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Business Observer Friday, Jul. 22, 2005 13 years ago

Real Estate Briefs (Tampa)

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Renaissance Vinoy Deal Valued at $44 MillionVenture pays $30 million for assisted-living facilityDeveloper purchases rental properties for $106 millionOpus South closes dealto build luxury condosREIT pays $26 million for east Tampa property
by: Adam Hughes Staff Writer

Real Estate Briefs (Tampa)

Renaissance Vinoy Deal Valued at $44 Million

Business relationships count at Walton Street Capital LLC. That's why the Chicago-based manager of private real estate investments funds now controls St. Petersburg's Renaissance Vinoy Resort & Golf Club.

Walton Street acquired the ground leases to the historic downtown waterfront hotel late last month from Marriott International Inc. in a package deal valued at about $578 million, says Tom Bennett, a Walton Street principal. The Chicago firm acquired seven other hotels as part of that deal.

The principals at Walton Street jumped at the opportunity when Marriott officials expressed a willingness to divest ownership in the 80-year-old St. Petersburg hotel, Bennett says.

"Clearly, the Vinoy is one we're very excited about because of its quality and history," he says. "To acquire this type of asset in Florida doesn't come around all that often."

That opportunity came from years of relationship building between the two firms, Bennett says. The Chicago firm has developed and owned hotels during that time through various partnerships with the much larger publicly traded hotel company.

Neither firm would disclose details of the individual deals. "We've not disclosed individual allocations," Bennett says. "I would prefer not to get into that."

Property records show Walton Street paid nearly $33 million, or about $91,276 a room, for the ground lease to the 360-room hotel. It also paid almost $10.2 million for the ground lease to the 4.5-acre marina and $954,400 for a smaller vacant parcel. That compares with the $39 million Marriott International paid in 1995 for the ground leases.

The Chicago firm mortgaged the St. Petersburg asset for $47 million through Column Financial. That leaves about $3 million for capital improvements. Bennett doesn't foresee the need for any significant renovation work because he says Marriott completed considerable improvements during 2002-03.

"This is a high-quality asset that is in very good shape," he says. "We do have some money allocated for a number of things, but there's no single area; $3 million is about right. It's more or less routine replacement of equipment we've scheduled out."

The deal came as the Chicago firm begins work on another project on the other side of Tampa Bay. Earlier this year, it acquired Tampa's Georgetown Apartments in a joint venture partnership with Fort Lauderdale's Motta Co. LLC.

The joint venture paid about $125 million for the 162-acre rental apartment community at the northeastern side of the Gandy Bridge. The partnership plans to demolish the 64, four-story apartment buildings and build the new Westshore Beach Club into a 1,200-unit condominium community.

Founded in the mid-1990s, Walton Street has amassed about $1.8 billion in equity investments. The firm's principals claim they have personally committed about $151 million to the equity funds and advertise at least a 20% return on investments.

Venture pays $30 million

for assisted-living facility

BUYER: Sunrise IV Boca Ciega SL LLC.

SELLER: Fountains Senior Properties of Florida LLC.

PROPERTY: 1255 Pasadena Ave. S., South Pasadena.

PRICE: $29,993,857

PRIOR SALE: $15,851,000 in 1997

LAW FIRM ON DEED: Hogan & Hartson LLP, McLean, Va.

PLANS, DESCRIPTION: A joint-venture affiliate of publicly traded Sunrise Senior Living Inc. has purchased an assisted-living facility in South Pasadena for nearly $30 million.

Sunrise IV Boca Ciega SL LLC paid 89% more than the prior purchase price for the Fountains at Boca Ciega Bay, 1255 Pasadena Ave. S., South Pasadena. Fountains Senior Properties of Florida LLC, a holding of Tucson, Ariz.-based Fountains Inc., paid almost $16 million in July 1997 for the 13.5-acre waterfront property.

The facility contains 596 units in two, 20-story towers that serve independent- and assisted-living residents. It also includes a 150-bed nursing facility.

The McLean, Va.-based buyer acquired the property as a 20% joint venture partner with Arcapita Inc., a global investment firm with offices in Bahrain, Atlanta and London. The package includes 16 other Fountains Inc. properties located throughout the United States.

The joint venture partners financed the acquisition with a $406 million mortgage through the New York branch of HSH Nordbank AG. Local property records show the joint venture mortgaged the South Pasadena property for almost $61 million.

Officials at the McLean-based company did not respond to a request for comment.

Developer purchases rental properties for $106 million

BUYERS: Bay Hamptons LLC and Bay Tampa LLC.

SELLERS: USA Hamptons I LLC, et al, and STW Investors LLC, et al.

PROPERTIES: 15350 Amberly Drive, Tampa, and 1502 Marsh Cove, Brandon.

PRICES: $54.6 million and $51.5 million

PRIOR SALES: $35.1 million, 2004, and $36 million, 2003.

