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Business Observer Friday, Nov. 4, 2005 13 years ago

Real Estate Briefs (Tampa)

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[email protected] Deal Valued at $42 MillionNaples Realty Group buys Hawthorne Place apartmentsInland-Minto joint venture acquires Largo retail centerECI Telecom subsidiary sells Largo site to St. Pete CollegeEarthMark obtains $40 million in loans for Little Harbor work
by: Adam Hughes Staff Writer

Real Estate Briefs (Tampa)

[email protected] Deal Valued at $42 Million

Two months ago, Triple Net Properties LLC said in a press release one of its publicly traded investment funds liquidated a 50% interest in Tampa's [email protected] Tampa Bay Office & Technology Center.

Only the Santa Ana, Calif.-based real estate investment firm omitted the price it received for the ownership interest in the east Tampa office facility.

Within a few days, however, the publicly traded affiliate disclosed in an investor's report it sold the ownership interest for about $33.5 million. That's $10 million more than what NNN 2002 Value Fund LLC, the Triple Net Properties investment fund, paid in 2003 for the ownership interest.

But that's not what the buyers paid for the property. Newly available land records show a group of national tenant-in-common investors paid $42.4 million for the investment fund's 50% interest.

The recorded purchase price includes a number of costs, including the replacement of cash reserves to pay future leasing costs, says Steve Corea, Triple Net Properties' vice president of acquisition.

That's typical of all tenant-in-common deals or any deal where there is an exchange buyer, Corea says. From the perspective of the tenant-in-common buyers, their purchase price reflects all the cash they invested in the deal, including replacement of any cash reserves and transaction costs. The loan that was recorded on the property has a $1.7 million holdback. That would have increased their down payment.

The divestiture produced net proceeds of $16 million, the Triple Net Properties investment fund disclosed in a report to the U.S. Securities and Exchange Commission. About 600 national investors who owned 5,960 units in the investment fund shared in those proceeds.

Three years ago, the Triple Net Properties investment fund joined with several private trusts and corporations to buy the east Tampa office facility for $55.2 million. Several of those private trusts and corporations still own tenant-in-common interests.

Under terms of this recent deal, Triple Net Properties Realty Inc., an affiliate of the Santa Ana firm, also earned a closing fee of $500,000 or about 1.5% of the $33.5 million sales price, according to the investment fund's report to the SEC. The Santa Ana parent firm took 75% of that fee under terms of a pass-through agreement.

Although it liquidated the investment fund, Triple Net Properties acquired a new interest in the east Tampa office facility through a separate affiliate. NNN Netpark II LLC, the affiliate, purchased a 20% interest as part of the $42.4 million price tag.

Other buyers included a trust controlled by the Berkovich family of Rancho Palos Verdes, Calif. It purchased a 15% interest. Laguna Niguel, Calif.-based Walnut Grove Medical Center LP purchased a 12.5% interest.

The buyers also included Treasure Island's Buccaneer Beach Resort Motel Inc., which purchased a 7.5% interest.

This most recent transaction apparently occurred at a good time in the history of the east Tampa office facility. In the Sept. 30 press release, Triple Net Properties reported tenant occupancy of about 82%. That's up from the 73% it reported in public financials as of the year ended Dec. 31.

Naples Realty Group buys

Hawthorne Place apartments

BUYER: Hawthorne Place Partners LLC, Naples

SELLER: Aspen Cove Apartments LLC, New York

PROPERTY: 10208 Hawthorne Place Drive, Riverview

PRICE: $22,250,000

PRIOR SALE: $1,300,000, vacant parcel, 1998

LAW FIRM ON DEED: Ginsburg & Redmond PC, Valhalla, N.Y.

PLANS, DESCRIPTION: Naples Realty Group LLC has made the latest move in an effort to increase the firm's investments in the Sarasota and Tampa area markets.

The Naples-based real estate investment group, operating as Hawthorne Place Partners LLC, purchased the 228 apartments in Riverview's Hawthorne Place in late September for almost $22.3 million or about $97,807 a unit.

Prior to this acquisition, the firm Alan Schiffman co-founded with W. Peter R. Cross in 2002 had accumulated a portfolio with 1,700 apartment units. Since its formation, the firm has acquired either apartment communities or developable land with a value in excess of $275 million.

The company mostly focuses on acquisitions as long-term investments, Schiffman says.

"Most developers today are no longer building multifamily communities," he says. "They're building condominiums for sale to meet a market need based on the influx of individuals."

