Dallas-based Hillwood, the city’s master developer at AllianceFlorida at Cecil Commerce Center, is working toward a potential 300,000-square-foot freezer-cooler distribution center.
In its third-quarter report to the city Office of Economic Development, Hillwood said it received and responded to a preliminary inquiry from a company interested in buying about 30 acres for the project.
Hillwood did not identify the prospective buyer.
Cold-storage distribution centers are a growing business in Jacksonville.
In a column written for the Daily Record and published Oct. 18, 2022, CBRE First Vice President Ben Stewart wrote that cold-storage demand traditionally follows population growth and demographic changes.
“Recent migration patterns have generated more food and beverage demand in states like Florida, Arizona and Texas, resulting in the need for more cold storage capacity,” he wrote
“The pandemic’s impact on grocery sales expedited the shift from in-person shopping to online ordering and home delivery.”
He said that a CBRE report on cold storage demand found that e-commerce’s share of total U.S. grocery sales is expected to rise from 13% in 2021 to 21.5% in 2025.
The growth is pushing existing cold storage supply chains to the limit and spurring new development.
CBRE represents AllianceFlorida.
As the master developer, Hillwood is required to report its quarterly activity at AllianceFlorida to the city. It submitted its third-quarter report this week for July 1-Sept. 30, 2022.
Hillwood also said that it executed a purchase-and-sale agreement with a prospect interested in buying five to 10 acres for a retail facility.
Hillwood Executive Vice President Dan Tatsch said Dec. 29 that because of confidentiality provisions in the purchase and sale agreement, he could not provide any details beyond what is in the report.
More activity
In other activity during the third quarter, Hillwood told the city it:
• Continued to negotiate a purchase-and-sale agreement with a developer interested in buying 10-20 acres for distribution operations.
• Continued its discussions, which started in the second quarter, with a prospect interested in leasing about 300,000 square feet of distribution space.
• Received and responded to a preliminary inquiry from a broker representing a company interested in buying about 15 acres for a distribution facility.
Distribution space is one of the area’s hottest commodities, according to industrial market reports from real estate firms. Many companies are leasing warehouse space for e-commerce storage and delivery.
Vacancy is at 3.3% and lower in the Jacksonville market among industrial and warehouse buildings for lease.
Hillwood has developed about 3.225 million square feet at AllianceFlorida. That includes two 1 million-square-foot centers for internet retailer Amazon.com on about 86.5 acres and online home-furnishings company Wayfair on 80 acres.
In addition, the 300,000-square-foot FedEx Ground Package System Inc. facility, developed by SunCap Property Group LLC, also counts toward Hillwood’s development benchmarks with the city.
Hillwood’s deal
Hillwood and the former Jacksonville Economic Development Commission made a 25-year Master Disposition and Development Agreement in 2010 to develop Cecil Commerce Center.
That agreement was 10 years with three five-year renewal options. Hillwood is midway through the first renewal term that started in mid-September 2020.
The agreement calls for Hillwood to build-out AllianceFlorida on about 4,499 acres of city property, the former Naval Air Station Cecil Field, off Normandy Boulevard and 103rd Street in West Jacksonville.
It is designed for the city to share in the profits. As the master developer, Hillwood typically secures the tenant, buys the land from the city, develops the project and then sells the property to an investor.
The city receives 10% of the profit proceeds for industrial space and it will be 50% for mixed-use development.
No mixed-use deal has been done.
As for sales, among them Hillwood sold both of the million-square-foot completed structures.
