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Commercial Real Estate
Business Observer Monday, Jul. 29, 2019 2 months ago

Investor acquires retail properties for $10.35 million

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Hyde Park Prime Steakhouse, Sur La Table part of sale of former Pineapple Square assemblage
by: Kevin McQuaid Commercial Real Estate Editor

A Canadian investor on Friday acquired a series of downtown Sarasota retail properties that had been assembled more than a decade ago as part of a $200 million complex known as Pineapple Square.

The Downtown Sarasota Collection comprises properties occupied by kitchen purveyor Sur La Table, apparel merchants Eileen Fisher and J McLaughlin, Pastry Art Café, cosmetic seller Bluemercury and restaurants Hyde Park Prime Steakhouse and Boca Sarasota, among others.

“These tenants came to Sarasota because the demographics and the excitement surrounding the revitalization of downtown fit their profile,” says Lee DeLieto Sr., a commercial agent with brokerage Michael Saunders & Co. who represented the buyer in the negotiations.

“They wanted to be in Sarasota.”

Lemon Avenue SRQ Properties L.P. bought the properties for $10.35 million.

The 30,188 square feet of space is 89% occupied, according to a sales memorandum from commercial real estate brokerage firm Holliday Fenoglio Fowler L.P.

HFF brought the properties to market earlier this year with an asking price of $14 million.

Combined, the 1500 and 1501 Main St. and 22 and 35 Lemon Ave. properties generate annual revenue in excess of $860,000, the offering material indicates.

In 2004, Ohio-based Isaac Group Holdings purchased the properties as part of a plan for an ambitious mixed-use retail and residential development known as Pineapple Square.

The development represented one of the first efforts to employ so-called “New Urbanist” planning in the city’s downtown, an outreach of Sarasota Downtown Master Plan 2020 and subsequent zoning code.

But while Isaac Group brought in new and notable national tenants such as Sur la Table, Hyde Park Prime and Eileen to downtown, the overall Pineapple Square concept became embroiled in delays over parking and became a victim of last decade’s momentous economic recession.

In early 2016, Isaac Group Holdings indicated it would sell the properties because it lacked sufficient local staff to oversee the project.

Since then, however — and partly because of the Isaac’s proposals — downtown Sarasota has experienced a resurgence of interest, led by new  residential, lodging and retail developments.

Three years ago, Isaac Group sold off the rights to develop a condominium tower that was to be part of the original project to The Kolter Group, of West Palm Beach.

Kolter is currently constructing The Mark, a mixed-use project containing 157 condos and 50,000 square feet of retail and office space, on the site.

The Downtown Sarasota Collection comes amid renewed investor interest in urban core properties in Sarasota.

In March, an affiliate of New York Life Insurance Real Estate Investors spent $24.62 million for the Shoppes at Sarasota Row, a 59,341-square-foot Whole Foods Market-anchored retail property.

And last month, New York-based Bluerock Real Estate LLC invested $80.3 million to buy the 180-unit DeSota Apartments downtown on the site of a former United Way building.

The sale also comes amid an influx of residents and visitors into Sarasota.

More than 1,400 new apartment units have been developed and delivered in downtown in the past three years, and more than 300 upscale condos are under construction. More than 200 additional condo units also are planned for in and around downtown.

At the same time, roughly 500 new hotel rooms have been added to downtown Sarasota’s inventory over the past five years.

“My involvement with these properties goes back several years, to the original assemblage,” DeLieto says. “To see the development take place, the vision the Isaacs had and the impact it’s had on downtown has been a rare opportunity.”

 

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