An Atlanta-based industrial developer is planning to develop the former site of a women’s prison into a 750,000-square-foot industrial warehouse facility at the western edge of Pembroke Pines.
The 66-acre city-owned site, purchased from the state of Florida in June 2014 for $13.5 million, needs to be rezoned before the developer can make any detailed plans for the project.
In late August, the Pembroke Pines planning and zoning board approved a change from the county-designated PUD (planned unit development) to PID (planned industrial development), a city designation. A second reading is expected at the end of September.
The city plans to sell the 66-acre site to Core5 Industrial Partners for a proposed price of $14.25 million. After expenses, Pembroke Pines stands to have a net gain of about $208,000. This deal follows a purchase agreement with industrial developer IDI, which requested termination of the agreement on July 21 of this year.
The former Broward Correctional Institution, located on Sheridan Street, is a stone’s throw from the Everglades. Michael Silver, first vice president at CBRE’s Miami office said Core5 will probably inventory the land until the market actually needs more industrial space.
With industrial space in Miami-Dade and Broward becoming scarce, major industrial developers are looking to buy land for the future, because if they don’t buy now, “they are out of the game. The land may not be available in a few years,” Silver told The Real Deal.
In Miami-Dade County, the most desirable industrial land is in Airport West, but there is little land left in that submarket after more than 20 years of development, he said. Although Medley and Hialeah Gardens aren’t as close to Miami International Airport, they have become more desirable in recent years as other, more well-located properties have been developed.
The Medley and Hialeah Gardens’ properties are also relatively well-located with respect to Port Everglades, Silver said. Even though they are in Miami-Dade, because they are east of the Florida Turnpike, they are actually closer to Port Everglades and the Fort Lauderdale/Hollywood International Airport than the site near Sheridan and US 27, he says.
Still, Silver said there are some advantages to being in an industrial park located as far west as US 27 and Sheridan Street. For example, at the 300-acre Bergeron Park of Commerce and Industry, an industrial park just east of the prison site, such tenants that would not ordinarily be allowed in more close-in urban settings, are welcome. Among those “NIMBY” or high-intensity uses are butane or propane manufacturing or storage, outdoor equipment storage and gun ranges.
One of the other reasons that the 32-year-old Bergeron industrial park is attracting tenants, said Lonnie Bergeron, a principal with the family owned park, is that there is a lot less industrial land available now than 20 to 30 years ago in South Florida. The Bergeron Park of Commerce and Industry is roughly 60 percent built out, he said.
Bergeron does not view his industrial park’s location as a liability. “We moved out here because of the large land supply,” he said. Today, the park is centrally located because tenants can easily connect with all major highways in the area, including I-75, the Florida Turnpike, and I-595, said Bergeron.
The Bergeron Distribution Center at the Bergeron Park of Commerce and Industry is about to break ground in the next couple of weeks. “The market has come out to meet us,” he told TRD. Bergeron said that he isn’t concerned about competition from a Core5 industrial park, which may not be built for two or three years. “Unlike large, industrial developers, we don’t cater to really big users that need 250,000 square foot boxes; we tend to have flexibility and more space for smaller businesses,” he said.
Bergeron is very familiar with the prison site; his company was only one of two bidders for the site when the state put it up for sale a couple of years ago. While the city of Pembroke Pines paid over $13 million for the property, that was about $4 million more than Bergeron wanted to pay, he said.
The demand for Broward County industrial land is quite strong, Quinn Eddins, CBRE’s director of research and analysis for the state of Florida, said.
“Lonnie Bergeron isn’t exaggerating when he says that there is demand for industrial land,” he said. The average asking rate for all industrial space in southwest Broward is $8.01 per square foot, and the parks in western Broward are not charging less than parks in closer-in locations, Eddins said.