Avison Young principal and Miami managing director Michael Fay, and principals Jay Ziv, John Crotty and David Duckworth.

A South Florida Avison Young team sold a huge Sears distribution facility in Central Florida for $70 million in a deal that was temporarily stalled by Sears' bankruptcy filing.

Sears parent company Transform Holdco LLC sold Transformco Distribution Center in Ocala on Oct. 24 to New York-based industrial real estate company Reich Brothers LLC under a sale-leaseback agreement allowing Transform Holdco to stay in place as a tenant.

Avison Young represented Transform Holdco, better known as TransformCo, which last February bought Sears Holdings Corp.'s assets remaining after its October 2018 bankruptcy filling. Other assets also were liquidated.

TransformCo is owned by ESL Investments, a hedge fund belonging to former Sears CEO and chairman Edward Lampert.

The Avison team listed the Ocala distribution center last year before the bankruptcy filing, which stalled marketing and "put a damper" on some potential buyers, said Michael Fay, one of the Avison principals who led the deal.

Reich Brothers and other potential buyers expressed interest in the property before the filing, said Jay Ziv, another Avison principal who led the deal.

The bankruptcy filing made the future of Sears real estate unclear until the court resolved many issues.

"Everyone had to wait and see," Ziv said. "No one could make a decision during bankruptcy."

The Avison team regularly updated potential buyers during the bankruptcy case, Fay said.

Fay, who also is Avison's Miami managing director, and Ziv closed the deal with Avison principals John Crotty and David Duckworth; vice president Brian C. de la Fé; and associates Berkley Bloodworth and Emily Brais. All are based in Miami except Duckworth and Bloodworth, who are based in Fort Lauderdale.

Transformco Distribution Center is a notable on two fronts. At nearly 2 million square feet, it's the biggest single-building industrial facility in Florida. Its location gives it a central position for statewide distribution.

At 1.94 million square feet, the facility sold for $36 per square foot.

The building is fully leased to TransformCo as a distribution center for Sears and Kmart, which were both owned by Sears Holdings. Kmart Holding Corp. bought Sears in 2004 and functioned together under parent Sears Holdings.

Transformco Distribution Center is on the southwest corner of Interstate 75 and Silver Springs Boulevard, putting it at just over a mile drive from the I-75 ramps. The address is 655 SW 52nd Ave.

It's about a three-hour drive from Tallahassee and a four-hour drive from Fort Lauderdale.

The facility garnered heavy interest from potential buyers given the high demand for distribution facilities. Some hopefuls were eliminated because they wanted to occupy the property, Ziv said.

Avison Young is listing about seven Sears retail stores and auto centers in Florida, including some being sold in the bankruptcy case.

Fay said the firm is "working on contracts right now."

Sears wants to sell other assets without a leaseback agreement since some stores have been closed by the company.

Fay and Ziv declined to disclose the rent per square foot TransformCo is paying for its Ocala distribution center.

Instant Insights /

Sears Distribution Center Sells for $70M After Avison Overcomes Bankruptcy Issues

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