Chicago Firm Buys Industrial Site for $16M

JACKSONVILLE, FL-In their first Jacksonville acquisition, Chicago-based True North Investment principals Carl Manofsky and Tim Luby paid Delhaize America $16 million, or $20.16 per sf, for a 793,500-sf former Food Lion distribution center in suburban Green Cove Springs, FL.Manofsky-Luby say the transaction was the largest industrial property sale in Florida in 2003. The deal closed Dec. 31 but the partners only now announced the transaction. After closing the deal, they signed Harvey’s to a 244,000-sf lease at the property located on a 141-acre site at JP Hall Road and Route 17. Harvey’s is a regional grocery chain acquired by Delhaize America during fourth quarter 2003.Manofsky-Luby described the lease as “long-term” and declined to provide GlobeSt.com with an estimated value of the contract. However, Jacksonville industrial brokers familiar with the Green Cove Springs submarket, tell GlobeSt.com the lease was probably for 15 years at an estimated $3.50 per-sf rent, triple net. That would make the estimated aggregate value of the lease about $12 million, brokers tell GlobeSt.com.Harvey’s will use the property as a distribution center with a staff of 100 working in three-shifts around the clock.Manofsky-Luby say they have started a $2.5-million upgrade of the property. To add value to the site, they also plan to redevelop the asset into a multi-tenant industrial center divided into two to six sections, ranging from 120,000 sf to 250,000 sf. Future development may include an additional 900,000 sf of space, the partners say.”Companies today are seeking distribution centers that are larger than ever before,” Manofsky says. “Because this large site can be expanded to contain up to 1.7 million sf of improved space, this property can accommodate the future growth of any tenant and help them avoid a costly relocation caused by expansion restraints.”The property was on the market for lease for about a year before Delhaize America decided to sell it. Manofsky-Luby tell GlobeSt.com there were “multiple bidders” for the property. At $20.16 per sf, area brokers and construction industry estimators tell GlobeSt.com that Manofsky-Luby got “a great deal” because replacement cost of a comparable facility today would be at least $40 to $50 per sf.Jim Belcher, senior vice president and principal of Philadelphia-based Hart Corp. who negotiated for Manofsky-Luby, tells GlobeSt.com the deal was “fairly complicated … with a large corporate owner and its recent acquisition of Harvey’s.” He says once the property was offered for sale, “it moved quickly.” Craig Neilson of Hart Corp and Walter Reed of Florida Commercial Realty represented Delhaize America.Manofsky-Luby are scouting the North Florida for other acquisitions. “Jacksonville annually ranks as one of the fastest-growing markets in the country with an excellent labor base, diversified economy and a good balance between manufacturing and logistics companies,” Manofsky says. “The Jacksonville area is a regional hub attracting companies serving not only Jacksonville, but southern Florida and the multi-state region.”He says that “unlike many other markets, Jacksonville’s vacancy rates are relatively low and this market has not seen a dramatic decline in industrial rental rates.” Manofsky adds, “Jacksonville offers a progressive, pro-business environment that bodes well for commercial property investment. The partnership of Enterprise Florida and Cornerstone Regional Development Partnership is aggressively retaining industry and attracting new business, which is very important for companies like ours seeking a long-term business investment.”In their 20 years as partners, Manofsky-Luby have acquired industrial properties in 12 states totaling 18 million sf and valued at $400 million. Both have held previous senior investment positions with HSA Commercial Real Estate, Lincoln Property Co. and CB Richard Ellis Inc.