A core-plus portfolio of five class A and B well located infill industrial assets in the high-growth Sun Belt markets of Tampa and Lakeland, Florida. The portfolio also benefits from high barriers to entry, critical proximity to labor and excellent access to dense and growing residential areas.
The property features a granular rent roll with staggered lease expirations, which provides it with stable in-place cash flow and diverse exposure to an array of tenant uses and industries.
The all-in acquisition basis for this portfolio is $150.89, which is ~10% below estimated replacement cost of $166 per square feet. This portfolio will attract tenants due to its prime location and its ability to offer rents well below newer, class A product. There are limited existing options for industrial customers in these infill, strategic locations. Last-mile warehouses and distribution centers that serve the increased demand for e-commerce have particularly benefitted.
This acquisition will be the REIT’s first in Florida and will attract tenants due to its prime location. Moreover, ongoing supply chain constraints resulting from the COVID-19 pandemic will continue to expand development timelines and put upward pressure on construction costs. This will make it more difficult and expensive for developers to replicate this multi-tenant, infill industrial product that is demised down to smaller suites.
- Tampa’s industrial activity continues to see positive market fundamentals with strong leasing activity, increasing rental rates and a lack of new supply in many of the core submarkets.
- The Tampa MSA has experienced high population growth (15% since 2010) and new household formation in recent years.
- Lakeland’s fundamentals have also remained strong as this growing industrial pocket continues to attract tenants because of its ability to serve both Orlando and Tampa via I-4.
- This location offers customers more affordable rents relative to more centrally located infill locations in Orlando and Tampa.