The Trump administration is working with Cushman & Wakefield to sell seven industrial sites originally intended for conversion into immigration detention centres. Jointly with the U.S. General Services Administration (GSA), the government will collaborate with C&W to find buyers for the vacant warehouses. The goal is to recover some of the $706.8 million it paid for these seven properties earlier this year, as reported by Green Street News.
The federal government originally paid an average of $134 per square foot for the 5.3 million square foot portfolio. Currently, the federal government is accepting bids from $114 per square foot, or $600 million, for the seven sites, representing a discount of approximately 15 percent. The facilities are located in Pennsylvania, Georgia, Utah, Texas, and Michigan.
Pricing and market value
The stated price is below market value. In September, the national average price for industrial space was $138 per square foot, according to a report by CommercialCafe. Both the GSA and C&W did not immediately respond to requests for comment.
One of the properties listed by Green Street was the Ritner Logistics Center at 3501 Mountain Road in Upper Bern, PA, which U.S. Immigration and Customs Enforcement (ICE) acquired from commercial real estate lender PCCP in February for $87.4 million, or $169 per square foot. At that time, the Department of Homeland Security (DHS) planned to accommodate 1,500 immigrants in this facility.
Background to the disposals
During an intensive purchasing phase in January and February, ICE acquired a total of eleven warehouses for approximately $1 billion. However, many of the plans for detention centres, designed along the lines of facilities such as Alligator Alcatraz, Louisiana Lockup, Cornhusker Clink, and Speedway Slammer, were abandoned due to local political opposition. The GSA had arranged the acquisitions, with ICE stipulating that the facilities should have secure entry systems and interlocking doors, and be no more than 10 miles from the nearest Enforcement and Removal Operations (ERO) facility.
The properties in the portfolio also include 6020 West 300 South in Salt Lake City, 1365 East Hightower Trail in Social Circle, GA, the Eastwind Logistics Center in Socorro, TX, 50 Rausch Creek Road in Tremont, PA, 6505 Atlanta Highway in Flowery Branch, GA, and 7525 Cogswell Street in Romulus, MI.
