Partnership Buys Two Orlando Industrial Portfolios

Brennan Investment Group sold the two assets for $17 million. The new owners plan to reposition the properties to increase occupancies and revenue growth.
Parkway 4
Parkway Commerce Center in Orlando, Fla.

A partnership between Denholtz Associates and Militello Capital has purchased two industrial/flex portfolios in Orlando, Fla.,  for $17 million from Brennan Investment Group. The Silver Star Portfolio is an eight-building, 254,915-square-foot portfolio acquired for $12 million, while the Parkway Commerce Center is a two-building, 91,500-square-foot property bought for $5 million.

Located at 3600-3802 Silver Star Road, the buildings making up the Silver Star Portfolio range in size from 26,400 to 39,600 square feet and the entirety of the portfolio is currently 95 percent leased to 30 different tenants. With a 68 percent occupancy rate, the Parkway Commerce Center is located at 3501 Parkbreeze Court, with 23 tenants currently leasing the property.

“Each of these acquisitions highlights our overarching investment strategy, which relies upon making well-timed and careful investments in underachieving properties requiring the care of a skillful owner and operator to bring them to maximum profitability and efficiency. The Silver Star Portfolio plays to our strength of acquiring multi-tenanted properties exhibiting operating inefficiencies and taking over the management of these properties to more effectively drive revenue and NOI growth,” said Stephen Cassidy, president of Denholtz Associates, in a prepared statement.

Hot Market

In 2016, Orlando’s industrial flex market boasted an 8.2 percent vacancy rate with an immediate submarket vacancy rate under 4 percent. The Orlando market saw 2.3 million square feet of net positive absorption during the year—a trend that is expected to continue and put upwards pressure on leasing terms for the already restricted supply of available flex space. Noteworthy local infrastructure developments and a pro-business environment have led to Orlando’s considerable development over the past years.

“With a comparatively lower occupancy at the Parkway Commerce Center, our experience with turning around multi-tenant properties will enable us to make strategic investments and properly market the available space to return the property to high occupancy and profitability,” added Cassidy. “Our presence in Florida continues to be driven by these types of opportunistic investments in well-located spaces that allow us to reposition assets to execute our multi-tenant investment strategy,” Cassidy concluded.

North John Young Parkway, State Route 434, U.S. Highway 441 and Interstate 4 are all easily accessible from the properties. The Orlando International Airport is also less than 12 miles away.

Earlier this year, Denholtz Associates also leased 100 E. Pine St., a 82,892-square-foot six-story office/retail building located in downtown Orlando.

Image courtesy of Denholtz Associates