SARASOTA — Agellan Commercial Real Estate Investment Trust, a Toronto-based firm that owns some three-dozen properties throughout North America, has acquired one of Sarasota County's largest industrial properties.
The REIT's $52.5 million deal for the Meridian Distribution Center, at Clark and McIntosh roads, marks its second purchase in Florida. Agellan also owns an industrial property in Tampa.
“We liked the price and where property is,” says Frank Camenzuli, Agellan's CEO, in an interview with the Business Observer. “We very much appreciate the value of refrigerated warehouses, and this asset has a little bit of land attached so at some point we may build something there. For now, our goal is to maintain it and keep the tenants happy.”
Agellan received roughly nine acres of undeveloped land adjacent to the distribution center in the purchase.
The former Winn-Dixie distribution center has been owned since 2006 by Tampa-based Meridian Development Co., which bought it for $30 million. Meridian acquired the building in the wake of Winn-Dixie's vacancy, and within two years had leased more than three-quarters of the building, while investing $11 million to retrofit the property.
Meridian managing partner Steven Kossoff says the investment in the property has paid off. “Our investment strategy is typically to hold an asset for three to five years, but when we leased and stabilized this property it was during the recession, so we had to wait for the market to come around,” says Kossoff. “We're very happy with how this turned out.”
Today, the 907,237-square-foot property is currently occupied by Bealls, Albert's Organics, MyUS.com and others. In all, more than 600 people work at Meridian Distribution Center. Meridian also constructed a three-building, 135,000-square-foot office park on the 60-acre property during its ownership, which included a building for Imagine Schools at Palmer Ranch.
Agellan's Tuesday purchase, at a going-in cap rate of 8.1%, included the assumption of $33.3 million in debt on the property, the REIT says in a statement.
In all, Agellan owns 36 properties in Canada and the U.S. totaling more than six million square feet of space. In the U.S., its portfolio is concentrated in Texas, Illinois and Georgia, according to its website.
Meridian will continue to manage the property for Agellan.
Kossoff, meanwhile, says his firm will focus on recent acquisitions in Brandon, Raleigh, N.C., and elsewhere.