Jack Wynne & Shane Billings of Bridgewater Commercial Real Estate are pleased to offer an Investor or Owner/User the opportunity to purchase a light industrial flex property with outdoor storage in the center of Ocala, Florida. This 9 unit flex building is 93% occupied with an average rent of $11.62 PSF and has five leases that are month to month with a 30-day termination notice providing value add opportunity. One 2,500 SF unit could be divided into two 1,250 SF units. A new owner could increase rents and add NNN fees or occupy part of the building and benefit from the remaining tenant leases. While the current owner pays for sewer and water, each unit has a separate water meter, and this expense could be passed on to the tenants. Six units range in size from 1,250 to 2,500 SF, which are typically easier to lease. This concrete block building was built in 1984 and has a metal roof that was replaced in 2019. The 1.84 acres is zoned M-1 (light industrial) which allows for outdoor storage in the approximately 0.87 +/- acres of grassy area. All units have separate water meters, and the building has 3 Phase Power; 400 Amp/240v. One of the warehouse spaces is air conditioned. All adjoining parcels are zoned M-1.

The 2024 Annualized Total Existing Rent is $201,713 and 2024 Annualized Projected Rent is $217,388. Estimated 2024 expenses are $64,670 The current NOI is $137,043 and the proforma NOI is $152,718.

Zoned light industrial for wholesale distribution, warehouse storage, research and development, showroom sales, and light manufacturing of finished or semi-finished products. This zoning allows for many other uses including business services, office, professional services and vehicular service. The site is in a Prime Industrial Location in Ocala within minutes of US Hwy 301 and I-75 and less than 2 miles from downtown Ocala.

Ocala's fast-growing industrial market owes part of its recent strength to the strong and sustained demand occurring along the Interstate 75 corridor, and in part due to spillover demand coming from the Orlando and Tampa metro areas. The market's location in central Florida along Interstate 75 makes it popular for industrial occupiers, particularly in the logistics and distribution sectors. Following a national trend, Ocala has experienced an acceleration in industrial rent growth over last year, although the pace of growth seems to have peaked during Q3’22. That pace of growth has moderated to 6.6% on an annual basis as of the second quarter of 2024, easily outpacing the national average of 4.5% and is one of the fastest rates among Florida's industrial markets. However, that rate of growth is not sustainable, and the base case forecast calls for moderation over the next several quarters resulting in rents in the mid-4% range by the middle of 2024. The correction is inevitable given that the 10-year average is 4.8%.

Industrial investment activity over the last year has been healthy totaling $70.8 million in sales volume, which is right in line with the 10-yr historical average. More than half of all sales volume in the past year was attributable to users, followed by private investors. 

The office market in Ocala is comprised of approximately 7 million SF of space, one of the smallest concentrations of office inventory within Central Florida. The vacancy rate of 4.4% is roughly one-third of the national average and has declined by -0.5% over the last year with very little sublease space available. The average office building in the metro is well below 10,000 SF and the average office lease size is roughly 2,000 SF. Larger deals typically occur in the Downtown Ocala submarket.

There has been very little office construction in Ocala in recent years and only about 200,000 SF has been built in the past decade. Construction during this time has primarily been small build-to-suit office properties or medical offices like the Veterans Health Administration building and UF Health's Institute of Cardiovascular Excellence. Currently, there is only 54,000 SF under construction with no new office space delivered within the last year.

Office rents in Ocala are growing at an annualized rate of 2.1%, more than twice the national average, and the base case forecast calls for growth to remain positive through 24Q2 before moving into negative territory through most of 2225 given weak expected demand for office space in that time. The current average asking rent is $23.00/SF, significantly below the U.S. average of $35.00/SF. Investment activity during 2023 was a bright spot, with nearly $47 million in total sales volume for the trailing 12-month period ending in December. While that performance fell short of the previous two years, it eclipsed annual sales volume for every year between 2013 and 2020. Private investors were responsible for the lion's share of activity during the year, accounting for nearly 85% of total sales volume, followed by institutional investors and users.