 acres at 2250 Broadway, and approximately 38 acres on Palm Beach County School Board property bordered by 34th St. to the North, W. 28th St. to the South, and Avenues H and J to the East and West.

The re-imagining of Rivera Beach will include a mix of civic, government, sports, and commercial mix of uses, including but not limited to: Municipal complex, new City Hall, public library, train stop /station, world class recreation center, mixed income multifamily, retail, and green and open space.

“We stand on the precipice of a transformative moment in the history of Riviera Beach,” said Jonathan Evans, City Manager for the City of Riviera Beach. “The redevelopment of our city hall and its surrounding properties is the cornerstone of the ‘Reimagine Riviera Beach’ initiative—a vision dedicated to revitalizing our city and reinforcing pride within our community. We invite partners who appreciate the City’s rich heritage to join us in reshaping Riviera Beach for generations to come.”

The City of Riviera Beach will release an Invitation to Negotiate at the end of January, which will outline specific goals related to the re-imagining of Riviera Beach.

CBRE local expert Clarissa Willis along with Lee Ann Korst, Kevin McShea, and Tess Fleming of CBRE’s Public Institutions and Education Solutions (PIES) will represent the City to solicit, negotiate and engage a developer. CBRE’s PIES Group provides real estate services to state, county, city, and educational institutions around the country.

“The scarcity of large acreage tracts of land in South Florida, coupled with Florida’s business friendly environment and in-migration, makes this project both a unique and highly opportunistic redevelopment,” said Ms. Korst, Southeast Regional Manager of CBRE’s Public Institutions and Education Solutions. “It is the development community’s opportunity to capitalize on current activity and transform Riviera Beach.”

 

Source: CRE-sources

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South Florida’s industrial sector has retreated from roaring pandemic-era activity, but a burst of year-end transactions signal that investors continue to see opportunities in the region.

Buyers spent $215M across three transactions in Miami during the last two weeks of 2023, capping off a fourth quarter that also saw the year’s largest portfolio deal. The flurry of sales came as rents continued to tick upward despite a wave of new deliveries and a steep decline in annual leasing activity.

The market is returning to a pre-pandemic pace of activity, brokers say, but tight supply dynamics still favor landlords as migration trends continue to boost demand.

“We were kind of on a sugar high with the amount of activity that was going on” in 2021 and 2022, said Christopher Thomson, vice chair at Cushman & Wakefield. “It was almost double what normal activity is, but what I am seeing today is a consistent market of tenants that are looking at spaces.”

Miami-Dade County closed 2023 with 7.8M SF of annual leasing activity, a 21.6% decline from the prior year, according to preliminary data from Cushman & Wakefield. As leasing slowed, the region also saw 3M SF of new inventory come online and a further 7M SF under construction.

Rental rates continued their upward climb in Q4 despite the influx of new supply, albeit at a much slower rate than the double-digit increases seen in the prior two years. Average rents in Miami rose 3.8% year-over-year to $15.68 per SF, as vacancy climbed modestly by 0.8% but remained tight at 2.4%.

Iberia Foods recently signed a 398K SF lease at an under construction warehouse at Bridge Point Commerce Center (PHOTO: Google Maps)

One of the largest new leases of the year came in the last weeks of 2023 with Iberia Foods inking a 398K SF deal at Bridge Point Commerce Center in Miami Gardens, according to CoStar. The seller and distributor of Caribbean and Latino cuisine will move into an 800K SF building at the business park, one of two warehouses under construction at the Bridge Industrial development that are expected to deliver soon.

Iberia Foods’ large lease runs counter to the trend in South Florida. New deals between 20K and 50K SF accounted for 36% of leasing activity through Q3, and the number of deals above 100K SF slipped by 71.5%, according to Avison Young.

“We saw a softness in the market on the tenants above 100K SF having real trouble making decisions,” Thomson said. “It was less to do with the microeconomics down here in South Florida and more to do with the macroeconomics of the U.S. Those dynamics are beginning to shift as the prevailing consensus that interest rates have peaked is making tenants more willing to move ahead with large investments.”

Thomson added that his team was working on several larger-footprint deals that he expected to close in the first quarter.

The expectation that a backlog of demand and a runway for growth persists in Miami was reflected in a spate of year-end acquisitions. The largest of the deals to close in the last two weeks of December was the $174M sale of a Hialeah industrial park. Codina Partners sold three parcels in Beacon Logistics Park to an affiliate of Property Reserve, the investment arm of the Church of Jesus Christ of Latter-day SaintsSouth Florida Business Journal reported.

Codina broke ground on the warehouse park in 2018 and has completed two buildings on the property’s 63 acres, with another two under construction. Another pair of buildings are permitted for development but haven’t broken ground. The property has approvals for up to 1.5M SF of space.

New Jersey-based industrial investment firm Faropoint acquired another industrial portfolio at the close of the year, spending $25M on three warehouses totaling 142K SF at 12900 NW 38th Ave. in Opa-Locka, The Real Deal reported. The seller, California-based industrial investor The O’Donnell Group, paid $17M a year earlier to acquire the properties.

On the single-tenant side, The Easton Group paid $17M for a 45K SF warehouse in Medley in a deal that closed Dec. 20. The seller was the snack company Frito-Lay, a subsidiary of PepsiCo, which will be relocating to 131K SF at Bridge Point Doral in what was the largest new lease of Q3.

