The recent $17 million acquisition of a pair of East Naples multitenant industrial buildings fits well into the portfolio of purchaser Venture One, a Chicago-based real estate private equity firm.
“We specialize in industrial. It’s all we do. We’ve been doing it since 2000 really as a firm. We target infill locations that are tough to replicate at what we think is below replacement cost,” said Kyle Grant, vice president of Venture One’s Florida Region, based in Miami. ”Our strategy is to continue to operate this as it’s been operated and just own it.”
The buildings purchased have a total of 83,500 square feet on about 4 acres at 4120 Enterprise Ave., in the center of the industrial park area bordered by Airport-Pulling and Livingston roads in East Naples. The seller is Naples Industrial Estates LLC, based in Bonita Springs and registered to David and Neil Braverman. The property last sold in 1999 for $661,500 when it was still vacant land, and its industrial structures were built in 2000, according to Collier County property records.
The two buildings sold include 37 business tenants in about 45 units, but they are nearly fully leased because some tenants occupy more than one unit. “It’s close to 100%—I think 98%,” Grant said.
Venture One believes that the smaller tenants in these buildings cater well to the market. The diverse tenant mix includes local businesses from a woodworker to a custom clothier and from an event planner to a car wrap company, Grant said.
“It’s a mix of really everyone that you would expect,” he said. “It’s a good mix of tenants of a variety of sizes, as well as business uses. As far as anything that happens in Naples, I feel like it comes out of this two-building little park here.”
Perhaps best known as the former home of Naples Beach Brewery, the industrial buildings include tenants, such as Marco’s Cuban Cafe, Jabba Fine Foods, CrossFit Naples, Dan House Electric, Hoosier Plumbing, FrankenSigns, Gulfshore Cabinetry & Remodeling, Coastline Shutter Corp., Cover Up Designs, Eddie’s Pool Service, SunFlex Wall Systems, Tom Trovato Event Floral & Design and The Studio of Fine Furniture Finishing.
Both long, narrow buildings stretch from Enterprise Avenue to Exchange Avenue along Industrial Boulevard. Trucks and other vehicles can drive through the block-long property via two driveways.
“This one checked a lot of boxes for us. It’s a good quality building compared to the competition in the area. And it’s a good size for us too, where it justifies us taking a bet,” Grant said. “If you’re going to spend the dollars, to spend time to come over here and manage it the right way, you would want it to be at a price point, I think, that you can be rewarded for that.”
Venture One is excited about the opportunity to be a part of Naples and its affluent population base, Grant said. The Naples transaction is the company’s third in Florida with previous acquisitions in Clearwater and Orlando. Grant had been leading Venture One’s push into the Sunshine State before he relocated here from Chicago last March and formally opened the firm’s Miami office, which complements the firm’s home office in the Chicago suburb of Rosemont, Illinois, and another regional office in East Rutherford, New Jersey.
“Orlando was the first deal,” he said. “That was a land site we are developing, building a 220,000-square-foot building that we’re actually just ramping up now on. Then, we bought an existing building in Clearwater that was a sale-leaseback with one tenant. And now this is our third transaction. We have a few other things that we have tied up, but this is the third thing we’ve closed on.”
The deal this month was brokered by Justin Thibaut and Alexis North of Fort Myers-based LSI Companies, which opened a Naples office in November. “This represents one of the largest multitenant industrial facilities in Collier County changing hands for the first time since construction in 2000,” LSI reports.
Could this be the regional industrial deal of the year?
“It’s early in the year,” said Thibaut, president and CEO of LSI. “Let’s call it the deal of the month.”
Thibaut said the transaction is significant because not a lot of room exists in the local market for new industrial parks.
“I see Venture One as a buyer who can really capitalize on the market dynamics,” he said. “I think well-capitalized buyers that are strategic and long-term focused, like Venture One, are going to be the winners in today’s market.”
Venture One targets industrial acquisitions typically ranging from $2 million to $150 million through its fund platform, as well as ground-up development. The firm seeks other properties in the Naples-Fort Myers area and throughout most of Florida.
“We’re looking to hopefully be the first of many and continue to grow the portfolio. We like the long-term fundamentals of Naples,” Grant said.