How’s this for a bidding war in South Florida? When the 880,543 sq. ft. Palmetto Distribution Center in Miami-Dade County went on the selling block, the owner fielded 27 offers from a variety of hopeful buyers. Pension funds, life insurance companies, real estate investment trusts, private investors and foreign investors all made a play.
San Francisco-based AMB Property Corp., the winning bidder, ultimately paid $66.5 million for the highly coveted industrial asset located in Medley, Fla. The deal equates to a 5.9% capitalization rate, the return AMB will receive in the first year based on the purchase price and net operating income.
The transaction was the lowest recorded cap rate for a major industrial asset in Florida since the market downturn in 2007, according to Cushman & Wakefield, which represented the seller, an affiliate of TA Associates Realty, a Boston-based private equity firm. The transaction closed in early September.
Palmetto Distribution Center, which has been renamed AMB Miami International Logistics Park, is located at the interchange of the Palmetto Expressway (SR-826) and U.S. Highway 27 in Medley. The property, which includes five Class-A distribution buildings, was 95% occupied at the time of the sale.
“With so many qualified purchasers, buyer selection was difficult,” says Mike Davis, executive director of Cushman & Wakefield’s Southeast Capital Markets Group. “Ultimately, we selected AMB Property Corporation based upon the purchase price and its closing track record.”
Brian Smith and Wayne Ramoski, both executive directors of industrial brokerage at Cushman & Wakefield, also helped negotiate the sale on behalf of the seller.
Shares of AMB (NYSE: AMB), a real estate investment trust, closed at $26.32 on Wednesday, up from $23.60 a year earlier.