Change In Owners Opens Up Trade Zone Speculation
By Marilyn Bowden
A good economy and a prime location could result in new construction at Miami Free Zone, observers say.
The 47-acre, 836,000-square-foot industrial park at Northwest 25th Street and 107th Avenue in the newly incorporated City of Doral quietly sold in April for more than $76.17 million to Cargo Ventures, a New York-based real estate investment company. Executives at Cargo Ventures declined to comment on the deal or their plans for the property, but local industrial market experts say the price — a significant hike from its last sale price of about $46 million just two year ago — might be justified by new development on several acres of vacant land within the complex.
Seller Pantheon Properties, which bought the property in May 2004 in partnership with the Canyon Johnson Urban Fund, a Los Angeles-based real estate fund focused on inner-city and urban real estate investment, announced in a media advisory that it will continue to operate the foreign trade zone activities at the Miami Free Zone.
The park’s free-zone status allows tenants to store and manage inventory coming directly from the area’s air or seaports without paying US tariffs unless and until they are distributed within the US.
The sale to Cargo Ventures calls into question the status of the former owner’s development plans at the site. Pantheon won approval from Miami-Dade County commissioners last year to rework zoning at the property, the first step toward construction of a proposed $200 million hotel and trade hub.
What Cargo Ventures paid for the property — $91 a square foot — is "a big price," said Jose Juncadella, principal of Fairchild Partners who was with The Codina Group when Codina and partner Prudential sold the Miami Free Zone to Pantheon and Canyon Johnson in 2004.
"The buildings have a lot of obsolescence," Mr. Juncadella said, "but the property also has frontage on 107th Avenue and potentially surplus land. So from a development standpoint, that could be a prime site for major office or retail construction."
Under the ownership of Pantheon and Canyon Johnson, occupancy at the park shot from 60% to 90%, said Jay Ziv, a broker at Colliers Abood Wood-Fay who represented Pantheon in the 2004 sale transaction and stayed on board to assist management in leasing. He said that also affects the sales price.
"We grew and expanded some of the space there for companies like Bulgari; Richemont, whose brands include Cartier and Montblanc; some tobacco industry tenants and others," Mr. Ziv said. "They were all companies that need the free trade zone environment, either for the way in which the merchandise is handled or because of the 24-hour security it offers.
"One of the main things the operators were wise enough to do was bring US Customs to the facility, and that added a great deal of value."