An Atlanta developer has taken a step closer to building more commercial space near Lake Nona.
Seefried Industrial Properties is under contract to buy the 19.5 acres at 7600 Narcoossee Road from Lake Nona developer Tavistock Development Co., sources close to the deal told Orlando Business Journal. The developer — known for its Amazon projects in Central Florida — plans to build 280,000 square feet of industrial space in two buildings on the site, which may cost $21 million to build, based on industry standards. Seattle-based Amazon.com Inc. is not expected to be the tenant in the building.
In addition, Raleigh, North Carolina-based civil engineer Kimley-Horn & Associates Inc. is working to secure building permits for the site. Colliers International Central Florida's Trevor Hall Jr., executive managing director, and Emily Franklin-Peiper, land services associate, represent Tavistock. Lee Morris, executive managing director of Colliers International Central Florida, represents Seefried.
OBJ reported in October that Seefried was in talks with Tavistock to buy the property. It's not known what the price for the land will be. The land last traded hands in 2007 for $5.2 million, according to the Orange County Property Appraiser's website. The project's construction timeline and scope also were unavailable. In addition, none of the parties in the deal were available for comment.
Seefried manages more than 26 million square feet of industrial space worldwide. A breakdown of what the developer has in its Central Florida portfolio was not available.
That said, industrial real estate is a hot sector, mostly because of the e-commerce boom led by Amazon. Retailers want distribution centers closer to customers so they can deliver products faster, which is why new users are lining up for industrial space. In fact, the market is the strongest it’s been in years, according to Justin West, vice president and regional manager of Orlando and Jacksonville for Marcus & Millichap Inc. (NYSE: MMI), who isn't involved in the deal.
“With vacancy continuing a downward trend and job growth continuing an upward trend, we need more warehouse and distribution facilities to be built to keep up with the demand," West said. "Many of our clients are seeking developable areas near major transportation thoroughfares, so they can take advantage of this robust market.”
Central Florida's overall population and business growth have helped drive demand for warehouses, distribution centers and manufacturing plants. More than 21 million people live within 250 miles of the Interstate corridor between Daytona Beach and Tampa, which is creating demand for new space, according to Colliers International Central Florida (Nasdaq: CIGI).
The airport/southeast submarket — which has the most industrial space in Central Florida — has an industrial vacancy rate of 7.7%, which is higher than the Orlando-area average of 5.7%, Lee & Associates Central Florida reported. In addition, the submarket's average asking rate is $5.16 per square foot, which is lower than the Orlando-area average of $6.83 per square foot.
Source: Orlando Business Journal