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McDonald Sells GA Industrial Portfolio for Nearly $400M

Five months after its acquisition with a major industrial REIT, Ares Management Corp. has shelled out hundreds of millions of dollars for part of McDonald Development’s Southeast industrial portfolio.
McDonald sold 14 buildings across five industrial parks it developed for $395.5M, Cushman & Wakefield announced Tuesday. C&W Vice Chairman Stewart Calhoun and Senior Director Casey Masters brokered the sale for McDonald.
Sources familiar with the transaction told Bisnow a fund managed by Ares, which acquired Black Creek
Group’s U.S. business, including its $11.6B in assets, in July, was the buyer of the 2.7M SF portfolio.
Roughly 1.8M SF of the properties acquired are within 15 miles of Hartsfield-Jackson Atlanta International Airport: 1.1M SF across five buildings at WestLake industrial park, two buildings totaling 490K SF in the Southpark industrial park and a 210K SF in Southmeadow industrial park, according to the release.
Ares also acquired 310K SF in four flex buildings at Windward Ridge in the affluent North Fulton County area of Metro Atlanta and two buildings totaling more than 500K SF at Georgia Commerce Center, adjacent to the Port of Savannah.
During Bisnow’s Southeast industrial event on Dec. 15, McDonald President Austin McDonald said his firm was in the process of selling its portfolio, which was an average of 12 years old and 95% leased. McDonald also said the portfolio would sell at a 3.45% capitalization rate.
McDonald told Bisnow Tuesday that the firm sold the portfolio given that values for industrial buildings are “at all-time highs.” But the firm is ramping up its development pipeline again, with the potential for 4M SF of new projects, some of which could rise in the same industrial parks next to the buildings it just sold.
“We didn’t sell any of our existing land,” McDonald said.
Jarred Schenke, Bisnow Atlanta

McDonald Delivers Phase I of New Park – Tampa, FL

Tampa, FL – Development of buildings 100, 200, and 300 of 301 Business Center mark the completion of Phase I of the park. The Class A buildings total 658,788 square feet and feature one rear-load, one front-load, and one cross-dock distribution building. Over 340,000 sf has already been leased. Construction of Phase II, a 208,000 square foot rear-load building, should begin around the 2nd quarter of 2020. Once completed, the 68.84-acre park will total 866,878 square feet of warehouse/distribution space

McDonald Delivers New Park – Clermont, FL

Clermont, Florida – Clermont Business Center has been delivered and is ready for occupancy. The park is located on Trade Avenue at Hancock Road, just south of SR50, with convenient access to Florida’s Turnpike.  The park contains two front-load, class A, warehouse/distribution buildings totaling 107,566 square feet. Building 100 is 63,083 square feet and features 20 dock doors, 2 drive-in doors, and 26’ clear ceiling height. Goodman Distribution preleased 41,202 square feet in Building 100. Building 200 is 44,483 square feet and features 14 dock doors, 2 drive-in doors, and 24’ clear ceiling height.

McDonald begins construction on new park – Greer, SC

Construction has officially begun on what will be Upstate South Carolina’s newest 42-acre distribution park – Carolina Commerce Center. McDonald Development Company is developing the park, which will feature two Class-A, rear-load distribution warehouses totaling 458,754 square feet. Building One will have 327,139 square feet, 32’ clear ceiling height, (32) 9’x10’ dock high doors, (38) 9’x10’ knock out doors, and (2) ramped doors. Building Two will have 131,615 square feet, 32’ clear ceiling height, (15) 9’x10’ dock high doors, (15) 9’x10’ knock out doors, and (2) ramped doors. The current completion date is set for early 2020.

McDonald sells recently built spec building – Orlando

McDonald Development sells recently built spec industrial building in Lee Vista

Atlanta-based McDonald Development continues to sell off portions of its master-planned business park underway in the Southeast Orlando submarket.

The latest, a 159,884-square-foot warehouse facility at 7455 Emerald Dunes Dr., just sold for $15.5 million to Los Angeles-based real estate investment trust Colony Capital – the same firm that reputably sold 474 acres near Universal Boulevard in 2015 for $130 million.

McDonald completed the warehouse this last August. The deal for the facility breaks down to about $97 per square foot. A tenant has yet to be signed on.

The warehouse, dubbed Building G, is the fourth to be completed within McDonald’s Lee Vista Business Center, a roughly 81 acre commercial park directly across from the Orlando International Airport.

Tom McFadden and William Bradford of Lee & Associates had the listing.

Once complete, the master-planned park will consist of two single-story office buildings and five rear-load distribution buildings, for a total of 925,000 square feet of commercial space.

