Walmart's plan to open a new distribution center is now moving forward in the city of Cocoa. This will be Walmart's second distribution center in Central Florida, the first being a 2.2 million square-feet e-commerce facility in Davenport, Florida. The new facility will be situated on a 146 acre with 592,830 square-foot building scheduled to finish construction by end of 2018. This new plan is estimated to generate $96.2 million in new capital for Cocoa and also create 239 jobs while the Davenport facility will be creating 1,000 new jobs. Walmart is also planning to open a Supercenter and Neighborhood Market in Central Florida, adding more job growth in the area.
Recent cap rate trends for Walmart are in the low 5% range on an absolute-triple-net basis, which includes both ground lease and fee simple sales. Meanwhile, Walmart Neighborhood Market hovers in the high 4% range with all transactions being ground leases with long-term leases.
This trend shows Walmart is trading at lower than average Central Florida cap rates for the 1st half of 2016, which was at 6.25% shown in the graph below. This is due to the fact that Walmart is considered a relatively safer investment. While South Florida and West Florida regions attract many investors due to the growth in Miami and Tampa, Central Florida is on its way to progress, especially with Walmart's new expansion and Orlando's growing attractions.
Walmart's plan to open a new distribution center is now moving forward in the city of Cocoa. This will be Walmart's second distribution center in Central Florida, the first being a 2.2 million square-feet e-commerce facility in Davenport, Florida. The new facility will be situated on a 146 acre with 592,830 square-foot building scheduled to finish construction by end of 2018. This new plan is estimated to generate $96.2 million in new capital for Cocoa and also create 239 jobs while the Davenport facility will be creating 1,000 new jobs. Walmart is also planning to open a Supercenter and Neighborhood Market in Central Florida, adding more job growth in the area.
Recent cap rate trends for Walmart are in the low 5% range on an absolute-triple-net basis, which includes both ground lease and fee simple sales. Meanwhile, Walmart Neighborhood Market hovers in the high 4% range with all transactions being ground leases with long-term leases.
This trend shows Walmart is trading at lower than average Central Florida cap rates for the 1st half of 2016, which was at 6.25% shown in the graph below. This is due to the fact that Walmart is considered a relatively safer investment. While South Florida and West Florida regions attract many investors due to the growth in Miami and Tampa, Central Florida is on its way to progress, especially with Walmart's new expansion and Orlando's growing attractions.
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Jonathan Hipp
Jonathan Hipp began his career in real estate over 25 years ago. In his early years as a broker, he ventured into the net lease industry and quickly began leading the US net lease market, closing over $3 billion in transactions. In 2005, Jon founded Calkain Companies, a company focused solely on net lease investment services. As President and CEO, he has been instrumental in building the firm into one of the leading Net Lease real estate companies, transacting over $12 billion of net lease deal volume over the past 13 years. He has expanded Calkain’s services to include brokerage, advisory, asset management, capital markets, and industry research. He has become a well-known resource, panelist, and speaker at various Net Lease and Industry conferences and is a regular contributor to GlobeSt.com on real estate trends. In June 2015, Jon’s passion for the real estate business was again recognized as he was nominated for the Top Real Estate Player in the DC area by SmartCEO magazine.
