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Business Observer Friday, Nov. 3, 2006 13 years ago

Commercial RE Briefs

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Developers Diversified Realty Trust buys Inland RetailDavis Marcus Partners acquires two Naples office buildingsMiami developer buys land for apartments or condosKite Realty buys lot in Shops at Eagle CreekING Clarion buys Town Place, plans improvementsTennessee group acquires shopping centerFedex acquires Tampa terminal as part of company purchaseRegency Centers, Macquarie buy Merchants CrossingUniversity Parkway Friendly's sold to new ownershipNew flex parks planned for Creekwood, LenaEmpire Equity buys Shadowood, others from Equity Residential

Commercial RE Briefs

by Sean Roth | Real Estate Editor

Regional

Developers Diversified Realty Trust buys Inland Retail

Developers Diversified Realty Trust has proposed the purchase of Inland Retail Real Estate Trust, one of the four REITs in The Inland Real Estate Group of Cos. Inc., for $6.2 billion, a price that includes about $2.3 billion in debt.

The acquisition would give the fourth largest shopping center operator an additional 307 retail centers, mainly in southern states including Florida, Georgia, North Carolina, South Carolina and Virginia. The deal would cover 68 centers in Florida with 8.7 million square feet of space. The Inland Retail portfolio covers about 44 million square feet of retail space total.

Developers Diversified has agreed to acquire all the outstanding shares of Inland Retail for a total merger price of $14 per share. To finance the deal, Developers Diversified says it has an agreement with a major U.S. institutional investor on a joint venture covering 67 of Inland Retail's community centers or about $3 billion of total asset value.

"We're pleased with the opportunity to expand our footprint in such key markets as Atlanta, Charlotte, Miami and Orlando," Daniel Hurwitz, Developers Diversified's senior executive vice president and chief investment officer reported in a press release announcing the deal. "Additionally, we strengthen our relationships with numerous national retailers ... The combination of outstanding locations, coupled with strong co-tenancy, makes the Inland portfolio a natural fit with the Developers Diversified operating platform."

Developers Diversified will also acquire five projects in varying development stages, along with other potential expansion and redevelopment projects.

Following the merger, scheduled to occur early next year, Developers Diversified will own or manage more than 800 shopping centers in 45 states, plus Puerto Rico and Brazil, comprising 162 million square feet. Inland's Board of Directors unanimously approved the merger.

Gulf Coast properties affected by the deal

City Property

Bradenton Cortez Plaza

Bradenton Creekwood Crossing

Bradenton Lakewood Ranch

Brandon Brandon Blvd Shoppes

Fort Meyers Cypress Trace

Fort Meyers Market Square

Hernando Shoppes of Citrus Hills

Largo Bardmoor

Naples Countryside

New Port

Richey Shoppes of Golden Acres

Orlando Bridgewater Marketplace

Orlando Conway Plaza

City Property

Plant City Lake Walden Square

Palm Harbor Brooker Creek

Plant City Plant City Crossing

Riverview Bloomingdale Hills

Sarasota Sarasota Pavilion

St. Petersburg Gateway Mall

Tampa New Tampa Commons

Tampa Pointe At Tampa Palms

Tampa Shoppes At New Tampa

Tampa Walks At Highwood - I

Tampa Walks At Highwood - II

Valrico Shoppes At Lithia

Lee/Collier

Davis Marcus Partners acquires two Naples office buildings

BUYER: DMP Tamiami LLC (principal Tamiami Manager Corp.), Boston

SELLER: Collier Land Holdings Ltd., CDC Land Investments Inc. and Collier Place I Ltd.

PROPERTY: 3003, 3001 and 2911 9th St. N., Naples

PRICE: $19 million

LAW FIRM ON DEED: Edwards Angell Palmer & Dodge LLP, West Palm Beach

PLANS, DESCRIPTION: Boston-based Davis Marcus Partners purchased two buildings, totaling 60,000 square feet of professional office space on Harbor Drive in Naples.

The acquisition is Davis Marcus Partners' second since entering the Gulf Coast market.

"We are looking at Southwest Florida as an area of rapid growth," says Bill McAvoy, chief investment officer for Davis Marcus Partners. "Back in March we made our first acquisition in Naples. We bought the Collier Health Park near North Collier Hospital. That has about 76,000 square feet of office space in three buildings."

McAvoy says the newest acquisition gives the 30-year-old real estate company greater diversity with a position in both the medical office community and the financial-services office market.

The company's goal is grow to a one million to two million square feet from Naples to Sarasota in about five years, according to McAvoy.

"We're looking to get into the development, too," says McAvoy. "We do expect some softening in the [office] market as the residential market continues to take a hit. There is going to be less impact though in the office market than in the land market. The question is whether land prices will be coming down, making development more affordable. It's important that we are in the ground now, establishing the credibility to acquire additional assets as the market continues to evolve."

