Bullitt County distribution centers draw attention of top-tier investors

In July, New York City-based private-equity firm KTR Capital Partners LLC made developer Lee Wilburn an offer he couldn’t refuse and bought his large distribution center in Shepherdsville’s Cedar Grove Business Park.

Commercial Real Estate Louisville Business First By John Karman III – Staff writer

Aug 5, 2011

A KTR affiliate paid $26.6 million for the 662,000-square-foot building on 53 acres in a deal that closed July 15.

Wilburn’s Louisville-based firm Crossdock Development Inc. completed the facility at 300 Omicron Court in 2008. Its tenants are Alliance Entertainment Corp. and Zappos Fulfillment Centers Inc.

Wilburn said he held onto the property during the economic downturn but began getting interest from potential buyers as the economy improved.

“Now, the investment market’s back,” he said. “We had an offer that made sense for us to sell (the building) and move on.”

Bullish on Bullitt

Wilburn’s assertion that institutional investors are back in the market, looking for deals, certainly appears to be the case.

For proof, look no further than Bullitt County, a haven for bulk distribution centers.

In addition to Wilburn’s building, at least two other large warehouses have changed hands there in the past month.

Exeter Property Group LLC, a Plymouth Meeting, Pa.-based real estate private equity firm, in early July bought a GSI Commerce Inc. distribution center at 150 Omicron Court and a Zappos fulfillment center at 271 Omega Parkway. Both are in Cedar Grove.

Exeter, which already owns several industrial properties in Jefferson County, paid $16.1 million for the GSI facility and $13.7 million for the Zappos center as part of its purchase of a 6 million-square-foot industrial portfolio from Houston-based real estate investor Pinchal & Co. LLC.

The total value of the deal was $240 million.

Louisville attractive because of low vacancy, UPS presence

Wilburn said confidence in real estate holdings is increasing, and investors in top-tier markets are scouring the Louisville region and other similar-sized cities for the best opportunities.

“There’s so much money that has been sitting on the sidelines,” he said.

Wilburn said Louisville and the surrounding region is attractive because there is “very little vacancy” in the market, and the area “didn’t get overbuilt” like a lot of other cities.

KTR officials couldn’t be reached before Business First’s press deadline to discuss their interest in the local market, where the company already has several holdings.

In a statement on the company’s Web site, www.ktrcapital.com, Ryan Stoller, the firm’s Chicago-based vice president of investments, said Louisville is strong.

“Louisville weathered the recent downturn well and has emerged as a hub of e-commerce fulfillment due to its low cost of real estate and the operational advantages tied to the presence of UPS Worldport,” the United Parcel Service Inc. hub at Louisville International Airport.

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