Colony Capital, a known investor in the park, paid $47.9 million for buildings D, E and F at Lee Vista in 2016, bringing its total investment to more than $63.4 million.

The recent deal expands the REIT’s holdings in the park to roughly 639,000 square feet. According to its website, Colony Capital has $43 billion assets under management.

Tenants in the park include Zenith Lighting Inc., a stage lighting equipment supplier; LiveTV, a provider of airline in-flight entertainment systems; and German engineering and manufacturing giant, Siemens Corporation. Goodman Manufacturing and Carrier Enterprise are also tenants.

It’s unclear how much in total the seller has invested in acquiring the land where it intends to build out Lee Vista Business Center.

What is clear is that McDonald paid $1.7 million in 2016 for the lot where it built the most recent warehouse to sell. The firm bought the 11-acre parcel from Famlee Investment Co., as part of a long-standing agreement to buy and develop its property in Lee Vista over time.

The industrial property lies near a number of distribution facilities where certain well-known tenants operate.

Just south of the property is where Publix Super Markets built its $188.5 million distribution center for frozen food and produce in 2014.

Other companies with a presence in the submarket include Chrysler, Goya, Caterpillar, Lockheed Martin and Staples.

Last month, GrowthSpotter reported that a industrial property across from the site traded hands at a nearly 40 percent gain in less than four months from its previous selling price in late December.

That site will be home to TransPremier, a family-owned road construction subcontractor in Florida whose services include material hauling, asphalt milling, full road clean-up, and equipment mobilizations.

McDonald Delivers First Building in New Industrial Park

Tampa, FL – April 5, 2019 – Construction has wrapped up on 301 Business Center’s first new building – Building 300, a 341,890 SF cross-dock.  Building 300 was pre-leased by Bunzl Distribution Southeast, LLC for 212,945 square feet for a 10 year term.

Building 300 is the first building in Phase I of the park to be completed. Additional Phase I buildings scheduled for delivery this summer include Building 100, a 145,540 SF rear-load, and Building 200, a 171,448 SF front-load.

Phase II of the park will include construction of Building 400, a planned 206,400 SF rear-load.

New $17M Spec Development – Orlando

McDonald Development plans to build a total of 230,117 square feet of industrial space on a roughly 20-acre site near Sand Lake Road and Winegard Road. [Courtesy St. Johns Water Management District]

An Atlanta-based developer is looking to build a pair of spec industrial buildings near the Florida Mall, as the industrial sector continues to heat up in Central Florida.

McDonald Development plans to build a total of 230,117 square feet of industrial space on a roughly 20-acre site near Sand Lake Road and Winegard Road, according to plans filed with the state. The developer also wants to build another roughly 1-acre outparcel at the site.

The project, called Sandlake Commerce Center, has an estimated cost of $17.2 million, according to industry standards. Construction is expected to begin this fall with delivery in summer 2019.

McDonald has been in the Orlando market for 20 years, developing over 2 million square feet, said Austin McDonald, President and COO with McDonald Development. “This site was acquired two years ago with the plan to develop it once entitled and permitted. Market leasing activity is strong and the property is ideally situated in the South Orlando industrial market.”

Co-Presidents Bo Bradford and Tom McFadden with Lee & Associates of Central Florida are handling the leasing of the space. McFadden said in an email that no leases have been signed but they are “very active” with prospects.

McDonald Development’s Mcdonald Ventures Xxxv LLC bought the property in October 2015 for $2.9 million, according to Orange County property records.

Rising rental rates and increasing demand are spurring spec industrial construction in Central Florida, local brokers told Orlando Business Journal. Developers may be more keen to pursue new industrial projects now than delay into the future as construction costs soar, said Trevor Hall Jr. of Colliers International Central Florida.

In addition, Sandlake Commerce Center’s central location near Interstate 4, State Road 417 and Orlando International Airport is also a key factor in its development. “You can look in three directions and see good leasing activity,” Hall said. “It’s a regionally significant location.”

David Perez, a senior director with Cushman & Wakefield (NYSE: CWK) in Orlando, said demand for industrial space is so intense in Central Florida that his office is fielding weekly inquiries from industrial developers looking to enter the market.  And it’s not just calls from local developers. Perez said the national perception of Central Florida is changing as the region sees growth in population and jobs.

David Perez, Cushman & Wakefield Industrial Brokerage Services Director

“It’s no longer seen as inferior to South Florida,” Perez said. “We’re starting to get to a point where it’s teetering on the edge of a primary market.” 

Orlando’s industrial vacancy fell to 4.8 percent from 5.6 percent year over year, according to Cushman & Wakefield. Rental rates also rose to $6.60 from $6.29 in that period.

