Spring Holdings Realty is taking advantage of the down market to pick up strategic real estate assets. The firm just snapped up a 58,811-square-foot showroom that will become the new headquarters for Spring Footwear.
CBRE represented Spring Holdings in the transaction. Stiles represented the seller. Financial terms of the deal were not disclosed.
Located at 1001 West McNab Road, the building was once home to City Furniture. The freestanding building offers visibility from Interstate 95.
“Spring Footwear was leasing 34,000 square feet and the ownership decided that they wanted to buy,” said CBRE’s Allen Lindow. “The majority of small to mid-sized companies that are controlled individually by high-net worth individuals prefer to buy so they can control their own destiny. Even though the buy versus lease scenario offered an advantage to leasing, Spring decided to make the acquisition.”
Spring Footwear is expanding and relocating from another location in Pompano Beach. The new buyers will allocate a significant amount of capital towards retrofitting the former furniture showroom to serve as a distribution facility with offices and a non-retail showroom. The facility became available after City Furniture’s consolidation and relocation to Boca Raton in early 2011.
“The other two properties we considered were priced somewhat in the same range, but they were more traditional distribution buildings in in-fill areas whereas this was more of a showroom with good exposure,” Lindow says. “You would think they would pay more for this building for those reasons but they didn’t. Because of market conditions we were able to buy it at the same price.”
According to CBRE’s MarketView for the Broward industrial market, the Pompano Beach submarket had the highest vacancy rate among the Broward County submarkets at the end of the third quarter. At over 10% vacancy compared to the Broward market’s 8.7% overall average, available space in Pompano Beach will continue to offer favorable pricing.
“Market conditions in the Broward Industrial market are not improving as quickly as some sellers would like,” says Lindow. “Patience and persistence are qualities high net worth individuals bring to the negotiating table, and in this case, it helped us get a good deal at below replacement cost. There is still plenty of inventory for sale in Pompano, including some within the ‘distressed’ category, that needs to be absorbed before we see any kind of market equilibrium.”
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