Avison Young is currently marketing a newly constructed Amazon AR Sort Fulfillment Center with in-place CTL financing. The 2.68-million-square-foot property is a state-of-the-art prototype that represents not only the future of Amazon’s distribution network, but also sets the standard for a new generation of industry logistics properties.
The unique construction elements of the four-story building mean that a significant bonus depreciation deduction could be available. For the right buyer, when tax affected, such bonus depreciation deduction and its concurrent tax shelter could cover a significant portion of the buyer’s equity investment.
Located in the Des Moines MSA, the property is being offered at $55 million over a debt balance of $299.3 million, meaning that it could cover a 1031 exchange requirement of nearly $355 million. A buyer will have the option to utilize a paydown/readvance feature on all of the $299.3 million in debt, which must be assumed.
The seller, Mesirow Realty Sale-Leaseback of Chicago, has packaged a number of similar transactions in recent years and is seeing a significant uptick in interest for this kind of investment.
“There is an appetite in the market for tax-efficient structures like this, and we think that an offering of this size is going to go very quickly to the right buyer,” said John Kevill, President of U.S. Capital Markets for Avison Young.
Added Jon Hipp, head of Avison Young’s U.S. Net Lease Group: “Trade buyers, and investors who can avail themselves of the full bonus depreciation write-off, aren’t going to find a lot of other properties on the market like this.”
Indeed, at over $350 million, this property represents one of the largest Amazon properties to go to the market thus far in 2021.
When asked about the market in Des Moines, Jim Hanson, Principal in Avison Young’s Chicago Capital Markets Group, said, “Amazon has made a big commitment to the Des Moines market, constructing not only this facility but a new complementary sortation facility directly across the street as well.”
The central location of Des Moines was a logical place to locate Amazon’s first fulfillment center in the state.
In addition to Amazon, other major technology companies are investing heavily in Des Moines as well. Apple, Facebook and Microsoft are collectively investing over $6 billion in the Des Moines market. Facebook alone is spending $3 billion on a pair of data centers about two miles from Amazon’s AR Sort Fulfillment Center. A combination of low taxes, affordable labor, highway access and cheap power make Des Moines a target for distribution networks and data center operations.
More information on the deal can be obtained from Avison Young’s team of Kevill, Hipp, Jim Hanson or Rich Murphy.
Avison Young creates real economic, social and environmental value as a global real estate advisor, powered by people. As a private company, our clients collaborate with an empowered partner who is invested in their success. Our integrated talent realizes the full potential of real estate by using global intelligence platforms that provide clients with insights and advantage. Together, we can create healthy, productive workplaces for employees, cities that are centers for prosperity for their citizens, and built spaces and places that create a net benefit to the economy, the environment and the community.
Avison Young is a 2020 winner of the Canada’s Best Managed Companies Platinum Club designation, having retained its Best Managed designation for nine consecutive years.
