Starwood Capital Purchase Ends SpeculationLucca Development deal fuels first-phase proposalThomas Enterprises finishes Brandon Pavilion acquisitionPublic Storage increasespresence in Brandon areaHeretick-Powell partnership closes on St. Petersburg land
Real Estate Briefs (Tampa)
Starwood Capital Purchase Ends Speculation
By David R. Corder
Rumors over the future of a prime redevelopment site in St. Pete Beach ended late last month when an affiliate of Starwood Capital Group Global LLC purchased the beachfront property.
The Greenwich, Conn.-based investment management firm, operating as St. Pete Partners LLC, bought the 80-unit Travelodge motel and almost 5.3 acres of developable land at 6300 Gulf Blvd. for $37.1 million from Clearwater's Tony Land Associates LLC. That's almost 365% more than the nearly $8 million the seller, a company controlled by Clearwater investor Tony Amico, paid in March last year for the property.
The company's plans for the site -dubbed Avalon at St. Pete Beach, according to a development prospectus obtained by Gulf Coast Business Review - include demolition of the existing improvements and development of a 541-unit, multistory condo-hotel. Those units would range from 1,000 to 2,500 square feet each, with prices ranging from $550 to $600 a square foot. About 491 units with 1,000 square feet each would cost $600,000 each. Six units with 2,500 square feet each would sell for nearly $1.4 million each.
Citing those specifications, the prospectus suggests the opportunity for total sales of almost $343 million. The prospectus lists development costs of about $210 million and sales commission of about $17 million for potential profits of about $115 million.
Under terms disclosed in the prospectus, Starwood Capital would own 75% of equity in the development. Crossgate would own 25%.
Just prior to the sale, a St. Pete Beach group - Citizens for Responsible Growth - criticized the development proposal as inconsistent with the community's tourist-driven economy.
The day after the closing an Ocala company - JBC Resort Development LLC - filed notice of its intent to foreclose on the property against Tony Land Associates, Crossgate Partners and several other individuals and companies. The parties settled the dispute a couple of weeks later.
"The parties have reached an amicable resolution," says Sarasota attorney Charles Bartlett, who represented JBC Development and its principal manager, Craig Bachrodt. "We had a contract for the acquisition of the entity that owned the land. At the time the complaint was filed they were refusing to honor it."
Starwood Capital, one of the joint-venture partners, invests in real estate on behalf of private and institutional partners such as public and private retirement funds, university endowments and foundations. Since its formation in 1991, the investment management firm has completed around 300 real estate transactions with assets in excess of $8 billion. It has created public companies that subsequently accumulated assets in excess of $20 billion.
Besides Avalon at St. Pete Beach, Crossgate Partners also is involved in two other condo projects in the Gulf Coast region. On its Web site, Crossgate Partners disclosed its involvement in the Orchid condominiums, a $44 million project with 12 luxury units on just less than 3 acres on Longboat Key.
In Madeira Beach, the Georgia company proposes the development of 68 condo units with a project value of about $22 million project. The company claims on its Web site presales of about 88%. Work already has started on 14 townhomes associated with that development plan.
Lucca Development deal
fuels first-phase proposal
Buyer: Lucca Development LLC, Oak Lawn, Ill.
Seller: Americana Gulf Motels Ltd., Clearwater
Property: 325 S. Gulfview Blvd., Clearwater Beach, multiple other properties.
PRIOR SALE: Various prices on multiple lots dating to 1968.
Law firm on deed: Feldman & Roback, Bradenton
Plans, description: Over the past year, Luke Castrogiovanni embarked on an ambitious project he calls the Mirabella condominiums.
So far it's involved the assemblage of 10 separate properties on Clearwater Beach. Late last month, he completed the most important acquisition in this effort to develop 102 condo units in a first-phase plan.
Castrogiovanni's Lucca Development LLC purchased the Howard Johnson Express Inn, 325 S. Gulfview Blvd., and Roma Motel, 326 Coronado, for about $10.3 million from Americana Gulf Motels Ltd. Earlier this year he purchased the nearby Tropicana and Albatross motels on Hamden Drive.
This summer Castrogiovanni earned city approval to build 92 condo units in a 15-story tower on the Howard Johnson site and 10 separate units on the Tropicana parcel. If all goes well, he envisions the possibility of another 49 units in phase two.
"It will be a project that occurs," he says about the 49 units. "There's only so much you can do at one time. My hope is to turn the 49 into a larger project. Right now we're concentrating on the 102."
When completed, the Mirabella project promises an amenity that no other project on the beach can offer, Castrogiovanni says.
"It's the only one with east-west views of the Intracoastal and the Gulf," he says. "It'll have a panoramic view. We spent a lot of time trying to get the project right."
While hesitant to talk about total project cost, Castrogiovanni says its should cost about $300 a unit to produce the 102 condos. However, he's bracing for cost increases because of a projected increase in building demand throughout the hurricane-ravaged areas of the Gulf Coast.
"It's a very fluid situation," he says. "Fortunately, selling prices on the beach is helping us out." Over the past several months, he says, sales of some luxury condo units on the beach have risen to almost $800 a square foot.
"By the time we go to market, we expect sales to be somewhere between $750 to $800 (a square foot)," he adds.
Thomas Enterprises finishes
Brandon Pavilion acquisition
Buyer: Fourth Quarter Properties 90 LLC, Newnan, Ga.
