W&D Seals $96M FL Industrial Deal

The loan package covers 13 properties in Miami and Fort Lauderdale. Strong fundamentals make South Florida attractive to lenders.

Florida Portfolio courtesy of Walker Dunlop (002)Walker & Dunlop Inc. recently closed a $96 million loan package for a 1.6 million-square-foot industrial portfolio in Florida, and did so in a flash—just 45 days, to be precise. The firm orchestrated the financing for the assets, located in Miami and Fort Lauderdale, through one of its life company correspondents.

Baker’s Dozen

The financing comes in the form of 13 loans, one for each of the portfolio’s 13 properties, and features what W&D describes as an attractive interest rate. The group of industrial facilities turned the heads of the lending community. “Because of the record-low vacancies, rising rents and lender appetite for this asset type, lenders are extremely competitive, and that leads to better loan terms for our borrowers,” Nikki Perez, senior analyst with Walker & Dunlop Inc., told Commercial Property Executive.

South Florida’s industrial sector is hard to ignore. In the Miami-Dade area, Walker & Dunlop notes, such factors as regional population growth, expansion of the Miami International Airport and the Port of Miami are driving demand.

Fort Lauderdale is benefiting from Broward County’s overall dearth of developable land and shortage of available industrial square footage, according to a report by commercial real estate services firm CBRE.  The numbers tell the story. The total vacancy rate in metropolitan Miami was just 3.3 percent in the second quarter of 2017, per the CBRE report, and only 3.2 percent in Fort Lauderdale.

South Florida Factors

The source of the industrial sector’s success is multi-faceted. “I’d say [industrial demand] is driven by companies that are tied to commercial and residential developments, think Floor & Décor and Pet Supermarket. Both signed deals in Broward least year for more than 80,000 square feet each,” Perez said. “Since new supply is scarce, companies like these are hungrier for space more than ever. For us here in South Florida, the Port of Miami is also giving way to larger ships that carry in a lot more cargo. This has increased the need and desire for warehouse space as well.”

W&D asserts that the Florida portfolio transaction is indicative of an increasing need for industrial financing across the country, and the company has acted accordingly by substantially expanding its presence in the sector.  In 2016, W& D closed industrial loans exceeding $549 million for a total of 62 assets. It appears 2017 will prove even more active for the company, with loans and total volume in the first half of the year having surpassed those completed in the first half of 2016.