Doral-based Easton was one of several bidders on the property, said Dalton Easton, an associate at the firm’s brokerage arm, Easton & Associates, who arranged the sale. Easton secured $9M in financing for the deal from Grove Bank and Trust in just three weeks, despite not having a new tenant in place and what Easton described as a challenging lending environment.

“Miami’s bread and butter tenant size is 50K SF and lower,” Easton said. “You’re seeing more normalized demand, you’re not seeing 15 or 20 users looking for half a million SF, you’re looking at the usual 50K SF and smaller.”

As part of a 25-building portfolio that sold for $260M, Longpoint Partners acquired the buildings at 2100 and 2190 SW 71st Terrace in Davie (Courtesy of Images For Business)

The deals followed a 25-building transaction earlier in the month in which Longpoint Partners paid $260M to acquire a 1.4M SF portfolio from Pennsylvania-based Seagis Property GroupCommercial Observer reported.

After acquiring the portfolio, which spans Miami-Dade and Broward Counties and is 97% leased to 77 tenants, the Boston-based private equity firm secured a $94M construction loan covering nine of the properties, South Florida Business Journal reported. The loan came from Athene Annuity and Life Co., a subsidiary of Apollo Global Management.

The performance of the industrial sector in Broward County in 2023 mirrored, and in some respects outperformed, its neighbor to the south.

The county saw 2.8M SF of leasing activity through the year, a 43% dip from 2022 levels, according to Cushman & Wakefield’s preliminary data. But a significantly smaller number of deliveries, which totaled 693K SF with 618K SF currently under construction, helped push vacancy down half a percentage point year-over-year to 2.7%.

“The tight market helped Broward County maintain double-digit annual rent growth, with average rents rising 12.1% year-over-year to $15.37 per SF,” Thomson said. “But the pace of rate increases is expected to slow in 2024 as the market returns to a level of leasing activity more in line with pre-pandemic levels. If you look at the rental rates in comparison to where they were in 2019, there has been such a run-up that I think we’re just going to really see them go back to a natural 4% increase going forward. When you talk to people that are looking at projects to purchase, they’re not budgeting 10% to 20% rental increases.”

Rockpoint paid $180M for 88 acres in Pompano Beach where it’s planning to build 1.5M SF of industrial space (PHOTO CREDIT: Rockpoint)

The dynamics are fueling some speculative development, with Rockpoint paying $180M in November for an 88-acre development site in Pompano Beach. The Boston-based private equity firm is planning to build around 1.5M SF of industrial space at the site, with the first phase slated to break ground in May.

“We are excited about this opportunity given the attractiveness of our basis combined with significant rent growth that Broward County is experiencing,” Tom Gilbane, managing member at Rockpoint, said in a statement following the acquisition.

The burst of activity in Q4 is likely to carry into this year, industrial brokers said, with any interest rate cuts at the Federal Reserve unlocking capital for acquisitions in the supply-constrained South Florida markets, which CoStar predicts will be among the top U.S. regions for rent growth over the next four years.

“If the Fed starts cutting rates, the cost of capital will follow and it’ll create a surge of activity,” Easton said. “From an acquisition standpoint, across the board, there has been capital on the sidelines waiting to be deployed down here for a long time.”

 

Source: Bisnow

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Industrial, with multifamily one of the two investment darlings of the pandemic and after, did relatively well in November.

But not well enough as it still took a big hit according to MSCI’s November 2023 report on the sector. It took a 64% year-over-year drop.

“Deal volume through November puts the sector behind apartments as the second most traded sector for the year,” they wrote. “Deal volume still fell in November even with these positive elements supporting the sector. Macro forces have simply made it difficult for investors to underwrite investments.”

Individual asset sales took the biggest hit, down 69%, a change from early in the year.

“The pace of sales for individual assets had fallen at a 53% YOY rate in April and had generally improved in subsequent months,” MSCI wrote. “It is unclear at this point if the 69% decline is simply a number that will be revised up in coming months as smaller deals are found or a sign of a new sense of hesitancy.”

Flex saw a drop of 76%; warehouse was down 61%. The smallest drop was in portfolio and entity, at 36%. Things look better on a year-to-date year-over-year basis. Total industrial was off by 49%. Flex was down 63%, warehouse dropped by 46%, single access fell 41%, and portfolio and entity dropped 64%.

There were no “entity-level deals” during November. That wasn’t an additional loss compared to 2022 as there were also none last November. But had there been, the month might ultimately have looked different with a large boost to the total. Overall, these big-level deals have undergone a major shift. In 2022, they represented 16% of the entire total industrial investment. This year, the cut is 3%.

Even if things had been better in November, with declines that were no worse than October, the chances of 2023 matching 2022 would still have been slim.

“To match the $160b of industrial property sales seen last year, sales in December of this year would need to total $84b,” wrote MSCI. “The single strongest December ever was in 2021 when $37.1b sold.”

More than doubling a previous record, given the current pace, seems unlikely. On the positive side, industrial property prices have done better than other sectors.

“The RCA CPPI National All-Property Index fell 8.0% YOY in November but the industrial index climbed 1.8%. Industrial investors were losing ground relative to inflation at this pace, but a gain is a gain and this pace was the strongest across all property sectors.”

 

Source: GlobeSt