The Beakon Lakes
Subject- Corporate Finance
Case- Beacon Lakes
1. Step back from the challenges faced by Armando Codina and analyze the Beacon Lakes project. Is it a good project? What are the strengths and weaknesses of the site and market?
The Beacon Lakes project is ambitious and at the same time very realizable project designed by Armando Codina. Codina put much effort into this project and has spent about two years to get permissions to start building a warehouse and an office park in the suburb of Miami. He has already overcome some obstacles but there is a long way before getting all necessary approvals and permits.
Stepping back from regulatory and political hurdles that Armando faces let us consider the Beacon Lakes project by itself with its strengths and weaknesses.
Strengths:
Technical specifications: 28-foot-high ceilings, 6-inch steel-reinforced concrete floors to support high-density storage, 180- foot-wide truck courts, early-suppression fast-response (ESFR) fire systems, etc. These features allow piling up goods on each other thus using less square feet of warehouse for the same amount of goods.
Environmental advantages: rehabilitation of contaminated land and reutilization of abandoned buildings.
Economic: the lack of available land in south Florida and the long-term trend of increasing international trade will allow a significant premium to the average rental rate. More detailed calculations are included below.
Location: The Beacon Lakes warehouse is to be located in Miami-Dade County's Airport West region, just four miles west of the Miami International Airport and 15 miles west of the Port of Miami. The Airport West location is especially advantageous as it is one of North America's largest trade hubs. Highly developed shipping infrastructure in Miami and its proximity to Central and South America results in large volumes of international trade. The Airport West market had grown substantially over the previous decade as Miami
Case- Beacon Lakes
1. Step back from the challenges faced by Armando Codina and analyze the Beacon Lakes project. Is it a good project? What are the strengths and weaknesses of the site and market?
The Beacon Lakes project is ambitious and at the same time very realizable project designed by Armando Codina. Codina put much effort into this project and has spent about two years to get permissions to start building a warehouse and an office park in the suburb of Miami. He has already overcome some obstacles but there is a long way before getting all necessary approvals and permits.
Stepping back from regulatory and political hurdles that Armando faces let us consider the Beacon Lakes project by itself with its strengths and weaknesses.
Strengths:
Technical specifications: 28-foot-high ceilings, 6-inch steel-reinforced concrete floors to support high-density storage, 180- foot-wide truck courts, early-suppression fast-response (ESFR) fire systems, etc. These features allow piling up goods on each other thus using less square feet of warehouse for the same amount of goods.
Environmental advantages: rehabilitation of contaminated land and reutilization of abandoned buildings.
Economic: the lack of available land in south Florida and the long-term trend of increasing international trade will allow a significant premium to the average rental rate. More detailed calculations are included below.
Location: The Beacon Lakes warehouse is to be located in Miami-Dade County's Airport West region, just four miles west of the Miami International Airport and 15 miles west of the Port of Miami. The Airport West location is especially advantageous as it is one of North America's largest trade hubs. Highly developed shipping infrastructure in Miami and its proximity to Central and South America results in large volumes of international trade. The Airport West market had grown substantially over the previous decade as Miami