New Jersey-based real estate investor Faropoint paid $8.325 million for an EastPark Business Center warehouse recently leased to the U.S. Navy, said Colliers Senior Director Eric Bumgarner.
The 65,806-square-foot structure was built in 1984 on about 6 acres at 11660 Central Parkway.
Bumgarner said Jan. 3 the sale by Jacksonville-based Murali Holdings LLC to Faropoint closed Dec. 27. Property records show Murali paid $2 million for the property in 2013.
Faropoint, based in Hoboken, invests in industrial properties.
Vice President and Florida Market Leader Yannai Gordon said Jan. 3 the Central Parkway property is in the growing Southside, where there are low industrial vacancy rates and a good number of buildings.
“We see this as being our opportunity to put our flag in a very dense area of Jacksonville,” Gordon said.
He said Faropoint bought a 24,000-square-foot building in West Jacksonville in April and has a contract on a fully leased 100,000-square-foot industrial property along Philips Highway.
“We invest across the risk spectrum,” he said.
Faropoint looks for buildings of 20,000 to 300,000 square feet in size developed from the mid-1950s to the early 2000s.
Gordon said Faropoint acquired $730 million in properties in 2021, comprising 148 buildings and nearly 9 million square feet of space in 85 transactions.
“Florida is our newest market,” he said. Faropoint targets Jacksonville, Orlando, Tampa and Miami.
Gordon said he recently moved to Miami.
Gordon heads the firm’s acquisitions and asset management across Florida and led the transaction.
“This asset, off of Central Parkway, is incredibly functional with 26’ clear height, seven dock doors, and is well-situated in one of the tightest industrial pockets in the county with strong access to Interstate 95, downtown Jacksonville, the beaches, and the southern corridor where the local population is migrating,” he said in a statement.
“This pocket is benefiting from the overall positive industrial trends of low vacancies and high rent growth, and we expect those trends to persist in the coming years.”
He said Faropoint was “pleased to welcome the U.S. Navy into our portfolio of tenants and look forward to expanding our presence in Jacksonville throughout 2022.”
Bumgarner represented the property seller. NAI Hallmark’s Daniel Burkhardt, senior vice president of investment sales, and Jason Purdy, vice president and industrial specialist, represented Faropoint.
The U.S. Navy is renovating the structure for a MMSC — Multi-Mission Surface Combatant— vocational and training facility.
The city issued a permit Dec. 14 for Brantley Construction Co. to renovate the building at a cost of $10.7 million. That followed a permit June 17 for Brantley to prepare 50,000 share feet of shell space of the building at a cost of $300,000.
Permits indicate the total cost from shell to tenant use will be almost $16.4 million.
The Navy said June 7 the location will be used to provide training facilities and administrative space for electronic ship operator and maintenance training to about 300 military students as part of a U.S. Foreign Military Sales case.
It said it chose the location because it was large enough to provide the required office space to accommodate the Multi-Mission Surface Combatant training mission and associated administrative spaces.
The facility will provide MMSC ship-specific training courses, as well as high-fidelity simulators and virtual reality training devices to prepare crew members, watch teams and shore support personnel to operate and maintain the ships.
Bumgarner said June 1 the construction time frame is about 320 days.
He said the owner of the Store51 bedding e-commerce site owns the property and decided to rent a separate office and provide his distribution through a third-party logistics provider.
Bumgarner listed the property for sale as an investment with the U.S. Navy as a tenant. He said Jan. 3 the U.S. Navy had to approve the buyer as its landlord.
“There was a lot of vetting out that had to be done. Not just any buyer could be approved,” he said.
Bumgarner said Murali received a number of offers. “Faropoint was the strongest.”
He said the seller had the property on the market for $5.7 million for the first half of 2020, and then negotiated the Navy lease into January 2021.
Those terms are not disclosed.
He said the lease started March 1, 2021, and construction should be completed by May or later.
Faropoint said it is active in Dallas, Atlanta, the New York metropolitan area, Philadelphia, Chicago, Miami, Tampa, Jacksonville, San Antonio, Memphis, Cincinnati, Houston and Columbus, and continues to expand its national footprint.
Faropoint reported Dec. 22 it acquired a 10-building portfolio throughout Northern New Jersey from Kushner Companies for $132.5 million, as part of its continued national expansion.
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