Davis Marcus Partners manages more than 4.5 million square feet of commercial space. In the past year, the company acquired a total of 1.2 million square feet.

Davis Marcus Partners mortgaged the two office buildings to Citigroup Global Markets Realty Corp. for $13.65 million.

Miami developer buys land for apartments or condos

BUYER: San Carlos Park LLC (San Carlos Park Cobalt Inc.), Miami

SELLER: Inge Przystawik, Trustee

PROPERTY: 18171 S. U.S. 41, Fort Myers

PRICE: $2 million

LAW FIRM ON DEED: Roosa Sutton Burandt & Adamski LLP, Cape Coral

PLANS, DESCRIPTION: Cobalt Development Group Inc.'s San Carlos Park LLC purchased 9.24-acres, across the street from Bonita Bay Development's Shadow Wood development and near Florida Gulf Coast University, from Inge Przystawik for $2 million. The new owner plans to develop the property in a multi-family development, either as apartments or condominiums.

Dan Miller of The Miller Alliance at Re/Max Realty Group represented the buyer, and Hal Arkin of Gates D'Alessandro & Woodyard, LLC negotiated the transaction for the seller.

San Carlos Park LLC mortgaged the land to LaSalle Bank for $1.51 million.

Kite Realty buys lot in Shops at Eagle Creek

BUYER: KRG Eagle Creek IV LLC (Kite Realty Group LP), Indianapolis

SELLER: Eagle Creek Commercial Co. Inc.

PROPERTY: 6621 Isle of Capri Road

PRICE: $1.15 million

LAW FIRM ON DEED: Nold & Shenk, Marco Island

PLANS, DESCRIPTION: Large national developer Kite Realty Group LP purchased a 1.23-acres lot in The Shops at Eagle Creek Pad. Kite Realty officials declined to comment on the purchase, explaining that it hasn't finalized plans for the property.

Etc...

• Gates McVey Butz Institutional Construction, a division of Naples-based Gates McVey Builders Inc. and Butz Enterprises, Inc. of Allentown, Pa., is currently constructing Lee County School District dual-school project in Cape Coral using tilt-wall construction. The tilt-up method requires the contractor to lift into place three-story, 100,000-pound tilt-wall panels to form the walls.

Tilt wall construction has steadily grown in popularity largely because of the rapid turn around time for projects and the especially strong walls that are created. The process includes casting concrete walls horizontally on the building floor slab or separate casting slab.  Then once they are hardened, the slabs are lifted with a crane and set on prepared foundations to form the exterior walls of the building.

The 40-acre Cape Coral campus at the corner of Skyline Boulevard and Trafalgar Parkway is comprised of Challenger Middle School and Elementary School "Y". The schools are being simultaneously constructed by Gates McVey Butz utilizing two different design firm: BRPH Architects-Engineers Inc. for Challenger Middle School and RS&H Architects & Engineers on Elementary School "Y."

Challenger Middle School has a total of 130,813 square feet with a free standing Gymnasium of 28,778 square feet. While Elementary School "Y" has a total of 122,244 square feet and a free standing P.E. building. Combined, the schools will accommodate approximately 2,400 students. The overall project cost is about $50 million.

• Fort Myers-based Owen-Ames-Kimball Co. recently completed development and construction management services for the South Kendall bank office of Colonial Bank in Dade County. The 5,000-square-foot, full-service bank is the first of a series of offices for which Owen-Ames-Kimball will provide program management for Colonial Bank throughout Florida. Under this program, Owen-Ames-Kimball will assist the bank in project management and site selection with another 15 to 20 new banks being built over the next two years.

• Suncoast Schools Federal Credit Union will be building its new bank at the corner of Cape Coral Parkway, southwest of 18th Avenue, on a 1.5-acre commercial parcel. 18th Avenue LLC sold the property to Suncoast Schools Federal Credit Union for $1.8 million. Hal Arkin, with Gates D'Alessandro & Woodyard LLC negotiated the sale for the seller. Jim Jacob and Michele German of Jacob Real Estate Services Inc of Tampa, represented the buyer.

• The Bonita Bay Group has opened an office in the historic Barron House in LaBelle. According to Mitch Hutchcraft, regional vice president of Bonita Bay Group, the office will serve as headquarters for the company's community outreach efforts, its partnership with the city and the planning and development of its villages and communities in Hendry County.

