Velocity Venture Partners has purchased a 3.3-acre industrial site in Upper Bucks County for $2M and plans to renovate it for retail or distribution tenants.
The Bala Cynwyd firm closed a deal late last month with a private local seller for the 62K SF industrial site at 220 Main St. in Sellersville, about 40 miles north of Philadelphia, Velocity told Bisnow.
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The group plans $1.5M in capital improvements, according to Velocity founding partner Zach Moore, who is interested in revamping the location as part of an investment in his home county, which he said needs to be “brought back to life.”
The renovation will divide the building into 10 “white box”-style-ready spaces for retail or warehousing for distributors, according to a promotional flyer for the property. Units range from 2,300 SF to 25K SF.
Over the years, the site has been home to an antique store, a furniture distributor, a machine shop, a metal fabricator and other small-scale tenants.
The more than 50-year-old property sits east of the Bethlehem Pike, or Old Route 309, a corridor of commercial traffic between Philadelphia and Allentown with a “huge base” of industrial companies, Moore said.
The site is within walking distance of a historic train station, the Sellersville Theatre and a major hotel. 220 Main St. hosts an antique store and a furniture store, but no tenants have renewed yet, Moore said. Space is available for immediate leasing, and leases are offered on a short-term basis.
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Moore said the site is ideal for distributors, while its ground floor could be a fit for high-end retail, as it sits on Sellersville's main thoroughfare.
“New employers are growth-focused and want to be in a facility like that, one that recently received a substantial investment,” Moore said.
Planned improvements include a restoration of the building's facade and upgrades to existing parking and structural functions. The cost of the project comes in at about $57 per SF, about two-thirds of the cost of replacement, by Velocity’s estimate.
Because interest rates are putting pressure on traditional deals, Moore said Velocity has focused on a strategy of buying facilities off-market, which helps offset the costs of construction and higher rates.
“We really have become the dominant player in that segment of the marketplace and that geography, so [the Sellersville acquisition] fits very, very well within our existing portfolio in that market,” he said.
The firm has four other properties under negotiation or contract as part of its 9M SF portfolio of primarily industrial investments.
The latest acquisition comes as the greater Philly industrial market deals with less robust activity than a year ago. Industrial vacancy ticked up to 5.9% by the close of 2023, up from 4.1% at the end of 2022, according to Avison Young.
Velocity Venture Partners will be onstage discussing the revitalization of iconic industrial spaces at Bisnow's Philadelphia Industrial & Logistics Summit on April 23. Find out more and reserve tickets here.
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