Seller: Bloomingdale Land Trust, Brandon.
Property: 2150 Bloomingdale Ave.
PRIOR SALE: Unavailable
Law firm on deed: Cushing Morris Armbruster & Montgomery LLP, Atlanta.
Plans, description: For years, Thomas Enterprises LLC focused on the Tampa Bay area as a growth market. No matter how hard he tried, however, the company Stan Thomas founded just couldn't find a foothold.
The Newnan, Ga.-based retail developer failed in a bid to develop in Wesley Chapel's Wiregrass Ranch development, for instance. The same was true with the company's bid for the Walters Crossings retail project at Dale Mabry Highway and I-275.
Last month, Thomas ended the drought with the $11.8 million purchase of 42 acres east of Lithia-Pinecrest Road on Bloomingdale Avenue in southeast Hillsborough County.
The company has plans to build at least 300,000 square feet of retail space in the newly named Brandon Pavilion, along with some new homes.
"We own it and are trying to get started fast," Thomas says. "In the spring we'll begin construction."
The deal just may be a harbinger, Thomas acknowledges. "We're trying to do other things in Tampa."
While this is its first Tampa-area project, Thomas Enterprises has long been a fixture in the Sarasota market. The company's land division acquired the 15,000 acres in Sarasota's Thomas Ranch, formerly Taylor Ranch. It once owned the Sarasota Pavilion, a 324,211-square-foot retail center it later sold the Inland Real Estate Group of Cos. Inc.
Over the years, Thomas Enterprises has developed and sold more than a billion dollars in assets. The company's retail division develops power and lifestyle centers. Another division develops mixed-use with a high-end hotel component. It also has a grocery-anchored retail division
Public Storage increases
presence in Brandon area
Buyer: Public Storage Inc., Glendale, Calif.
Seller: BYBB Properties Ltd., Brandon
Property: 1155 Providence Road
PRIOR SALE: $561,000, vacant, in 1997.
Law firm on deed: Goodlette Coleman & Johnson PA, Naples.
Plans, description: Public Storage Inc., the publicly traded real estate investment trust, has acquired its third mini-storage facility in the Brandon area.
The Glendale, Calif.-based company paid about $8.6 million for 112,666 square feet of space in 13 buildings at 1155 Providence Road. That's about $75.56 a square foot for the improvements on the 5.73-acre site.
The company purchased the site from BYBB Properties Ltd. and its managing member, Buckeye Mini-Storage Inc. Corporate records list Benjamin C. Yocom Jr. as its president.
As of Dec. 31, Public Storage owned 149 mini-storage facilities in Florida with about 11.4 million square feet of net rentable space. Those properties produced net income of about $40 million.
closes on St. Petersburg land
Buyer: VP Windward LLP, St. Petersburg.
Seller: Maximo Harborage Marina LLC, Dallas.
Property: 1100 Fourth St. S., St. Petersburg, multiple parcels.
PRIOR SALE: $6,012,600 in March 1999.
Title firm on deed: Equity Land Title Inc., Fort Lauderdale.
Plans, description: Ken Heretick and his partners have taken the leap. The partnership that includes him, Phil Powell, Ned Willis and Corey Carver has acquired the 3.7 acres of land adjacent to St. Petersburg's Harborage Marina.
Now the partnership, operating at VP Windward LLP, is focused on one task: presales of 62 luxury condominium units proposed at 1100 Fourth St. S. "Everything is predicated on presales," says Heretick, president of St. Petersburg's Vector Properties Inc.
Earlier this year, the partnership won a modification to the site's existing development plan. Plans now call for the development of 54 condo units in two, 11- to 12-story towers, a two-level parking garage with 173 spaces, two buildings with 28,000 square feet of commercial-retail space and a four-story building on the waterfront with 10,000 square feet of retail-restaurant space, 63 parking spaces and eight condo units.
When completed, Heretick says, build-out costs should range between $58 million to $60 million.
Although it didn't record the deed until late last month, the partnership purchased the property in August for $6.8 million from Maximo Harborage Marina LLC. The seller, a holding of Dallas-based Marinas International, operates the Harborage Marina through a master lease with the city.
The partnership financed the acquisition of the 3.7 acres with a $4.8 million mortgage through Wachovia Bank NA. Powell, as trustee of the Philip J. Powell Family Trust, signed the mortgage documents.
As of the first week of October, Heretick says, condo buyers had reserved 11 units.
He expects the number to increase quickly in response to two billboards the partnership has leased and once potential buyers recognize one of the property's selling points.
"We have the only units in downtown St. Petersburg that are on the water," he says. "A lot of units downtown have water views. Our units are right on the water."
Besides that amenity, the partnership also obtained an agreement with Marinas International that gives condo buyers a priority right to lease boat slips in Harborage Marina for one-year terms.
It was just a good time to sell, says Marshall Funk, a Marinas International managing partner.
"We own marinas around the country," he says. "As far as being developers of condos and that sort of thing, that's something we don't feel comfortable doing. We think it's a decent price and will be good for the area."
With this property sold, Funk now can focus some of his attention on the remaining 9 to 10 acres Marinas International still owns near the marina. It may be for sale at the right price.
There have been sales inquiries about that land but there are no contracts. "Nothing's eminent," Funk says.
- David R. Corder