Innovo Sells Amazon-Leased, South Bronx Warehouse to CenterPoint for $119M
Property previously traded for $54 million in 2019
By Cathy Cunningham August 25, 2021 12:54 pm
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CenterPoint Properties has acquired 511 Barry Street from Innovo Property Group, the company announced Wednesday.
The South Bronx warehouse sold for $119 million in an off-market, all-cash deal, sources familiar with the deal told Commercial Observer — a 3 percent cap rate — having previously traded for $54 million only two years ago.
The deal marks CenterPoint’s second purchase in the Bronx. In May, it purchased a last-mile warehouse at 1080 Leggett Avenue — right next door to the Barry Street asset.
Amazon (AMZN) fully leases both of the Hunts Point assets, now giving CenterPoint a combined 9-acre distribution campus at the location, which is only 5 miles from Manhattan and amid New York City’s 8.5 million potential customers.
“Certainly, our goal was to acquire both buildings, so we’re thrilled to see our strategic plan come to fruition,” said PJ Charlton, senior vice president of investments at CenterPoint.
CBRE (CBRE)’s Doug Middleton, Brian Fiumara and Ryan Silber negotiated the sale on behalf of Innovo. JLL (JLL)’s Rob Kossar, Tyler Peck, Leslie Lanne and Andrew Scandalios represented CenterPoint.
“If you look at the map, and you look at the aerial view of the two sites, you can see that they’re meant to be together,” Kossar, who is vice chairman and market director of JLL’s northeast industrial group, told CO. “Plus, the tenant is the same in both assets so we always thought it would make really good sense to combine the two.”
The Barry Street property spans 4.6 acres, on which the building occupies 81,000 square feet, meaning there’s also plenty of room for parking and delivery vehicles.
“Parking and a premium location are essential in today’s competitive logistics environment, and those are unquestionably the hallmarks of this property,” Charlton added.
Innovo acquired 511 Barry Street in December 2019 from Baldor Specialty Foods, paying $54 million at the time, according to GlobeSt.com. Amazon announced its lease at the property in April of this year, “priming” the trade to reap considerable profit.
“Most industrial buildings in the South Bronx are anywhere from 60 to 100 years old and are functionally challenged with very little parking,” CenterPoint Investment Officer Mac Lee said. “511 Barry’s low coverage ratio, ample loading, and on-site parking capabilities make it stand out as an excellent quick throughput, urban delivery station in one of America’s fastest-growing, e-commerce logistics submarkets.”
The lease at 511 Barry Street is Amazon’s most recent in the Bronx, where it’s been snapping up space. In 2019, it leased 117,000 square feet at 1300 Viele Avenue; in June of last year, it leased 200,000 square feet along the Bronx River at Bruckner Boulevard; and, in August, it took a 366,000-square-foot asset at 1500 Bassett Avenue, according to welcome2thebronx.
With the pandemic only accelerating interest in industrial space, Kossar went on to say that demand on the occupier side also continues to be red-hot. His team is seeing “an incredible amount of diversity, meaning it’s not just one or two names that you’ve heard before — it’s broadening.”
Similarly, the square footage sought by prospective tenants also varies significantly today. “It’s not all the one-million-square-foot mega deals,” Kossar said. “The New York City market is really maturing in a way that’s exciting. On the e-commerce side, customers want packages delivered quickly, and I think the developers and occupiers have been really mindful in doing it the right way.”
CBRE officials declined to comment.
Cathy Cunningham can be reached at ccunningham@commercialobserver.com.
