Keyser Commercial Real Estate recently represented MLS Realty LLC in its sale of a 78,682-square-foot industrial property at 7885 North Glen Harbor Boulevard. The property traded for $15,600,000, which equates to a cap rate of 6.17% and a price per square foot of $198.27.
The building seller was represented exclusively by Keyser Partner Brian Uretzky, who leads Keyser’s Capital Markets Practice. Keyser Commercial Real Estate is an industry leading, global commercial real estate brokerage firm who fiercely protects and advocates on behalf of their clients
The low cap rate secured on this transaction was a significant achievement in a market experiencing a surge in industrial developments, and with the Fed Funds Rate at the time of execution at 5.25%.
“Over the past twelve months, buyers and sellers have struggled to find common ground on execution levels, especially within an industrial sector experiencing rising vacancy rates and elevated supply,” says Brian Uretzky. “Buyers are wary of this imbalance, as well as the overall negative publicity the commercial real estate sector has experienced emanating from banking sector challenges since the start of 2023.”
The transaction at Glen Harbor Boulevard at a low 6% cap rate is a notable success story. Accomplished through careful negotiation and strategic planning, it demonstrates the increased need for sound advice and an experienced brokerage team in the current volatile market environment.
In addition to the sale, the deal included a newly negotiated lease that satisfied the tenant’s requirements regarding a reasonable rental rate, free rent and building improvements. This element of the sale leaseback needed to be acceptable to the buyer as well, as a reliable tenant in place can provide a buffer against market volatility.
The final obstacle was negotiating roof and HVAC maintenance responsibilities that needed attention. “We had to navigate some tough negotiations between our client and the buyer, but ultimately found common ground allowing the transaction to proceed smoothly,” Uretzky explains.
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Looking ahead, Uretzky remains cautiously optimistic. “While we are seeing fluctuations in cap rates and vacancy rates, the fundamental demand for industrial space in the Valley remains strong. Additionally, the Fed now being more accommodating certainly helps as well,” Uretzky notes. “Deals like this clearly highlight the importance of being nimble, flexible and creative in negotiations.”
