In the healthy Miami-Dade County industrial real estate market rife with transactions, the $18.8 million sale of a warehouse might not seem notable. But wait until you hear more about the facility.
The indoor space at the 231,686-square-foot warehouse at 18770 NE Sixth Ave. in North Miami-Dade has been kept frozen for the past 40 years, including during and immediately after hurricanes.
“It is a unique thing,” said Dan McCawley, one of the attorneys who closed the deal. He said generators kept the space frosty after hurricanes and other power outages.
Southeast Frozen Foods Co. LP, a distributor of frozen and refrigerated foods, sold the facility to 18770 Miami LLC and then leased back 73,000 square feet, or about a third, where Southeast Frozen Foods will keep its headquarters.
McCawley and Stephen Katz, both Greenberg Traurig shareholders, and associate Stephanie Stein, all based in Fort Lauderdale, closed the deal Nov. 9 for Southeast Frozen Foods.
The transaction ended a sale initiative by Southeast Frozen Foods as it previously sold four of its other properties in Georgia, Louisiana, South Carolina and Virginia.
The sale of these four properties and the trade of the Miami-Dade one are all sale-leasebacks, although the local deal is slightly different because Southeast Frozen Foods only leased back part of the building.
“You had to have a buyer that could come in and reposition the rest of the space because they didn’t have a fixed long-term lease for all the rest of the space,” McCawley said.
Generally, buyers and lenders prefer assets with secured long-term leases but in this case 18770 Miami LLC has to find its own tenants to fill the space Southeast Frozen Foods left empty. It’s been negotiating with potential tenants who also will use the warehouse for cold storage as there’s a demand for this type of facilities here, McCawley and Katz said.
Also complicating the deal is that Southeast Frozen Foods is an employee-owned company requiring the employees to vote in approval of the trade.
Katz handled the structuring of the entire portfolio Southeast Frozen Foods sold this year.
“I had worked with Dan on strategies and background on Southeast Frozen Foods for the Miami transaction. Then, I handed it off and Dan did the majority of all the contracting and negotiating,” Katz said.
Southeast Frozen Foods embarked on the five-building sale-leaseback in 2018 as part of its larger recapitalization plan.
“It was a recapitalization of the equity that they had accumulated in their real estate over the course of time,” Katz said, adding that the freed up capital will pay off debt and might also fund capital growth and operations.
Greenberg Traurig has represented Southeast Frozen Foods for more than 10 years, although various attorneys from other firms also have been involved.