6-Building Technology Center for Sale in South Florida

Thursday, November 10, 2016

Holliday Fenoglio Fowler, L.P. (HFF), on behalf of the owner, is marketing for sale Lyons Technology Center, an institutional-quality light industrial portfolio comprising six buildings totaling 232,887 leasable square feet in Lyons Technology Park in Coconut Creek, Florida.

Lyons Technology Center has an extremely diverse tenant roster with 14 of the 20 NAICS (North American Industry Classification System) codes represented. This tenant composition limits downside risk by not overexposing the income to any specific industry. Additionally, 60 percent of the rent roll comprises spaces that are 2,300 square feet or less, providing for a varied rollover profile.

The two largest tenants at Lyons Technology Center, Motionpoint and SCI, total 84,500 square feet (36 percent of the total square footage) and have been consistently expanding at the center since 2002 and 2004, respectively. Lyons Technology Center offers tenants the flexibility to expand as their businesses grow, thereby creating significant tenant loyalty.

The technology center for sale is situated off Lyons Road one block east of State Road 7 and one block south of Hillsboro Boulevard. The property has excellent access to the Sawgrass Expressway, which is connected to Florida’s Turnpike and Interstate 95. This location serves both Broward and Palm Beach County, and both the Broward and Palm Beach industrial markets are performing exceptionally well, with vacancy rates below five percent in both markets. The 1.1 million-square-foot micro-market surrounding Lyons Technology Park has not risen above five percent vacancy in the last six years. High occupancy combined with little new construction or deliveries lends itself to a significant mark to market rent growth opportunity.

One of the biggest drivers of industrial demand is population growth, and Broward County has shown incredible growth; over the past six years, Broward has experienced a 5.78 percent compounded annual growth rate and currently stands at a little more than 1.8 million residents. The Broward County industrial market benefits from the tourism market, which includes Port Everglades, the third largest cruise port in the world, as well as Ft. Lauderdale International Airport, which is ranked 14th in the nation for passenger traffic. Port Everglades is ranked as the 11th leading container port in the United States, and, with, more than one million TEUs annually, it is a major access point for goods entering South Florida.

Industrial Portfolio for Sale Investment Benefits

  • Low Tenant Improvement Costs:  The demand at the commercial property for sale is such that leases are negotiated with little or no tenant improvement cost for the landlord. An analysis of current leases revealed an average tenant improvement cost of $1.77 per square foot on new leases for office space, $0.15 per square foot for new light industrial with air-conditioning space and $0.06 per square foot for new light industrial space without air-conditioning. Most tenant spaces were accepted by the tenants “as is,” with no tenant improvement contribution by the landlord. These minimal tenant improvement outlays boost investor’s cash-on-cash returns by minimizing the “below the line” costs typical of other higher office-finish product.
  • Positioned Well Against Multi-Story Office:  Single-story office product is positioned to compete against multi-story office product that has a common area. The lack of a common area increases the usable square footage of a tenant’s space by roughly 15 percent and brings their occupancy costs down. Single-story office also has higher visibility, greater walk-up accessibility and a better parking proximity.
  • Affluent and Dense Trade Area:  Lyons Technology Center is situated in one of the most affluent trade areas in South Florida. Many of the proprietors and CEOs of the tenant companies reside within close proximity to the industrial property for sale. The center is located in northern Coconut Creek and surrounded by the communities of Parkland and Boca Raton, which have average household incomes of $146,290 and $108,277, respectively. The highly-educated population (36 percent have a bachelor’s degree or higher) experienced nearly 21 percent growth from 2010 to 2016.
  • Infill Location:  Developable industrial land is non-existent in the immediate area. What vacant land is available has shifted to multi-family use, and, several new apartment complexes are under construction and others have been delivered recently. With no new supply to compete against Lyons Technology Center, effective rental rates should continue their positive upward trend.

Lyons Technology Center is a six-building, light industrial center that is for sale in an infill location and affluent, dense trade area in South Florida. The building is well positioned against neighboring multi-story office buildings, has a diverse tenant roster and low tenant improvement costs. For more information on this or other industrial properties for sale in the South Florida area, please contact HFF Director Marty Busekrus, Associate Director Jorge Portela and Executive Managing Director Manny De Zárraga in HFF’s Miami office.

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