Evergreen Pays Big Bucks for St. Pete Industrial Portfolio

Rick Brugge, Senior Director, Cushman & Wakefield Inc.

By Barbra Murray, Contributing Editor

Acting on behalf of the Fleeman Family Trust, commercial real estate services firm Cushman & Wakefield Inc. has sold an approximately 1.7 million-square-foot industrial portfolio in St. Petersburg, Fla., to Evergreen Industrial Properties for a whopping $103 million. The transaction marks the largest industrial trade — in volume and price — in the Pinellas, Tampa and Lakeland markets in six quarters.

Investors were eager to get their hands on the five-property collection. “Industrial is very much a favored class in St. Petersburg, and it’s hard to aggregate industrial. In other words, there are a lot fewer big portfolios that get sold, so there was certainly strong interest,” Rick Brugge, senior director with C&W, told Commercial Property Executive. Brugge worked with C&W executive director Mike Davis and senior director Michael Lerner on the transaction.

The Fleeman portfolio sits within the Gateway and South Pinellas submarkets and consists of Gateway Business Center, Gateway Business Park, Metropointe Commerce Park, Westbay Corporate Center and Joe’s Creek Industrial Park. Encompassing a total of 34 buildings featuring the majority of the Class A space Pinellas has to offer, the group of assets is 84 percent leased to a long roster of tenants that includes the likes of Lockheed Martin, L-3 Communications and FedEx.

“This portfolio was varied in its product quality; the best stuff in the portfolio is clearly superior to its competitors, and it gives the owner a really dominant market position,” Brugge noted. Dominant, indeed. The transaction has made Evergreen the largest owner of industrial real estate in Pinellas County. It’s a good position to be in, given the current state of the market.

In the second quarter, the average industrial vacancy rate in Pinellas County was just 5.7 percent, and there was nary a new delivery or construction project in sight, according to a C&W report. “St. Petersburg is a very high-barrier-to-entry market, it is very land constrained, and Pinellas County is the most densely populated county in Florida,” Brugge said. And the drivers are plentiful. “There’s local distribution. There’s a very strong manufacturing base in Pinellas County, particularly with the defense contractors and medical technology companies, some of which you see across the portfolio we sold,” he added. “And Pinellas County is a very entrepreneurial environment.”

And, per the report, C&W anticipates further improvement in the Pinellas County industrial market for the remainder of the year.