Hillwood sells GE Oil & Gas site for $57.6M

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Hillwood Investment Properties sold the GE Oil & Gas plant property in Cecil Commerce Center this week for $57.6 million, five months after the formal announcement the Fortune 10 company would lease a speculative building on the site.

Realty Income Corp. of San Diego bought the 40-acre property and 510,000-square-foot building.

Dan Tatsch, senior vice president of Hillwood Investment Properties, said Thursday the company doesn’t comment publicly on “any of the deals we might or might not be working on.”

Dallas-based Hillwood is the master developer at the city-owned Westside business park, a former naval air station. Hillwood bought the GE Oil & Gas site from the city in August 2013 for $294,290 and then developed the speculative 510,000-square-foot structure.

GE Oil & Gas announced in September it would lease the property to produce valves and controls.

It is setting up the plant and pledged to hire 500 people by the end of 2016.

City records show Hillwood has invested at least $16 million into construction costs for the structure, which is assessed by the Duval County Property Appraiser at $17.64 million.

Hillwood sold the property Wednesday. The deed shows that through New World Avenue Bldg A-1 LLC, Hillwood sold the property at 12970 Normandy Blvd.

The GE Oil & Gas structure, built in 2014, was Hillwood’s first speculative building at its AllianceFlorida at Cecil Commerce Center. It was developed so prospects like GE would have quick access.

In September, Gov. Rick Scott and other leaders announced GE Oil & Gas will invest about $50 million into the building to pay for manufacturing and IT equipment as well as additional real estate improvements.

The project is expected to ultimately include more than $89 million in real estate construction and improvements and expenditures on manufacturing equipment over the next 15 years. The initial building is designed to double in size to 1 million square feet.

The city and state approved $15.4 million in incentives for the deal, comprising $10 million from the city and $5.4 million from the state.

Realty Income Corporation, The Monthly Dividend Co., bought the property through Terraza 13 LLC. It registered the name with the state in February.

The realtyincome.com website says it buys commercial real estate for cash leased to tenants that have a good business and operating track record.

Realty Income’s spokesman did not return two telephone calls.

Todd Lukasik, senior equity analyst at Morningstar, follows Realty Income and said that while he is not familiar with the Jacksonville transaction, it fits Realty Income’s strategy.

He said that lately, in addition to Realty Income’s traditional focus on retail properties, the company has been buying some nonretail assets such as manufacturing buildings.

On Feb. 17, Realty Income Corp. reported it completed $1.4 billion in acquisitions during 2014, its second-most acquisitive year. It invested in 506 properties in 42 states.

As of Dec. 31, its portfolio of freestanding, single-tenant properties comprised 4,327 properties in 49 states and Puerto Rico, leased to 234 commercial tenants doing business in 47 industries.

It said the properties are leased under long-term, net leases with a weighted average remaining lease term of about 10.2 years.

Meanwhile, Tatsch said Hillwood wants to build a second speculative building at AllianceFlorida after it determines the size and configuration.

“We look forward to doing that sooner rather than later,” Tatsch said.

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