A Clearwater, Florida, building that was once used by a defense contractor before being renovated and leased to the e-commerce giant Amazon as a small-scale distribution center has sold for $23 million, one of the priciest industrial sales in a year for the area.
Brokerage Stan Johnson Company said an unidentified New Jersey-based syndicator bought the 106,000-square-foot distribution facility at 13133 34th St. N. as part of a 1031 exchange, a federal program that allows a real estate investor to defer capital gains if they reinvest proceeds into a similar property in a short period of time.
Stan Johnson Company and brokerage Vaughan Commercial, which represented the seller, did not immediately respond to an inquiry from CoStar News for additional information.
The transaction price works out to almost $217 per square foot, well over the going rate for industrial stock in the South Pinellas market, which stands at about $89 per square foot, according to CoStar analytics. That makes the deal the most expensive industrial trade for the region since May 2020, ahead of Americold's $25 million sale-leaseback purchase of a facility on the easternmost fringes of Tampa in August. In terms of total dollar amount, it is the eighth biggest sale of the past 12 months.
South Pinellas, the largest industrial hub in Tampa, has traditionally been dominated by aerospace and defense tenants. The building at 13133 34th St. N. was constructed in 1980 and long occupied by one such business, Alliance Techsystem, now known as Orbital ATK.
Orbital ATK used the facility for the engineering and production of the AAR-47 Missile Warning System, which it describes as "a lightweight, combat-proven electronic warfare system designed to protect helicopters and fixed-wing aircraft from surface-to-air threats." In June 2016, the Dulles, Virginia-based defense contractor moved the facility to a Los Angeles enclave, Northridge.
Shortly thereafter, the dingy-but-highly functional building was offered for sale at $4.5 million, according to an old offering memorandum from real estate services firm Colliers. Pinellas County property records show that the property was purchased in January 2018 by a limited liability corporation, CMNY Clearwater 1, which paid $3.85 million for the building.
CoStar data show real estate owner and manager MoreSpace Management as the most recent owner of the property, which was renovated in 2019.
Amazon moved in around February 2020, after the property had gotten a major upgrade, followed by a tenant-build out that exceeded $7 million, as per Pinellas permit documents.
The price likely reflects Amazon's stature as a tenant and the building's own appeal.
“Amazon has very tight location requirements, sometimes even within a zip code,” said Craig Tomlinson, senior director and partner in Stan Johnson Company’s Tulsa, Oklahoma headquarters. “In urban areas like Tampa, adaptive reuse is more common for their delivery stations. Our client is getting not only the hallmark industrial tenant, but a very flexible property in a Class A submarket.”