J.P. Morgan Chase has supplied only under $61.4 million to Reich Brothers along with Ziel Feldman’s HFZ Capital Group to refinance a nearly 2-million-square-foot distribution centre in Ocala, Fla., Commercial Observer has discovered.
The loan refinanced past debt from Ares Management from past November that insured the joint venture’s $70 million sale-leaseback of what’s Florida’s biggest industrial advantage in TransformCo., the former parent company of Sears Holdings. This funding closed on July 2, sources said.
Walker & Dunlop’s New York City-based equity and debt capital markets group, headed by Aaron Appel, Keith Kurland and Jonathan and Adam Schwartz, sourced and arranged the financing, according to sources with knowledge of the offer. W&D declined to comment on the trade.
J.P. Morgan Chase declined to comment on the deal.
Included in this sale-leaseback, former proprietor TransformCo., beneath a 10-year rental agreement, will split occupancy with distribution and logistics firm Innovel Solutions, that was formerly under the umbrella of TransformCo. until the parent offered the last-mile distributor to grocery giant Costco Wholesale Corp. in March for $1 billion in cash. TransformCo. will use the advantage as its Southeast distributions flagship, according to a November 2019 report by the American Journal of Transportation.
HFZ chairman and founder Ziel Feldman stated last November that its purchase of this property — now referred to as the Transform-Innovel Distribution Center — “marks a major milestone for HFZ-Reich, expanding our portfolio to encompass 10 million square feet of industrial properties throughout the United States. We are excited to be entering the Ocala industrial market as it provides a major opportunity to be at the center of one of the country’s largest distribution centers,” based on a report in the time by the American Journal of Transportation.
In February 2019, the land — a former Kmart distribution centre at 655 South West 52nd Avenue at Ocala — was a portion of the $5.2 billion liquidation of Sears Holdings, the owner of Sears and Kmart, and was valued at about $58.4 million in the time of the bankruptcy sale, according to a March 2019 report in the Ocala Star Banner. Sears chairman Eddie Lampert finally staved off the liquidation, purchasing the resources in question through his hedge fund ESL Investments and maintaining open about 425 shops, according to the Star Banner’s report. The site was put out there in September 2018.
The HFZ and Reich venture, targeting industrial, appears to be timed to near perfection to its COVID-19 era, and it has proved profitable. In late March, the HFZ and Reich Bros. JV nabbed $71.5 million in debt in Ladder Capital because of the $68.5 million purchase of a 4.2-million-square-foot logistics complex situated just outside Chicago, as CO formerly reported.