2240 NW 22nd

Pompano Beach, FL

Executive Summary

10890 NW S River Dr

2240 NW 22nd is a 1.2 acre site in the Pompano Beach submarket of Fort Lauderdale. Triten was awarded the deal for $3.2m ($2.67m/ac) in a lightly marketed process. The Seller, Hertz Realty Group, bought the site vacant, leased it, and is now flipping out of their investment.

The site is currently leased to Star CDL Academy, a truck driving school, through June '25 (2.7 years WALT). Rent is $14.6k/ac or a 6.5% yield on purchase price. Like the rest of South Florida, rents have grown quickly in Pompano Beach. Asking rents surged from $12k/ac in 22Q1 to $16-17k/ac today. The high watermark for signed leases is currently $18k/ac. Triten is underwriting a market rent of $16.5k/ac upon re-lease in Q3 2025. Competition for sites in the area is fierce and complicated by recent changes to the zoning code. The City of Pompano Beach is pushing strict compliance with new landscaping ordinances that are preventing other sites from leasing without significant capital expenditures. Most sites do not meet the new requirements, are subjected to site plan review, and lose 10-15% of usable area. The Subject Property, however, is in full compliance with landscaping ordinances.

The site is well located within Pompano Beach--right off Powerline Road, the primary N-S corridor through the submarket. Further, the site is less than 1.5 miles from both I-95 and Florida's Turnpike, both major freight lanes. West Copans Road is less than a half mile away, and is the primary E-W thoroughfare through this industrial pocket. As shown in the map below, the site is right in the heart of dense industrial pocket replete with trucking users drawn to the ideal highway access. The most recent development, just south of the site, was bought as raw land for $2M/acre almost 18 months ago. At $2.6M/acre Triten believes this basis and yield to be attractive for the portfolio.

Click arrow in top left corner to see major user list

Within the roughly four square mile area above, you can find Amazon, FedEx, UPS, major LTL users, major truck and equipment rental users, and tons of building supply users. This heavy concentration of major companies supports a dense local population (45k pop. within 2 miles; 344k within 5 miles).

Broward County Industrial Market Overview

 Market Info is from Newmark Q2 2022 South Florida Industrial Insight 

Broward County's industrial segment continued to lead the longest streak of consecutive quarterly demand growth throughout the state of Florida. Vacancy continued to decrease despite the high number of deliveries in the second quarter of 2022. Broward County reflects the overall industrial market in Florida as a whole, as demand continues to rise despite increased development activity, resulting in high absorption and rising asking rates across the board.

  • Total Inventory: 98.64M s.f.
  • Q2 net absorption kept pace with Q1, increasing the YTD absorption up to 1.5M s.f.
  • Vacancy kept its negative trend in Q2, finishing at 3.7%The average asking rate for Warehouse/Distribution facilities was $10.28
  • ~1.54M s.f. of industrial currently under construction

Submarket Overview

 Market Info is from Newmark Q2 2022 South Florida Industrial Insight 

2240 NW 22nd is in the Pompano Beach submarket of Broward County.

  • Total Inventory: 24.2M s.f.
  • Q2 net absorption was ~81.4K s.f., increasing the 2022 YTD net absorption to 366K s.f.
  • Vacancy rate: 4.2%  
  • Average asking rate: $10.03 p.s.f. NNN
  • ~485K s.f. of industrial under construction

The Pompano Beach sub-market is shown in grey above on the eastern side

Property Overview

Replacement Cost

Note, Discount to RP (Exit) does not account for land price appreciation.

Zoning

Zoning is controlled by the city of Pompano Beach, FL. The property is zoned I-1, General Industrial. The following are uses by right:

  • Truck/Freight Terminals (this includes the storage of trucks)
  • Truck Repair/Maintenance Facilities
  • Parking as a principal use
  • Warehousing/Storage/Distribution Facilities
  • Outdoor Storage as a principal use requires a SUP
    •  This is targeted narrowly to apply to the storage of boats, cars, merchandise, material, and finished goods 

Below is a zoning map of Pompano Beach, FL. Industrial zones are colored purple and the subject property is marked by a star.

Industrial Zones shown in purple

Financial Analysis

Sources and Uses

Financial Summary and Return Analysis

Exit Cap Rate Sensitivity Analysis

Portfolio Financing Effect - In-Place

Portfolio Financing Effect - Stabilized

Portfolio Debt Yield Effects

Lease and Sale Comps

Lease Comps

2240 NW 22nd St Lease Comps - Google My Maps

Sale Comps

2240 NW 22nd Sale Comps - Google My Maps

The Pompano Beach sub-market is shown in grey above on the eastern side

Note, Discount to RP (Exit) does not account for land price appreciation.

Industrial Zones shown in purple