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Atlanta Developer, after landing big anchor tenant, to break ground on new industrial park in East Tampa

An Atlanta developer has landed a giant anchor tenant for a new industrial park in East Tampa and plans to begin construction by the end of the year.

McDonald Development, which acquired the nearly 70-acre site in 2015, has signed a deal with Bunzl, a large distributor, for 200,000 square feet in the 301 Business Center. Bunzl distributes everything from groceries to cleaning supplies.

The park is east of U.S. 301, between East Columbus Drive and East Broadway Avenue.

Three buildings will break ground in December, said Austin McDonald, chief operating ofcer of McDonald Development. The
three buildings include a 144,500-square-foot front-loading warehouse and a 170,900-square-foot rear-loading warehouse.
Bunzl’s space is in the 341,800-square-foot cross-dock facility. (Cross docking is the loading of products from one trailer directly
onto another.) There’s also space for an eventual fourth building, which will be 206,400 square feet.


Debt and equity partners are in place for the frst phase, though McDonald declined to identify them.


The 301 Business Center is a signifcant project for East Tampa. The vast majority of Tampa Bay’s industrial development is
concentrated in Lakeland and Polk City. Large sites like the park are difcult to come by in East Tampa, which is largely already
built out with warehouses and industrial facilities. It’s also breaking ground at a time when top-tier warehouse space in Tampa is
extremely limited, with a vacancy rate below 2 percent.


Julia Rettig and Jessica Mizrahi, a team of brokers from Cushman & Wakefeld of Florida Inc. in Tampa, represented McDonald in
the Bunzl deal and are marketing the remaining space for the developer. Kostas Stoilas of Fortress Commercial Real Estate LLC in
Tampa and Cameron Duff of NAI Heartland represented Bunzl in the lease transaction.


“There’s pent up build in every building sector,” Rettig said. “This product will capture a lot of these users without room to grow.”

With the variety of warehouses, 301 will be able to accommodate a variety of users, from homebuilding supply companies to
e-commerce operations, McDonald said. Last-mile delivery operations — a growing logistics sector as more companies strive for
same- or two-day delivery — are also likely to land in the park, given its proximity to Tampa’s population centers.


“What’s happening with the last-mile guys is that they’re taking [older, less functional] space because there’s nothing else in the market, and they want infll sites,” Rettig said. “And typically infll sites are going to be older products. We’ll be able to deliver state-of-the art, Class A infll.

Sanford commerce center sold for $10.4M

Cushman & Wakefeld negotiated the sale of the 117,600-square-foot North Park Commerce Center in Sanford for $10.4 million to Cabot Properties of Boston. North Park Commerce Center comprises two Class A, small bay, rear-load, dock-high distribution buildings developed in 2009. Cushman’s Mike Davis, Michael Lerner and Rick Brugge represented Atlanta-based McDonald Development Co. in the sale.

$47.9M Warehouse/Distribution Center Sale Notches Central Florida Milestone

A huge Class A industrial complex near Orlando International Airport sold today for top dollar.

An entity related to Los Angeles-based Colony Capital LLC spent $47.9 million — or a record $100 per square foot — to buy the three-building, 479,100-square-foot LeeVista Business Center warehouse and distribution center from Atlanta based McDonald Development Co., Cushman & Wakefeld announced on Oct. 27.

Mike Davis, Michael Lerner and Rick Brugge of Cushman & Wakefeld represented McDonald Development in the sale.  The price per square foot is the highest that’s ever been paid for a multitenant industrial complex in the Orlando area, Cushman & Wakefeld reported.


“This portfolio had all the attributes that discerning investors covet including high-quality construction, credit tenants, limited near-term rollover and an outstanding location adjacent to Orlando International Airport,” said Lerner, Cushman & Wakefeld senior director, in a prepared statement. “As a result, the offering was hotly contested and our client was able to achieve premium pricing.”


The 27.7-acre complex — which featured one of just three industrial speculative developments built in 2013-2014 that kicked off the local real estate recovery, as previously reported by Orlando Business Journal — has three Class A, rear-load warehouse and distribution buildings that were built between 2009 and 2016. One of the buildings ranks among Central Florida’s largest multitenant warehouses, based on OBJ research.


The center was 84.4 percent leased at the time of the sale, which hasn’t yet hit public records. Notable tenants include Thales USA, ThyssenKrupp Industrial Services, Siemens Corp., Carrier and DHL Global Mail.

The sale is part of a big surge in industrial development, drawing significant interest from both investors and developers.


Meanwhile, the complex is within the 1,900-acre LeeVista Center, a mixed-use development just five minutes from major distribution routes: State Road 528, Interstate 4, Florida’s Turnpike and State Road 417

Atlanta Company Buys Land for New Industrial Park

McDonald Development Co. purchased 68.7 acres east of U.S. 301 and south of Broadway Avenue for $7 million.