Tampa Bay

ING Clarion buys Town Place, plans improvements

BUYER: ING Clarion

SELLER: Decade Properties

PROPERTY: 2545 NE Coachman Road, Clearwater

PRICE: $19.53 million

PREVIOUS PRICE: $7.61 million, February 1990

PLANS, DESCRIPTION: New York-based real estate investment advisory firm ING Clarion purchased the 240-unit Town Place Apartments in Clearwater for $19.53 million or $81,354 per unit. Brad Suddath, a senior director with JBM Realty Advisors who represented the seller, says that ING Clarion officials told him they planned to make some pretty extensive capital improvements to the complex.

"Right now it's a B or B-plus," Suddath says. "If they follow through on their original intention, they plan to raise its class to an A."

ING Clarion officials did not return calls for comment prior to deadline.

ING Clarion is not alone it seems in its interest in apartment properties in the Tampa area. Following the crash in the condo conversion market, Suddath says he has seen more large institutional investors, targeting apartment communities in infill, densely populated areas.

"These companies were forced out of the market for a year or two by the condo converters," Suddath says. "[But now,] prices are back from the stratosphere. Plus we're seeing phenomenal rent growth. Rents have gone up double digits in almost every submarket [of the Tampa Bay area.]"

Another incentive, Suddath says, is that for many rental properties, including the Town Place, there isn't any available nearby land for future competitors.

"They don't have to worry that someone is going to build another complex across the street because in this case across the street is a Wal-Mart," Suddath says.

ING Clarion provides real-estate management and advisory services to institutional owners and individual investors. As of June 30, ING Clarion had about $35.9 billion in total assets under management. ING Clarion is the U.S. investment management arm of the largest real estate investment manager in the world, ING Real Estate. Together, the two companies have $97 billion in real estate assets under management.

Tennessee group acquires shopping center

BUYER: SKM Ventures LLC (principal: Steven Maddox), Knoxville, Tenn. and Keystone Crossings Center LLC (principals: K.O. Kennedy and Louis Browning), Brentwood, Tenn.

SELLER: RS Keystone LLC

PROPERTY: 8537 S. Mobley Road, Odessa

PRICE: $5.16 million

PREVIOUS PRICE: $2.6 million, July 2004

LAW FIRM ON DEED: Shutts & Bowen LLP, Fort Lauderdale

PLANS, DESCRIPTION: SKM Ventures LLC and Keystone Crossings Center LLC of Tennessee purchased the 33,624-square-foot Keystone Crossings Shopping Center in Odessa from RS Keystone LLC for $5.16 million, or about $153 per square foot. According to CoStar Group research, at the time of the sale the center had a cap rate between 7.85% and 7.9%. The five-store center is anchored by Kash n' Karry.

Scott Rutherford and Les Aron of Marcus & Millichap handled the transaction.

The new ownership group mortgaged the property to the former owner for $4.06 million.

Fedex acquires Tampa terminal as part of company purchase

BUYER: Fedex National LTL Inc. (Robert Molinet, Douglas Duncan, Christine Richards, Donald Brown, Robert Rhea and Shahram), Memphis

SELLER: Watkins Motor Lines Inc.

PROPERTY: 8804 Maislin Drive, Tampa

PRICE: $3 million

PREVIOUS PRICE: Oct. 2003, $1.6 million

LAW FIRM ON DEED: Troutman Sanders LLP, Atlanta

PLANS, DESCRIPTION: Memphis-based global shipping service FedEx Corp. acquired a 20,120-square-foot freight terminal in the U.S. 301 Industrial Park in Tampa as part of its much larger acquisition of the Less than Truck Load (LTL) operations of Lakeland-based Watkins Motor Lines and other affiliates for $780 million. The terminal, built in 1988, is on an about 8-acre parcel.

Watkins Motor Lines, which generated more than $1 billion in annual revenue, and Watkins Canada Express will be re-branded FedEx National LTL and FedEx Freight Canada, respectively.

Sarasota/Manatee

Regency Centers, Macquarie buy Merchants Crossing

Jacksonville-based real-estate investment trust Regency Centers Corp. and Australian trust Macquarie CountryWide Trust purchased the 213,000-square-foot Merchants Crossing shopping center, 1500 Placida Road in Englewood, from GK Development. Terms of the deal were not released.

According to Barry Argalas, Regency Centers' vice president of national acquisitions and dispositions, Regency Centers and Macquarie CountryWide own more than 150 shopping centers jointly, while Regency and its affiliates own a total of more than 400 shopping centers.

"We prefer to own centers that are anchored by the top grocery stores in a given market," Argalas says. "In Florida that's Publix, and Merchants Crossing is a Publix-anchored center. We also have found that Beall's larger store concepts - that replaced K-Mart locations - tend to perform very well, and it has that as well. There is long term security there."

While Regency had no plans to change to the center, Argalas says that over time Regency will likely add some larger national tenants to the shopping center

Merchant Crossing is anchored by Publix, Beall's, Office Depot and Walgreen's.

