- May 18, 2018
A Washington, D.C.-based development firm plans to acquire the largely vacant L3 Harris Technologies site in Sarasota this fall and remake the 46.5-acre property into a major distribution hub.
Galaxy Investments LLC and its affiliate, Cambridge Holdings, say the planned Sarasota 75 business park could contain as much as 800,000 square feet of additional distribution space in three to five buildings.
Galaxy plans to begin development at the 100 Cattlemen Road site later this year, with initial delivery slated for the end of 2020.
The companies also plan to raze a little less than half of the existing 182,000-square-foot L3 building, which is functionally obsolescent for distribution.
At least a portion of the estimated roughly $90 million project will be developed on a speculative basis.
“Florida as a whole is a market we really like, and Sarasota, in particular, because it’s such a growth market,” says Ben Eldridge Jr., a principal in both Galaxy and Cambridge.
“The location of this project is superb, and the acreage there allows us to do additional development that we believe is in demand,” Eldridge says. “Plus, we think the existing building there still has some life to it.”
Galaxy has retained Sarasota-based commercial real estate brokerage firm Ian Black Real Estate to lease the Sarasota75 project.
“We consider this to be ground zero for distribution in Sarasota, Manatee and Charlotte counties,” says Nick DeVito, an Ian Black partner, who will be leasing the space with the brokerage firm’s Joanna Ginder.
“My analysis shows that Sarasota 75 will be able to cover 90% of all retail sales activity within a four-hour drive,” says DeVito. “There’s nothing that’s ever been built like this in Sarasota County.”
Galaxy’s project comes amid a transformation in industrial real estate, spurred largely by retailers and e-commerce purveyors who are trying to shave customer fulfillment order times with so-called “last-mile distribution” centers.
As with many new distribution facilities, Sarasota 75 buildings will have clear ceiling heights of between 28 feet and 32 feet, an ample truck court of about 250 feet, parking for more than 1,000 vehicles and high-bay loading docks capable of speeding truck flow.
The new industrial space at Sarasota 75 will rent for roughly $8 per square foot, on a triple-net basis — meaning tenants also will cover costs such as utilities or taxes, DeVito says.
Eldridge adds Galaxy was drawn to Ian Black because of its long-standing place in Sarasota and its industry connections.
“They have a considerable knowledge base and we believe they’ll bring real value to the project,” he says of the firm. “And they have connections and have been around as a firm for a long time.”
Galaxy intends to close on its purchase of the property before the end of October, Eldridge says.
Since December 2015, the property has been owned by Cattlemen Road Partners, a Knoxville, Tenn.-based entity, according to Sarasota County and state records. Cattlemen Road Partners paid $4.95 million for the site, property records indicate.
Cattlemen Road Partners is being represented in the transaction by Brian Seidel of commercial real estate brokerage American Property Group of Sarasota Inc.
Eldridge declined to reveal Galaxy’s purchase price or the total value of Sarasota 75.
DeVito notes that in addition to the distribution space, the existing L3 Harris building will offer about 100,000 square feet of office and warehouse space for lease.
The building is largely vacant, save for tenant U.S. Health, whose lease expires in less than two years.
Sarasota 75 also will largely have the market to itself.
The only other significant new industrial project underway in either Sarasota or Manatee counties is from Benderson Development Co., in Ellenton, which will total more than one million square feet at completion.
In all, Galaxy has purchased or developed more than 5.4 million square feet and deployed in excess of $260 million in equity, according to its website.
Cambridge Holdings has developed more than 6.8 million square feet, from New Jersey to Florida, the website states.
“Our project is going to broaden distribution points out to both north and south,” Eldridge says. “The demand is there, and a lot of the existing inventory in and around Sarasota is considerably older.”