Billionaires Bezos, Musk Help to Launch Central Florida’s Industrial Market

Spillover demand from Central Florida’s booming industrial sector is spreading to two greater Orlando communities, one of which is getting a development boost from billionaires Jeff Bezos and Elon Musk.

Ocala, Florida, and the Space Coast area are ripe for industrial projects as developers identify new areas across the Sunshine State that can support next-day package delivery services that require warehouse logistics centers where the trucks are loaded to drive goods to doorsteps. Both Ocala and the Space Coast are ideally positioned geographically near transportation channels such as Interstate 75 and Port Canaveral, which was the world’s second-busiest port for cruises with 4.5 million passengers in 2018.

Ocala, a horse-breeding mecca, is about 80 miles north of Orlando. The Space Coast in Brevard County, home to NASA’s Kennedy Space Center, is 70 miles east of Orlando. About 10,000 people lost their jobs on the Space Coast when NASA ended its 30-year space shuttle program in 2011, a time when the region was still dealing with the effects of the Great Recession. But in recent years private space companies such as Amazon founder Bezos’ rocket company Blue Origin have filled the void, creating jobs and building industrial plants near Cape Canaveral.

Blue Origin has a 750,000-square-foot factory at 8082 Space Commerce Way in Merritt Island, Florida, and plans to build another facility, while Tesla founder Musk’s SpaceX says it intends to develop its own rocket factory in Brevard County. The Hawthorne, California-based company, founded in 2002 to open space travel to regular citizens, already has launched two rockets from a facility in Cape Canaveral and is scheduled to send 60 communications satellites into space from the Cape on Wednesday.

Both the Space Coast and Ocala are benefiting from population and job growth rates that have outperformed the nation in recent years, said Brian Alford, an economist for CoStar Market Analytics .

“This drives personal consumption, which along with the boost from a shifting retail landscape due to e-commerce, provides ample fuel for industrial demand,” he wrote in an email.

The emergence of those two areas could help Central Florida become one of the country’s strongest industrial markets in the next five to 10 years, Alford said. But he also noted that the threat of hurricanes and Florida’s location on the southeastern edge of the country, which makes it difficult to quickly reach consumers in the Northeast and Midwest, probably will keep the region from challenging the nation’s traditional heavyweight hubs of Chicago and Los Angeles.

In recent years, industrial demand has soared in Florida along the Interstate 4 corridor from Tampa to Daytona Beach, with much of the activity clustered between Tampa and Orlando in Lakeland.

Prime Sites Grabbed

Developers and investors control most of the land, and prime I-4 sites have been picked over in the past two years, said David Wilson, a broker with Colliers International in Orlando. That’s creating development opportunities in Ocala, which has easy access to I-75, Interstate 10 and Florida’s Turnpike. It’s the northern tip of the so-called Golden Triangle, which includes Orlando and Lakeland.

“If you locate your distribution center anywhere in there, you can reach a population of 14 million people within four hours,” Wilson said.

Ocala’s inventory has grown by more than 5% since 2016, according to CoStar data, with Autozone, FedEx and pet supply retailer Chewy’s completing large industrial facilities in the Ocala 489 Commerce Park.

Red Rock Developments has started construction on the 617,046-square-foot Florida Crossroads Logistics Center on Northwest 35th St. and expects to complete it by the first quarter of 2020. Demand is so strong in the area that Red Rock is building the center on speculation, without prior commitments from tenants.

Meanwhile, a Fortune 500 company is believed to be planning a 3 million-square-foot distribution center in the area, according to brokers who have heard about the development.

“We’re seeing more and more wins for Ocala,” Wilson said.

Last year, Brevard County’s industrial property inventory increased by more than 1.5 million square feet, most coming from Blue Origin, a 640,000-square-foot Walmart distribution center in the city of Cocoa and OneWeb’s 150,000-square-foot satellite manufacturing facility just outside the gates of Kennedy Space Center, according to CoStar.

The Space Coast’s growth into an industrial hub has the borders of the state’s Golden Triangle pushing farther east, Wilson said.

“Maybe we’ll call it the Golden Polygon,” he said.

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