JAS Sells Industrial Building for $7M, Only to Lease it Back

(Save the date: RealShare Industrial 2012 comes to The Bankers Club, Miami, December 5 - 6.)

MIAMI—JAS Forwarding Worldwide, a privately owned freight forwarding and logistics provider, just sold its 70,000-square-foot class A industrial building for $7.05 million. In a creative deal, JAS will lease back the entire building from its new owner, Industrial Income Trust.

CBRE vice president Devin White, along with senior vice president David Albert and associate Andrew Lehrer, represented the seller in the disposition. CBRE also negotiated the leaseback for JAS.  CBRE’s Jack Fraker is serving as moderator of the Development Update Panel at RealShare Industrial in Miami on December 5 and 6.

“Sale-leasebacks are not common in this market,” White tells GlobeSt.com. “Typically, users who own their facilities do so because they value ownership. In this area, many owner-users perceive leasing to be a waste of money and are willing to own at a cost typically higher than the comparable lease rate.”

This particular sale-leaseback made sense for both the buyer and seller. The seller wanted to unlock the equity in the building in order to reinvest back in to their expanding business, White explains.

“The building is a larger building for the market and because there wasn’t the depth of owner/user buyers, especially cash buyers given the landscape of the lending environment,” White says. “We looked to the investment community to gauge their interest. As the investment community continued to gain momentum in the Miami-Dade Market, we were successful in negotiating an equitable deal for the seller and the buyer.”
 
Located at 2750 NW 84th Avenue in the heart of Doral, the property offers proximity to both the Miami International Airport and the major transportation routes. According to White, the gross lease rate was within the fair market value for class “A” distribution buildings located in Doral.

Leasing activity for Class A space has remained consistently busy, CBRE reports. Industrial paces under 50,000 square feet typically have several proposals within a short period of time. Traditional spaces larger than 50,000 square feet will get leased within six to eight months.  

“It is the non-traditional distribution spaces that we see having some difficulty,” White says. “For example, DCT Commerce Center is a 335,000-square-foot industrial park currently under construction. Prior to delivery of the first building, two tenants signed leases totaling approximately 273,000 square feet. This is just one example of the significant leasing activity in the Miami Airport market.”  

Class A space in Miami’s Airport/Doral submarket is highly constrained, pushing the overall average for direct asking gross rates to $9.12 per square foot in that submarket, according to CBRE. This rate is the highest within the Miami-Dade submarkets. The overall market rate is $7.38 per square foot.