Palladius Capital Management Provides $15M Acquisition Loan on Jacksonville Warehouse
The infill industrial property was formerly owned by Revlon
By Brian Pascus July 21, 2023 1:14 pm
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Mayfair Investment Partners has closed on a $14.8 million first-mortgage loan to acquire and renovate a nearly 340,000-square-foot industrial property formerly owned by Revlon in the Jacksonville, Fla., submarket.
Palladius Capital Management, a real estate investment firm headquartered in Austin, arranged the fixed-rate loan. Parts of the $14.8 million loan are expected to fund the purchase, while additional capital will be made available to rehabilitate and modernize the property, according to Manish Shah, senior managing director at Palladius.
Palladius worked with the sponsor for six months as Revlon went through a financial restructuring and Shah called the level of patience his firm showed on the deal “fairly unusual” in the commercial real estate lending space.
“The seller went through bankruptcy, it was a well-known company, they had gone through a financial restructuring, which made it more challenging for the sponsor to get information and get activity just in terms of making progress,” Shah explained. “But we stuck with the buyer and sponsor and were able to provide a strong and fair execution for both parties.”
Revlon filed for bankruptcy in June 2022. The 91-year-old cosmetics firm had argued in court filings that its $3.5 billion debt and pandemic related distributions challenges had impacted its ability to pay suppliers, according to Reuters.
Located at 2210 Melson Avenue about 15 minutes outside Downtown Jacksonville, the 22-acre industrial property had been used as a cosmetics distribution center for Revlon prior to the firm’s bankruptcy. Originally built in 1963, the property added additional phases of construction during the 1960s.
Today 2210 Melson Avenue holds 30 on-site loading docks, and includes outdoor storage and on-site parking. The site is capable of handling third-party logistics, distribution, fleet tenants and warehousing of goods and sits off I-295, I-10, and I-95.
The property is an infill industrial space, which provides last-mile delivery of e-commerce as opposed to the larger Amazon (AMZN) fulfillment center-type distribution hubs that serve wider metropolitan regions. For instance, many local car dealerships do not hold the cars that are purchased on location but ship them to buyers from last-mile industrial delivery locations nearby.
Shah described infill industrial as an asset class that many sponsors are seeking and one that has proven resilient in the recent capital markets upheavals.
“Last-mile industrial has continued to stay strong and resilient because you didn’t have overbuilding,” Shah explained. “It’s in-fill, so by definition, you don’t have lots of space to build new – and you have a repurposing of older assets, typically upgrading them or dividing them into smaller units, and that’s what’s going to happen here.”
Mayfair Investment Partners is a Miami-based real estate owner and operator. Founded by Jonathan More in 2013, Mayfair Investment Partners currently targets deals between $5 million and $50 million with a geographic focus in Texas, New York, and the Old South.
Brian Pascus can be reached at bpascus@commercialobserver.com
