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Tampa Bay Area
Business Observer Friday, Aug. 26, 2016 2 years ago

A moving tale

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During a two-year search, Coast to Coast Moving & Storage had three deals fall apart before finding the right fit for its headquarters.
by: Kevin McQuaid Commercial Real Estate Editor

It seemed like a pretty straightforward deal at the outset.

After years of renting space in Tampa and steady growth, Coast to Coast Moving & Storage decided in 2014 that it wanted to buy its own building — something that would meet its current needs and provide enough room to grow in the future.

The Wheaton Interstate Moving affiliate wanted at least 30,000 square feet, and land enough to park at least 50 tractor-trailers and other moving trucks.

As a frequent vendor of the U.S. military, there were government criteria that would need to be met, too: Coast to Coast couldn't be located in a flood zone, it needed a building with sprinklers or other approved fire-suppression methods, and the neighbors had to pass muster, too, among other things.

Coast to Coast CEO George Burd had stipulations of his own.

The most critical was that any new location would need to have a 22-foot clear height ceiling or greater, so the company could stack boxes and furniture higher. That, in turn, would allow it to handle more business.

“We knew that if we could get the size and dimensions we wanted, it would open up a lot of new opportunities for us and our customers,” Burd says.

The trouble was, the more that he and commercial real estate agent Bobby Sampson looked, the less they found.

Burd contracted to buy one seemingly solid prospect, only to find out while visiting during a thunderstorm that similar amounts of rain were falling inside as outside.

A second building owner was asking $2.5 million. When Sampson, an associate with the Tampa office of commercial real estate brokerage Newmark Grubb Knight Frank, countered with $2.35 million, the owner initially agreed — and then never followed up.

“We found out there just aren't that many buildings available that fit the size they needed and had the ability to park multiple trucks at one time,” says Sampson.

“Buildings like that don't come along very often, and when they do, they're not on the market very long.”

While ground-up, big-box distribution and fulfillment center projects for Wal-Mart Stores, Amazon.com, Southern Wine & Spirits, Rooms To Go, Fedex and others in the Interstate 4 corridor have understandably garnered the lion's share of attention in industrial real estate circles in recent years, less effort has been paid to smaller companies like Coast to Coast.

At least part of that attention stems from sheer size: At 1 million square feet, for instance, Amazon sends its landlord a hefty rent check every month -- far more than a Coast to Coast could ever think to, by comparison.

New regional product, too, tends to favor macro-trends toward e-commerce and just-in-time fulfillment, and to being able to reach a maximum number of people in a minimal period of shipping time.

Frustrated after more than a year of searching, Burd and Sampson began discussing the pros and cons of constructing a new building.

But ground-up development, they soon determined, just didn't pencil out: It was way too expensive for the company.

Driving around Southeast Tampa one afternoon, Sampson and Burd pulled into a complex where Tampa Cold Storage had operated years earlier. Officially, the vacant four-building complex wasn't even on the market.

Keating Resources, of Geneva, Ill., had purchased the set last December, with an eye toward rehabilitating and repositioning it.

“We like to invest in things that are broken, and we fix them up,” says Keating Resources President and CEO Gerard Keating.

Coast to Coast was initially drawn to a 55,000-square-foot building Keating owned in the complex, but it lacked a good sprinkler system.

Sampson wondered about another of the four buildings, one slightly larger, at 63,737 square feet.

It was surrounded by six paved acres, enough to accommodate Coast to Coast's truck parking requirements. It was a stand-alone building, too, which would make the government happy.

But it needed a lot of work.

Because the 5035 Uceta Drive property had been used for cold storage, it contained old refrigeration equipment powered by ammonia and piping insulated with cancer-causing asbestos. Both would have to be ripped out.

Keating agreed to install a new roof and sprinkler system as well, and put a fence up to segregate the building and enhance security. In all, the company invested $600,000 into the
building, on top of the $900,000 it spent to buy it.

On May 24, Coast to Coast bought the rehabbed building for $2.87 million.

Keating hopes to have the balance of the complex occupied or sold by the end of the year. He believes the trend lines are in his favor.

“As people move back to urban America, there's a severe shortage of quality, well-located distribution space to serve them,” he says. “Our projects meet that demand.”

Coast to Coast moved out of its former space and into 5035 Uceta two weeks ago.

“With real estate, nothing seems to ever go the way you think it's going to, but in this case, it all worked out and I think everyone is happy with the transaction,” Sampson says.
Burd agrees.

“We couldn't ask for a better building. It's everything we needed.”

Still, settling in has been a work in progress. Offices still aren't finished; Coast to Coast's employees have been working on folding tables in the company's new warehouse.

But that pales in comparison to the issues the company has been having with Frontier Communications, the beleaguered cable TV, phone and internet provider that took over Verizon's Florida business earlier this year.

Burd says his fax line, a lifeblood of the company's ordering system, has been down for three weeks. So has his internet connection.

Frontier can't say when, or if, it will be able to get that working. Coast to Coast has been using hotspots and Wi-Fi cards to get by, but neither are adequate, Burd says.

“I'm looking forward to getting everything settled and focusing on what we do best — helping people move,” Burd says.

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