Atlanta-Based Developer Plans 230k sf of Spec Industrial – Orlando

Atlanta-based McDonald Development is preparing to bring more than 230,000 square feet of spec industrial space to market near the Florida Mall, with plans for the type of urban infill site that has drawn it back to Greater Orlando numerous times over the past 20 years.

Located at 7663 Winegard Road, the 20.12-acre site fronts E. Sand Lake Road and lies directly across the street from an industrial park by EastGroup Properties, and a mile northeast of the Florida Mall. McDonald bought it for $2.95 million in October 2015.

The developer has now filed development and construction plans with Orange County and the St. Johns River Water Management District for its “Sand Lake Commerce Center,” proposing two multi-tenant industrial buildings of 79,205 and 150,925 square feet, and a 1.37-acre retail outparcel on the frontage for a later phase.

“We’ve been in Orlando for two decades and built approximately 2 million square feet of industrial in the market, most of which we’ve sold,” president Austin McDonald told GrowthSpotter. “We think this is a great location, and EastGroup has done well across the street. It’s an infill site in the heart of the market, which we prefer.”

McDonald anticipates having all the necessary local permits by October to break ground, with a nine to 10 month construction window to follow. Tilt-up concrete wall construction would be done concurrently for both buildings.

He declined to estimate a total project cost, and said the company has its finalists narrowed down for the general contractor and construction lender roles.

Lee & Associates will market the space for lease, and McDonald will ultimately manage its own property.

Orlando’s industrial market finished the second quarter with net absorption of 446,332 square feet, bringing its year-to-date net absorption to 1.7 million square feet, up 35.6 percent year-on-year, according to CBRE Orlando‘s Industrial Q2 MarketView report.

Within the Southest Orange County submarket, where McDonald’s property would fall and one of six local submarkets measured by CBRE, total inventory through Q2 was more than 40.67 million square feet (ranked 1st of six), total vacancy rate was 6.8 percent (ranked 5th), average asking lease rate was $6.30 (ranked 3rd), and year-to-date net absorption topped 769,000 square feet (ranked 1st).

Florida Engineering Group is civil engineer on the project, Tampa-based HTG is the architect, PSI led geotechnical work and Benchmark Surveying & Mapping was the surveyor.

Suffolk Captures Awards of Excellence

The Hampton Roads Association for Commercial Real Estate (HRACRE) recently announced that two buildings in Suffolk were recipients of Excellence in Development Design Awards for 2008.

HRACRE’s Excellence in Development Design Awards program recognizes outstanding projects throughout Hampton Roads. This year, HRACRE awarded Virginia Commerce Center Building 100, located on Kenyon Road near Downtown with an Award of Merit. Also awarded was the Virginia Modeling, Analysis & Simulation Center, located in northern Suffolk, which received an Award of Excellence.

Virginia Commerce Center Building 100 was entered in  the Best R&D/Flex/Industrial Building category. The state-of- the-art distribution facility will accommodate a multitude of industrial users and maximize flexibility in layout options. The building, made of architectural tilt-up concrete panels, can be used by a single tenant or can be divided into multiple tenant spaces. The 385,320 square-foot building was constructed by McDonald Development Company.

The Virginia Modeling, Analysis & Simulation Center (VMASC) was entered in the Best Institutional/Public Building category. This building along with the Tri-Cities Building, located in Portsmouth, is the first phase of the Hampton Roads Crossing mixed-use master plan which  currently  includes  academic and research buildings, a Class A office building as well as a residential future phase including hospitality and retail. Both buildings have classrooms, labs and offices, but VMASC is  more of a research and development facility, while the Tri- Cities building houses more general classroom space. The architecture is expressive of the the modeling and simulation concept that is indicative of the Harbour View corridor.

“Suffolk continues to endorse good design standards for commercial and industrial development” states Suffolk Mayor Linda T. Johnson. “We congratulate both McDonald Development Company and HL Development on their wins and we look forward to seeing what next year will hold.”

McDonald’s Master Plan

McDonald Development Company specializes in master-planned industrial parks across the Southeast.

Like most real estate developers, John McDonald knows that real estate is a competitive industry. That’s why the founder of McDonald Development Company has chosen to specialize in high quality business parks, including both industrial distribution and single-story office buildings.  Since 1992, the company has developed more than 7 million square feet of new distribution space at an approximate value of $250 million, and currently has more than 1.4 million square feet under construction in Georgia and Florida.

Founded in 1988, McDonald Development Company is developing build-to-suit facilities and multi-tenant industrial business park buildings, for delivery in 2004.