Tampa-based Meridian Companies is just about ready for its first tenants at Meridian Business Center, the 948,000-square-foot warehouse it acquired from Winn-Dixie in January.
The $30 million warehouse near Clark and McIntosh roads is the largest building sold in the Sarasota-Tampa Bay area in more than a decade, and its size makes it easier for the county to attract new mid-size businesses, says Kathy Baylis, president of the Economic Development Corporation of Sarasota County.
"It's something we've needed for several years," says Baylis, who introduced company president Steve Kossoff to county officials and other local players to help smooth the deal. No tax dollars were involved in the sale, Baylis says. County officials helped with the site plan and are actively helping to secure tenants. "In the last eight months alone, I've had three calls from companies looking for 100,000 square feet of space," says Baylis. "And we just didn't have the product. Now we'll have the product."
Meridian, with Hudson Realty Capital of Manhattan, is redeveloping the warehouse to accommodate four to six tenants, with each leasing a minimum of 100,000 square feet. Leasing rates will be $4.75 per square foot annually.
"The corridor between Naples and Tampa is one of the fastest growing areas in the state," says Kossoff. "The lack of available and properly zoned land made this investment very attractive."
The property is close to I-75 and has on-site CSX rail service, 200,000 square feet of freezer space and 111 truck docks. Meridian is spending $2.5 million to upgrade the facilities, including mechanical and electrical improvements, painting and cosmetics.
On a vacant 29-acre parcel of land at the front of the property, Meridian plans to build 50 to 60 office condos-the first the company has ever built. A new trend in commercial real estate, office condos allow businesses to purchase their space in the same way people buy a condominium.
"Businesses can pay rent for 20 years and have nothing to show for it," Kossoff says, adding that they're particularly attractive as property values rise.
The condos will sell for about $250 per square foot and add another 150,000 square feet of space to the property. Groundbreaking is scheduled for June, with completion in October.
"It's great for small users-medical, legal, accounting," says Kossoff.
Kossoff says negotiations are under way with several potential tenants, and the warehouse may have its first business in the coming weeks. He declined to say which companies may locate there.
Meridian Companies, a real estate acquisition and development company started in 2000 in Buffalo, N.Y., moved to Tampa in January 2005 and now owns and manages almost 2 million square feet of warehouses valued at more than $50 million, according to the company. It maintains a satellite office in Buffalo.
The company's first Florida acquisition was the 170,000-square-foot Lakeland Interstate Business Park.
Manhattan-based Hudson Realty Capital is a fund manager with approximately $400 million of origination capability.