A warehouse in Hialeah has sold for $26.8 million in what continues to be an attractive South Florida industrial market.
The real estate private equity firm Wheelock Street Capital, with headquarters in Connecticut and Massachusetts, and the Fort Lauderdale-based real estate investment firm Mitchell Property Realty, Inc. bought the facility. The 250,000-square-foot building at 1000 SE Eighth St. dates back to 1973, and the 8.27 acres last traded for $13.5 million in 2008. The listing broker was Barry Katz of Global Connections Realty; Andrew Gurewitsch and Harry Weisman of Windsor Realty Partners represented the buyers.
Located in Hialeah’s Transit Oriented Development zone, the buyers also have the right to develop the property of up to 1,000 residential units in a mid-rise building, according to the release.
Large deals continue in Miami-Dade county, according to the JLL third quarter 2019 industrial report. The county experienced 43 transactions above 100,000 square feet in the past four years. The number of large sales compares to the activity the county had between 2007 to 2015.
“These prices may seem like a lot but it’s not. It’s due to heavy demand of industrial space and lack of supply,” said David Albert, senior vice president of the commercial real estate firm CBRE.
The price is in line with the market, said Albert. Wheelock Street Capital and Mitchell Property Realty, Inc. paid about $104 a square foot for the warehouse. In the most recent comparable sale by square footage, Prime Hialeah LLC bought the 128,947-square-foot facility at 1000 Hialeah Dr. in May for about $5.692 million or $44 a square foot.
Demand for industrial space and limited supply are driving prices up, said Albert.
“We’ve had a steady increase in average lease rates for the past 10 quarters and vacancy rates are low. We are in a healthy market.”
Two factors about the space stood out to Ed Mitchell, the president of Mitchell Property Realty LLC. He said the warehouse’s central location — a mile from Miami International Airport and six miles from Downtown Miami — and a long-term lease with the umbrella manufacturing company Tuuci made it an appealing buy.
Tuuci uses the facility for light assembly and worldwide distribution. Mitchell did not disclose the lease agreement but rent in Hialeah averages $5.45 a square foot, according to the JLL third quarter 2019 industrial report
The central location is important for buyers, said Albert, given that close proximity to people is important for e-commerce.
“The question for an owner is ‘what do I do if the tenant leaves?’ The future use of this building is many things. The way people look at warehouse spaces is very different because of e-commerce, they want to be close to people because demand of shortened delivery times,” said Albert.
Sales and development of warehouse spaces continue in Miami-Dade County. Hialeah alone has seen plenty of interest from developers. The facility is a five-minute walk to the coming 415,460-square-foot warehouse distribution center Miami Axis Park at 725 SE Ninth Court. The 20.6 acres traded for $27.38 million in 2017. Construction will be completed in 2020.
“There is a lot of demand for industrial across the country,” said Albert. “South Florida is among the top three markets across the country, with Dade the most active and sought after.”