Midtown pays $86 million for a three-decade Doral assembly

Midtown Capital Partners has bought 13 small-bay industrial buildings in Doral, Florida, for $86 million in an off-market trade, financed by a $63 million acquisition loan from Knighthead Funding, with debt covering 73 percent of the purchase price and roughly $23 million of equity left to earn back through rents. That works out to about $297 a square foot across about 290,000 square feet, or about $6.45 million an acre on the 13.33 acres inside a one-mile radius.

The collection carries 158 loading bays, roughly 429 parking spaces and clear heights of 16 to 22 feet, next to Miami International Airport; the bays average a dozen a building, likely the signature of multi-tenant occupancy rather than a single credit lease. The parking count, about one space per 676 square feet of building, points to operators with people on site, distributors and service contractors, rather than automated storage. Many small leases cut both ways: they reprice quickly when space is tight and empty quickly when it is not.

The seller's contribution was time. The portfolio was developed and assembled over nearly three decades, and that is why a trade of this scale was available at all: small-bay infill around Miami is held in fragments by local owners, which is what makes a 13-building collection unusual rather than routine. Connect CRE's account describes the collection as a rare opportunity to acquire institutional-scale small-bay industrial inside a highly fragmented asset class. Midtown is paying for the assembly, and the assembly is the product.

Knighthead's team on the loan was Jonathan Daniel, Alexandra Wiggins and Joseph Marraccini, with Arrow Real Estate Advisors negotiating the financing for Midtown; no sales broker was named. The Doral loan follows an active August for the lender, when it announced a $32 million refinancing for apartments in Glenview, and the loan closed at $62.92 million on September 17. Private credit that moves from a multifamily takeout to an industrial acquisition inside three weeks is a lender underwriting collateral and sponsor basis more than asset class, and that posture holds only where the collateral cannot be replaced.

No rent roll, no occupancy figure, no weighted average lease term and no cap rate accompanied the announcement, so $297 a foot cannot be checked against income from outside the deal. That leaves the underwriting resting on the two things a reader can verify: the scarcity of infill land inside a one-mile ring next to the airport, and the re-lease spread across 158 bays. Small-bay vacancy ran at 4 percent in the August reporting on this same portfolio, half the big-box rate, and a market that tight is what turns a scarcity price into a defensible one.

Industrial capital has been paying for land, credit and freight position rather than for rent rolls, and the sector's real repricing runs between assets priced on lease term and assets priced on optionality. Doral is squarely the second kind, with clear heights of 16 to 22 feet, many small tenants, and a freight position that cannot be duplicated. Nothing here is a maturity extension or a rescue; it is new equity and new debt taking a three-decade land position at a scarcity mark, and at 73 percent the advance rate makes Knighthead a lender underwriting the land, not the cash flow.

Infill assemblies like this keep clearing at land-plus prices while older big-box with near-term rollover trades flat, and the spread between those two markets widens before it narrows. The August 31 account of this same Midtown purchase listed 14 warehouses; today's count is 13. Price and square footage are identical either way, so the difference is a count rather than a basis. An $86 million portfolio should still carry one building count, because whoever maps the rent roll tenant by tenant will need the right number.

The next trade settles the price. If another Doral small-bay assembly clears at $297 a foot or better, Midtown bought at a market-clearing number and the scarcity argument holds. If the next seller has to give ground, the spread belongs to Midtown's leasing operation, and the market finds out one small lease at a time.