LAW FIRMS ON DEED: Mastrogiovanni Schorsch & Mersky PC, Dallas, and Jonathan James Damonte Chartered, Largo.

PLANS, DESCRIPTION: Two affiliated Boca Raton investment groups have purchased 767 apartments at two Tampa Bay area rental communities in separate deals valued at about $106 million. One of the deals fetched possibly the highest price per unit for a Tampa Bay area rental property.

The investment groups are headed by Boca Raton developer Valerie Kaan. Over the past decade, Kaan gained experience in the condominium development markets in Massachusetts and Florida principally through her professional and personal relationship with William Lilly.

In 1993, Lilly pleaded guilty to one count of conspiracy and four counts of wire fraud in the Boston federal court for his part in a scheme to falsify mortgage documents. Lilly, who dubbed himself the "Condo King," served two, concurrent five-year prison sentences on allegations he falsified mortgage documents on behalf of condo buyers who lacked purchasing wherewithal. Lenders in both states sustained financial damages because of resulting loan losses.

During Lilly's prosecution, Kaan was listed in federal court records as an interested party in at least one of the criminal lawsuits filed against her partner. She was never indicted.

About five years ago, federal prosecutors claimed in a civil lawsuit that Kaan served in a figurehead role for Lilly and his real estate operations. Prosecutors sought payment of penalties assessed against Lilly during the criminal prosecution.

Since then, the corporate entities that list Kaan as a managing member have focused most of their development activity on Florida's East Coast.

Last month, Kaan, operating as Bay Hamptons LLC, paid $54.6 million for 315 rental units at the Hamptons at Tampa Palms, 15350 Amberly Drive in North Tampa. That's about $173,333 a unit.

Bay Hamptons paid 55% more than the prior purchase price. The seller - an affiliate of Napa, Calif.-based U.S. Advisors LLC - purchased the property in January 2004 for $35.1 million.

To secure the purchases, Bay Hamptons obtained mortgages of $50.5 million and $5 million through Mountain Funding LLC, a North Carolina-based firm that advertises itself as a lender for real estate opportunists who need quick-closing services.

Also last month, Kaan, operating as Bay Tampa LLC, paid $51.5 million for the 452 rental units at the Crosswynd apartment community, 1502 March Cove in Brandon. That's only about $113,938 a unit.

Bay Tampa paid about 43% more than the prior purchase price. The seller - a joint venture headed by Plantation-based STW Investors LLC - acquired that property in June 2003 for $36 million.

The Bay Tampa venture mortgaged the Crosswynd property for $48 million through Mountain Funding.

Opus South closes deal

to build luxury condos

BUYER: 400 Beach Drive.

SELLER: Hamilton Partnership Ltd.

PROPERTY: 400 Beach Drive NE, St. Petersburg.

PRICE: $17,937,000

PRIOR SALE: Unavailable

LAW FIRM ON DEED: Lightsey & Associates PA, Winter Park.

PLANS, DESCRIPTION: Opus South Development LLC has closed on the property acquisition and financing necessary to build its luxury 400 Beach condominium project in downtown St. Petersburg.

An affiliate, 400 Beach Drive LLC, acquired about 2.14 acres for almost $18 million from an entity controlled by Dr. John M. Hamilton. That's about $7.2 million an acre or $165 a square foot.

The Tampa-based development firm mortgaged the property with $75.6 million in construction financing through AmSouth Bank.

With the proceeds, the firm envisions the completion of a 29-story tower, with 93 condominiums ranging in price from $800,000 and up. The plans include an additional low-rise building with condominiums over retail.

About 75% of the condos are under contract, says Jerry Shaw, Opus South's senior vice president. "We about two years away from delivery of the product," he says.

This is the second of two projects Opus South started in downtown St. Petersburg. The firm expects to complete work next February on Parkshore Plaza, a 30-story condominium tower with 118 luxury residences.

REIT pays $26 million

for east Tampa property

BUYER: RREEF America REIT II Corp. VVV

SELLER: CalEast Industrial Investors LLC.

PROPERTY: 5909 Hampton Oaks, unincorporated Hillsborough County.

PRICE: $25,750,000.

PRIOR SALE: $17,500,000 in 2000.

LAW FIRM ON DEED: Seyfarth Shaw LLP, Chicago.

PLANS, DESCRIPTION: RREEF America LLC, a Chicago-based affiliate of Deutsch Bank, has acquired about 416,694 square feet of flexible office-service space in east Tampa's Breckinridge Park.

The property is part of the 22 million square feet of industrial-office space RREEF America, a privately owned real estate investment trust (REIT), purchased last month from CalEast Industrial Investors LLC. Terms of the overall deal were not released.

In east Tampa, however, the Chicago firm, operating as RREEF America REIT II Corp., paid almost $28 million or $62 a square foot for the six buildings constructed in 1987, 1998 and 1998.

The price is about 47% more than the prior purchase price. CalEast paid $17.5 million for the property in September 2000.

- David R. Corder

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