A Tamarac-based investment company has been growing its industrial portfolio in the tight Palm Beach County market, buying a portfolio of five small buildings with Cushman & Wakefield’s help.
Genet Property Group bought the four-building Fairfax Industrial Park at 1700 Avenue L and a building at 7150 Devon Rd. in Riviera Beach for $12 million from The Silverman Group, a family-owned private equity and development company based in Basking Ridge, New Jersey.
“The West Palm Beach as well as the Palm Beach County industrial market are experiencing 97 plus percent occupancy. The market is extremely tight,” said Scott O’Donnell, a Cushman & Wakefield executive director who worked on the deal that closed Dec. 20 at $81 per square foot.
O’Donnell worked with senior associate Greg Miller, managing director Dominic Montazemi and CBRE Inc. executive vice president Robert Smith, all based in Boca Raton.
Separately, Cushman & Wakefield senior director Jason Hochman, also in Boca Raton, secured $6 million in financing from Aegon Real Assets US for the Fairfax Industrial Park buy. This is a 10-year fixed-rate loan.
“Genet Property Group, led by Ben Genet, has specifically targeted West Palm Beach as one of the areas where he is looking to grow a portfolio,” O’Donnell said. “But he has a portfolio of several million square feet of industrial across all of South Florida, all the way south as far as Kendall.”
Some of Genet’s other holdings are the McNab Commercial Center in North Lauderdale, Davie 51 and Davie Too, according to its website.
A healthy economy, job growth and e-commerce are driving industrial demand in Palm Beach County.
Much of the area’s new construction is devoted to larger buildings rather than the small-bay structures that recently traded, Hochman said.
The four Fairfax buildings have a combined 125,400 square feet on five acres, and the average space per tenant is 6,270 square feet. The warehouse at 7150 Devons Rd. is 21,800 square feet on 2.3 acres, but the average size per tenant is 1,650 square feet.
Building small is more expensive, Hochman said.
“When you have a bigger tenant building, you need only one wall for every 20,000 or 50,000-square-foot tenant,” he said. “In this case, you need to divide every single 2,000-square-foot tenant. Every one of those needs a bathroom.”
O’Donnell, Miller and Montazemi were on a team that brokered the $50 million sale of a 916,000-square-foot portfolio, including the five buildings, across Palm Beach County to The Silverman Group in 2016.
As a value-add investor, Silverman improved the properties and has been selling some of them.
“They increased the rents across the portfolio, putting tenants on long-term leases as opposed to the month-to-month and one-year leases that were in place when they purchased the property,” O’Donnell said.