Other Regency-owned Gulf Coast shopping centers

Property Name City GLA

Beneva Village Shops Sarasota 141,532

Berkshire Commons Naples 106,354

Bloomingdale Square Brandon 267,736

First Street Village Fort Myers 84,619(under development)

Kings Crossing Sun City 75,020

Marketplace Shopping Center St. Petersburg 90,296

Merchants Crossing Englewood 213,739

Peachland Promenade Port Charlotte 82,082

Regency Square Brandon 345,149

Shoppes of Grande Oak Estero 78,784

Shoppes of Pebblebrook Naples 76,766

Town Square Center Tampa 44,380

Village Center Tampa 181,110

Source: Regency Centers Corp.

University Parkway Friendly's sold to new ownership

BUYER: Unlock LLC (principals: Harry Nikias and Lawrence Hankin), Sarasota

SELLER: Lockwood Friends Inc.

PROPERTY: 3180 University Parkway, Sarasota

PRICE: $2.51 million

PREVIOUS PRICE: $750,000, June 2001

ATTORNEY ON DEED: Lawrence M. Hankin Esq., Sarasota

PLANS, DESCRIPTION: Attorney Lawrence Hankin of the Sarasota firm of Hankin, Persson, Davis, McClenathen & Darnell, and Harry Nikias purchased the 5,000-square-foot former Friendly's restaurant building on University Parkway for $2.5 million. Hankin did not return calls for comment prior to deadline. The restaurant was built in 2002.

The Review reported in September that the restaurant has been closed for renovation and updating and that its owner, Carmine D'Ariano, was selling it to David Buchman's Central Florida Restaurants LLC. Buchman's company already owns a dozen Florida Friendly's, including 11 in Orlando and one in Bradenton, near Lakewood Ranch.

New flex parks planned for Creekwood, Lena

BUYER: Creekwood Commons Development LLC (principals: Michael Sporer and Austin Kennedy), Bradenton

SELLER: Two Investors LLC fka Two Developers LLC

PROPERTY: lots 24 and 25, Creekwood East Corporate Park, Bradenton

PRICE: $1.6 Million

LAW FIRM ON DEED: Williams Parker Harrison Dietz & Getzen, Sarasota

PLANS, DESCRIPTION: Michael Sporer and Austin Kennedy transferred two lots from one of their subsidiary companies to another company in preparation for developing the site as a three-building flex (warehouse/office) park called Creekwood Commons East park. The duo plan to develop 22 condominium units, about 1,500 square feet each.

Sporer expects to start site work this month with a more formal groundbreaking planned for December.

"We're working towards delivering them in the fall of 2007," Sporer says. Prices for the flex units will start at $225,000.

Kennedy and Sporer also plan to develop a similar flex project, the five-building, 36-unit Creekwood Exchange across Lena Road.

Bradenton-based Interstate Commercial Brokers is the listing and selling agent for both parks. Kennedy General Contracting Inc. will be the contractor for both parks.

Creekwood Commons Development LLC mortgaged the property to Community Bank of Manatee for $3.25 million.

Empire Equity buys Shadowood, others from Equity Residential

BUYER: Empirian Shadowood I LLC (principal: Ezra Beyman), Montvale, N.J.

SELLER: Shadowood Apartments Ltd.

PROPERTY: 1450 Sanford Circle, Sarasota

PRICE: $4.416 million

LAW FIRM ON DEED: DLA Piper US LLP, Chicago

PLANS, DESCRIPTION: Affiliates of Empire Group Holdings LLC acquired the 130-unit Shadowood Apartments in Sarasota from Equity Residential for about $4 million in just a small piece of its about $1.1-billion acquisition of Equity Residential's Lexford Housing Division. The Lexford Housing Division covered 289 properties, including 27,115 apartment units in ten states and a property management business headquartered in Columbus, Ohio. The purchase was covered under a $243 million mortgage from Merrill Lynch Mortgage Lending Inc.

Other gulf apartments affected in the sale include:

•Candlelight in Brooksville

•Garden Terrace in Tampa

•Heronwood in Fort Myers

•Hidden Acres in Sarasota

•Miguel Place in Port Richey

•Oakwood Village in Hudson

•Park Ville in Fort Myers

•Pine Meadow in Fort Myers,

•Pinellas Pines in Pinellas Park

•Ranchside in New Port Richey

•Terrace Trace in Tampa

•Turkscap in Brandon

•University Square in Tampa

•Windrush in North Fort Myers

Carla Rayman, owner of Cloud Nine Realty in Sarasota, has been selected to market Los Faros de Panama (The Lighthouses of Panama) in Panama City, Panama.

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