The Naples firm acquired the 20-acre site from Aspen Cove Apartments LLC, a holding of New York architects Martin and Samuel Ginsburg. The Ginsburgs, both licensed architects who operate the Valhalla, N.Y., homebuilder Ginsburg Development Cos., bought the property in 1998 for $1.3 million. They financed construction with a $13.8 million loan through AmSouth Bank.

To finance the Riverview transaction, the Naples firm's affiliate secured a $16 million mortgage through Bank of America NA.

Inland-Minto joint venture

acquires Largo retail center

BUYER: Inland American Largo Paradise LLC, Oak Brook, Ill.

SELLER: Win-Ulmerton Ltd., Safety Harbor

PROPERTY: 10443 Ulmerton Road, Largo

PRICE: $12,846,000

PRIOR SALE: Unavailable

LAW FIRM ON DEED: Forlizzo Law Group PA, Safety Harbor

PLANS, DESCRIPTION: The recently completed Paradise Shoppes of Largo retail center sold for nearly $12.85 million to the new joint venture between Chicago's Inland American Real Estate Trust Inc. and Minto Delaware Inc. and its subsidiary Minto Builders (Florida) Inc.

Known as the MB REIT, the joint venture began operations in mid-October with the acquisition of the Largo strip center and four other retail properties in Texas. The joint venture intends to use the MB REIT to acquire up to about $2.7 billion in real estate assets, according to financials Inland American filed recently with the Securities and Exchange Commission

The joint venture purchased the 54,620 square feet of net retail space in Largo for $234 a square-foot from Win-Ulmerton Ltd., Pinellas County land records show. The seller, an affiliate of Safety Harbor's Paradise Development Group LLC, completed construction there earlier this year.

The acquisition includes 44,840 square feet occupied by a Publix supermarket and 9,800 square feet of general retail.

ECI Telecom subsidiary sells

Largo site to St. Pete College

BUYER: St. Petersburg College Board of Trustees

SELLER: ECI Telecom Inc., Fort Lauderdale

PROPERTY: 6021 142nd Ave. N., Largo

PRICE: $6,112,500

PRIOR SALE: $6,068,000 in 1997

LAW FIRM ON DEED: Mark B. Goldstein PA, Boca Raton

PLANS, DESCRIPTION: St. Petersburg College apparently negotiated a good deal for the former ECI Telcom Inc. building in Largo. The property has a just market value of nearly $6.5 million, but the college paid less than 1% over the prior purchase price.

ECI, a subsidiary of Israel's publicly traded ECI Telcom Ltd., sold the office building and a utility warehouse to the college for slightly more than $6.1 million.

The sale price is only $44,500 more than what Tadiran Telecom Networks Inc., a subsidiary of Tadiran Telecommunications Ltd., paid for the building after its construction in 1997. ECI later gained control of the building through a merger with Tadiran Telecom.

The college paid almost $104 a square foot for the 58,936-square-foot building at 6021 142nd Ave. N. The price includes 19,294 square feet of unheated utility space.

The college has not said how it will use the property. "We've been doing a lot of expanding," says college spokesman Michael O'Keeffe. "So there are lots of possibilities."

EarthMark obtains $40 million

in loans for Little Harbor work

BORROWER: Bahia Sun Associates LP, Fort Myers

LENDERS: Peninsula Bank and Ohio Savings Bank

PROPERTY: Around 302 U.S. 41, Ruskin

LOAN AMOUNTS: $24,175,000 and $16,000,000

LAW FIRMS ON MORTGAGES: Hackett & Carr PA, Punta Gorda, and Greenberg Traurig PA, Miami

PLANS, DESCRIPTION: An affiliate of Fort Myers' EarthMark Cos. secured slightly more than $40 million in construction loans over the past few months for development work in Ruskin's Little Harbor community, mortgage records show.

Bahia Sun Associates LP, the affiliate, obtained a nearly $24.2 million loan in late August through Peninsula Bank for townhome construction. The mortgage pledged the proceeds on 80 building lots in the Little Harbor development.

In late September, the EarthMark affiliate also secured a $16 million loan through Ohio Savings Bank to build condominiums. The mortgage pledges the loan proceeds on the construction of 158 condominiums in three, six-story buildings at the Inn at Harbourside at Mariner's Club. The affiliate drew that $16 million from an approved $41 million revolving line of credit.

The Fort Myers company has hired Sarasota's W.G. Mills Inc. South to build both projects.

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