BUYER: McDonald Ventures XXXIV LLC, Atlanta
SELLER: IDI Services Group LLC
PROPERTY: 9230 E. Columbus Drive and portions of Broadway Avenue and E. Columbus Drive, Tampa
PRICE: $7 million
PREVIOUS PRICE: $4.5 million, October 2014
LAW FIRM ON DEED: Dean, Mead, Egerton, Bloodworth, Capouano & Bozarth PA, Orlando


PLANS, DESCRIPTION:


McDonald Development Co. purchased 68.7 acres east of U.S. 301 and south of Broadway Avenue for $7 million.


The price equated to $101,892 per square acre.


The Atlanta frm plans to develop an industrial park on the property. The project, which is currently known as 301
Business Center, is entitled for 900,000 square feet of warehouse/distribution space.


“We will likely build three to fve buildings in two phases,” says Austin McDonald, chief operating ofcer for McDonald
Development. “Outside of our offer to build to suit, we expected to build on spec. We should start construction this
summer.”


The frst building is scheduled for completion in the second quarter of 2016.


The frm was most interested in the property, he says, because of its location near several major roadways, including
Interstates 75 and 4 and State Road 60/Adamo Drive.


The purchase is McDonald Development’s frst acquisition and development along the west coast of Florida. The
frm started developing in Orlando in 1998 and currently owns about a dozen buildings. McDonald expects this frst
project to lead to additional developments along the west coast.


“We like to get into a market and look for other opportunities,” he says

Atlanta developer resurrects plans for massive industrial park in East Tampa

An Atlanta developer has snapped up 70 acres in East Tampa and will resurrect the previous owner’s plans for the site.

McDonald Development Co. paid $7 million for the land in a deal that closed Monday, according to Hillsborough County property records. The site is east of U.S. 301, between East Columbus Drive and East Broadway Avenue.

A team of brokers from Cushman & Wakefield of Florida Inc. — Mike Davis, Bruce Erhardt, Julia Rettig and Jeff Lamm — represented the seller, Atlanta-based IDI Services, in the transaction.

IDI bought the land in 2004 and had it entitled for 900,000 square feet of warehouse space. McDonald Development Chief Operating Officer Austin McDonald said his company is evaluating how big the first phase will be, but he plans to break ground by the end of the year — on a speculative basis, if necessary.

Large industrial developments can mean millions in capital investment and create hundreds of jobs when big warehouse users move in.

IDI had named the site 301 Business Center but never broke ground on the park. It is exiting the Tampa market, McDonald said.

McDonald said his company is still evaluating a name for the park and has yet to hire a brokerage firm to market the property.

The park will accommodate large warehouse users in the 300,000-square-feet-and-up range, as well as smaller users in the 10,000- to 50,000-square-foot range — industrial buildings that typically come with more office space. “It’s basically dead center in the East Tampa submarket,” McDonald said. “Location wise, it was a gift.” In Tampa Bay, most large warehouse users typically zero in on the Interstate 4 corridor, because they can serve both Tampa and Orlando from Polk County. But McDonald said he’s very comfortable with the East Tampa site because his competition will be limited. There’s far less available land in the East Tampa area than Polk County.

“We’ve been in Orlando for a decade and have looked at Polk County and Tampa,” McDonald said, “and we really wanted to be in Tampa.”

 

Cushman & Wakefield’s Capital Markets Group brokers the sale of the Peachtree North Industrial Portfolio in Atlanta

ATLANTA, GA – January 8, 2015 – Cushman & Wakefeld announced today that its National Industrial Advisory Group has represented McDonald Development in the sale of the Peachtree North Industrial Portfolio consisting of four multi-tenant class A warehouse buildings totaling 708,370 square feet. Located in Atlanta’s largest I-85/Northeast industrial submarket, the portfolio comprises buildings 1200, 1300, 1327 and 1400 Northbrook Parkway.

Members of the Atlanta-based Cushman & Wakefeld team that marketed the property included Executive Director Stewart Calhoun, Executive Director David Meline, Senior Director Samir Idris and Director Casey Masters.
The buyer was Industrial Property Trust Inc., a Denver-headquartered REIT with a portfolio of industrial properties across the U.S. The sale closed in late December and the purchase price was undisclosed.

The Peachtree North Industrial Portfolio was 92% leased at the time of sale to a highly-diversifed rent roll with over four years of weighted average remaining term. Its densely-developed infll location immediately adjacent to the I-85/Old Peachtree Road interchange provides immediate access to local, regional and national distribution routes and Gwinnett County’s highly-skilled population base.

Cushman & Wakefeld advises and represents clients on all aspects of property occupancy and investment. Founded in 1917, it has 250 ofces in 60 countries, employing more than 16,000 professionals. It offers a complete range of services to its occupier and investor clients for all property types, including leasing, sales and acquisitions, equity, debt and structured fnance, corporate fnance and investment banking, appraisal, consulting, corporate services, and property, facilities, project and risk management.

