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Reliable Cash Flows
The Portfolio provides a predictable and stable income
stream with an average of 4-years remaining lease term
and no tenant comprising more than 5% of the total
rentable area. Current ownership has successfully been
able to organically grow rental income by over 35% across
the three Properties while selectively gentrifying the
rent roll and removing “undesirable” tenants. Through
continuing to build upon current ownerships efforts and/
or repositioning specific buildings within the Portfolio,
additional value creation can be achieved.
Upside Potential
Evenwith the recent growthof rental rates, the in-place rents
across the Portfolio are still approximately $2 PSF below
market. Through making minor capital improvements, new
ownership will be positioned to justify rental rate increase
and continue to grow net operating income. Combined
with the leverage of owning multiple industrial properties
in a constrained submarket, the Portfolio should be viewed
as an exceedingly rare, value-add opportunity.
Location
South Florida is one of the top three land-constrained
industrial markets in the U.S., along with Southern
California and Northern New Jersey. In fact, South Florida
has the lowest ratio of industrial SF per capita (62 SF) of
all industrial markets. Additionally, estimates have South
Florida adding the lowest amount of industrial product
per capita (33 SF) over the next five years. The Portfolio
possesses true in-fill locations within the most desirable
industrial submarkets in South Florida: West Palm Beach
and Riviera Beach, each of which is heavily sought after by
tenants and investors alike. Furthermore, each Property is
proximate to Interstate 95, the main north/south artery of
the Eastern United States.
Velocity
The Palm Beach County Industrial market is one of the
tightest andmost fundamentally sound in the entire country,
with an overall vacancy rate of 4.2%. The offering is entirely
comprised of small bay warehousing space, which has an
overall vacancy rate 4.0%
across Palm Beach County. With
over 677,000 sf leasing activity in 2016 alone, demand for
industrial space in Palm Beach County is extremely robust.
The West Palm Small Bay Advantage