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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 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.

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 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.