McDonald to build distribution center

McDonald Development Company plans to start work in the frst quarter of next year on a distribution center at the
Crossroads Distribution Park on Gills Drive in Orlando.


As planned, the facility would include 86,500 square feet with front-loading capabilities.


Tom McFadden and William Bradford, principals with Lee & Associates Central Florida, represented Duke Realty in its
$832,960 sale of the 4.38-acre site. Lee & Associates will also handle leasing for the space.

FedEx Growing in Atlanta’s North Side

FedEx Ground will expand its distribution center next to McCollum Field in Cobb County, Ga.


The Memphis, Tenn.-based package shipper (NYSE: FDX), and chief rival to Atlanta-based United Parcel Service
Inc. (NYSE: UPS), will add 85,000 square feet to the facility. The move will aid FedEx’s handling of local, regional and
country-wide service.


“We believe that FedEx’s business model and commitment to the community is a perfect fit for our county and we
look forward to helping them grow as they continue to meet the needs of the business community and the citizens
of Georgia,” said Rob Garcia, chairman-elect of the Cobb Chamber of Commerce, in a statement.


FedEx Corp.’s “SmartPost” unit in July signed a 201,600-square-foot lease at McDonald Development Co.’s SouthPark in
Clayton County. SmartPost is a division of FedEx that focuses on business with e-commerce and catalog companies.

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.”

Giant warehouses point to logistics growth

Trammell Crow Co.’s Wit Truitt assisted PetsMart Inc. last year in leasing a 1 million-square-foot distribution facility in Illinois. This time, the transaction is heading a little closer to Truitt’s home base of Atlanta, as the pet products retailer is looking for a site for another 1 million-square-foot warehouse along the Interstate 85 South corridor.

Last year, he worked with Staples Inc., which is building a distribution center along the I-20 West corridor (see Big Deal, 2C). The ofce supply company expects to be in the building by the frst of next year.

These are just two examples of the type of massive warehouses consumer companies are building in metro Atlanta. Brokers and economists say the trend shows the growing strength of the Atlanta market as a distribution hub connected to different modes of transportation — railways, roadways, ports and airports. The trend also points to the vibrancy of the Southeast’s economy and Atlanta’s consumer base of more than 4 million people.

Truitt said the distribution facility deals he’s worked on are primarily regional consolidations. And they signify that operations are growing, he said. PetsMart, for example, is trying to open 90 to 100 stores a year.

“It’s defnitely what’s spurring this growth,” he said.

Although these decisions are too long term to consider consumer confdence numbers, it does signal that the companies are relatively confdent about their prospects for expanding their operations, said Roger Tutterow, director of the Econometric Center at the Michael J. Coles College of Business at Kennesaw State University.

“If they’re investing that type of resources in a warehouse … they expect to be growing their product line over time,” he said.

Last September, BrandsMart USA moved into a 226,200-square-foot facility expandable to 900,000 square feet in McDonald Development Co.’s SouthPark development on Interstate 675 in Clayton County. McDonald did a 657,000-square-foot building for Whirlpool Corp. several years ago and a 272,000-square-foot warehouse for H.H. Gregg.

Companies are moving into bigger and bigger warehouses, said John McDonald. In the 1990s, the consolidations were into centers that were 200,000 to 400,000 square feet, but now, buildings are 500,000 to 1 million square feet, he said.

Although consumers have driven the economy out of the recession by their purchasing power, McDonald said most of the large buildings are cost-savings decisions.

“The larger the building, the less they cost, the lower the rent,” he said.

The demand for big-box warehouses is best connected to a movement within the distribution and logistics industry to make businesses more efcient and to reduce costs, said Trent Germano, executive vice president of Carter, whose 94-acre New Manchester Distribution Center is home to JVC Americas and Medline Industries Inc., a medical equipment supplier.

“The trend seems to be toward having fewer distribution facilities with a somewhat longer haul,” he said.

One of the largest warehouse deals is Home Depot’s more than 1 million-square-foot facility in Greenwood Industrial Park in McDonough. Also in Henry County, Atlanta-based Cousins Properties Inc. is developing a 416,000-square-foot facility in partnership with Weeks Properties of Atlanta. The facility, which is expandable to more than 790,000 square feet, is one of fve buildings planned for King Mill Industrial Park, which is expected to total 2.9 million square feet of industrial space.

The decisions are driven by location, a compatible labor force, the value of the property and the cost of developing the facility, Germano said.

Jeff Humphreys, director of The University of Georgia’s Selig Center for Economic Growth, said the trend shows longterm business strategy.

“Atlanta just makes sense for a distribution center regardless of strength of consumer confdence,” he said.

Humphreys said companies also are looking at the distance to the market. To determine the cost of the location, they consider freight rates, air transportation costs and shipping costs.

As an emerging logistics powerhouse, Atlanta and its surrounding counties appear to be flling the bill.