Industrial project's appreciation since 2015 shows sector's resilience and value
Buoyed by a strategic infill location and close proximity to both a heavy population cluster and highway networks, the rise of e-commerce logistics and so-called “last mile” delivery and a recognition that industrial properties are today a vital part of a company’s overall supply chain, the value of the six-building Tampa Distribution Center has climbed 60% in the past four years.
Earlier this month, Link Industrial Properties — New York-based Blackstone Group’s U.S. industrial real estate arm — bought the 955,000-square-foot project for $69.25 million.
When seller High Street Realty Co., of Boston, and partner Grosvenor Fund Management Inc. purchased the same 1212 N. 50th St. project in August 2015, it traded for $43.4 million.
The jump in value stems in part from Tampa Distribution Center’s location, which is within a 45 minute drive to 2.7 million residents, and within close proximity to the Leroy Selmon Expressway, Interstate 4 and Interstate 75, Tampa International Airport and the Port of Tampa.
The property also is just four miles from downtown Tampa and adjacent to United Parcel Service’s main Tampa distribution hub.
“It’s strategically located near several major roadways, so it works well for a lot of distributors,” says Rick Brugge, an executive managing director at commercial real estate brokerage firm Cushman & Wakefied, who together with Vice Chairman Mike Davis and Director Rick Colon represented High Street and Grosvenor in the transaction.
“The location continues to be relevant.”
Brugge notes, as well, that occupancy gains — from 85% when High Street and Grosvenor bought the project to 95% today — also fueled the price increase, along with a general desire among investors to buy industrial space.
“There were improvements along the way in rental and occupancy rates, which helped, and the financial profile of the region has improved since Tampa Distribution Center last sold,” Brugge says. “And industrial is an in-demand property now more than ever before because of structural changes in the economy and how it fits in to the overall supply chain.”
The 46-year-old project, on 51 acres, is occupied primarily by Lansing Building Products, Consolidated Container Co., Feeding America Tampa Bay and others.
In the wake of the transaction, Link Industrial has awarded leasing responsibility to Tampa Distribution Center to Cushman & Wakefield Managing Director Julia Silva and Senior Associate Jessica Mizrahi.
The purchase comes as Blackstone appears to be doubling down on buying industrial assets nationwide and along the Gulf Coast.
Last month, the company executed a record $18.7 billion deal to buy a portion of Singapore-based GLP’s U.S. distribution and logistics-related assets, totaling 179 million square feet.
Along the Gulf Coast, GLP owned two dozen buildings prior to the sale, in Tampa and around Tampa International Airport and Lakeland.
Over the past decade, Blackstone has added more than 930 million square feet to its overall commercial real estate portfolio, according to statistics compiled by real estate researcher CoStar Group.