Meridian Development Group sold Meridian Distribution Center to Toronto-based investment firm Agellan Capital Partners, Inc. for $51 million.
The 907,237 square foot Sarasota warehouse sits on 50 acres and is fully occupied by four tenants. United Natural Foods International occupies 460,000 sf of dry and refrigerated space. Bealls leases 200,000 sf and Access USA leases 163,000 sf. Albert's Organics occupies 80,000 sf of cooler/freezer space.
Meridian Management Group, a part of the Meridian corporation, has managed the property since the 2006 acquisition and will continue to serve as property manager under the new ownership.
A Decade in the Making
Meridian acquired the property for $30 million in 2006. At the time, it was the largest bulk distribution warehouse in the state and had been empty for years after Winn Dixie vacated. Steven Kossoff, Meridian managing director, said potential tenants were lost to other cities long thought to offer stronger logistical advantages.
Meridian commissioned an independent logistics study which discovered that from a distribution standpoint, Sarasota serves 87 percent of the state's population within one day's drive, compared to 60 percent from Orlando.
"This, combined with the proximity of international ports and the I-75 corridor, presented a significant transportation advantage at a time when fuel costs were soaring," said Steven Kossoff, Meridian managing director.
Meridian invested $10 million in interior and exterior improvements in the first year and worked with the Sarasota Economic Development Council to secure tenant incentives attractive to out-of-area companies.
Meridian began to fill the vacant warehouse. During the worst of the recession, the focus was on retention. The company renewed and expanded leases, and continued to facilitate new jobs. The area, hit with a loss of 300 jobs when Winn Dixie vacated, saw approximately 550 new jobs resulting from the tenants Meridian brought to the warehouse.
In 2009, Meridian developed a two-story 55,000 sf charter school for Imagine Schools on a four-acre corner of the property and later sold it in early 2016 for $10.2 million.
"We held on to this asset longer than we usually do," said Kossoff, who typically looks to improve, lease up and sell within three to five years of acquisition. "The recession made a longer ownership term the right choice for this project. It's been a decade in the making. Patience paid off and we are pleased with the outcome."
Meridian plans to acquire three million SF of additional assets from Raleigh to south Florida in the next three to five years.
Kevin Heiss of Largo Real Estate Advisors assisted Meridian in the sale of Meridian Distribution Center.