Walmart's plan to open a new distribution center is now moving forward in the city of Cocoa. This will be Walmart's second distribution center in Central Florida, the first being a 2.2 million square-feet e-commerce facility in Davenport, Florida. The new facility will be situated on a 146 acre with 592,830 square-foot building scheduled to finish construction by end of 2018. This new plan is estimated to generate $96.2 million in new capital for Cocoa and also create 239 jobs while the Davenport facility will be creating 1,000 new jobs. Walmart is also planning to open a Supercenter and Neighborhood Market in Central Florida, adding more job growth in the area.

Recent cap rate trends for Walmart are in the low 5% range on an absolute-triple-net basis, which includes both ground lease and fee simple sales. Meanwhile, Walmart Neighborhood Market hovers in the high 4% range with all transactions being ground leases with long-term leases.

This trend shows Walmart is trading at lower than average Central Florida cap rates for the 1st half of 2016, which was at 6.25% shown in the graph below. This is due to the fact that Walmart is considered a relatively safer investment. While South Florida and West Florida regions attract many investors due to the growth in Miami and Tampa, Central Florida is on its way to progress, especially with Walmart's new expansion and Orlando's growing attractions.

Regional breakdown for cap rates in Florida.

Instant Insights /

Walmart's Second Expansion Into Central Florida

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