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Commercial Real Estate
Business Observer Thursday, Jan. 2, 2020 4 months ago

Top Deals 2019: Tampa Bay

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Portfolio sales spur record transactional volume of nearly $837 million in 2019.
by: Kevin McQuaid Commercial Real Estate Editor

While the Gulf Coast’s two other submarkets saw the total dollar value of their top transactions slip dramatically in 2019 from the previous year — the result of a lack of signature asset sales — the Tampa Bay area’s fortunes improved significantly.

Although it is an admittedly unorthodox bellwether, the top five commercial real estate sales of 2019 generated a total dollar volume of a record $836.95 million in 2019 — a surge of 28% vs. the prior year’s total.

And while at least some of the increase can be attributed to the area’s top deal, a nearly $226 million trade involving a premier hotel and linked office building, all five of the largest sales were impressive in their own right.

Though the hospitality sector maintained its status as having the top sale in the Tampa Bay area for the third consecutive year, several property sectors were represented in 2019, including offices, apartments and industrial space.

Office properties took three of the five top slots, a departure from recent years when apartment trades occupied many of the top spots, though a lone multifamily rental project did make the list.

 

 

1). Grand Hyatt Tampa Bay/Baypoint Plaza: $225.75 million

 

The Gulf Coast’s largest commercial real estate deal of the year was the purchase of an adjacent hotel and office project by Boca Raton IP Capital Partners and Chicago-based GEM Realty Capital Inc.

The duo’s deal for the 444-room Grand Hyatt Tampa Bay and 11-story Baypoint Plaza is expected to result in a greater collaboration between the two properties going forward.

Jason Isaacson, an IP Capital founder, says the firm intends to integrate the hotel and office building in a substantive way.

The 265,976-square-foot office building, completed in 1984, was 92% occupied at the time of the sale. The adjacent 14-story hotel was delivered in 1986.

The pair also plan to renovate lobbies, bathrooms and common areas, and expand meeting and group business space in the Rocky Point hotel.

IP Capital and Gem Realty acquired the two properties from UBS Realtyy Investors Inc., of Hartford, Conn.

 

 

2). Crosstown Center: $199 million

 

Phoenix-based JDM Partners, whose principals are among Arizona’s largest developers, bought the two-building Crosstown Center in August from developer and tenant USAA.

The Texas-based financial advisor and insurer to the U.S. military built the 9519-9527 Delaney Creek Blvd. buildings, in Brandon, beginning in 2015 to house as many as 1,200 employees.

Under signed leases, USAA is expected to remain a tenant in the 521,824-square-foot complex through at least 2032.

The larger of the two office buildings, at six floors, also contains amenities such as a café, fitness center and health care clinic. Its companion building was completed earlier this year.

JDM, which comprises partners Jerry Colangelo, David Eaton and Mel Schultz, is the developer of a 33,800-acre master-planned community known as Douglas Ranch in Arizona.

The trio also have owned several sports teams, including the NBA’s Phoenix Suns, Major League Baseball’s Arizona Diamondbacks and Phoenix Mercury of the WNBA. In addition, the trio have developed stadiums and centers to house their teams.

 

 

3). WeWork Place/Westshore Center/Cypress Center I, II, III: $157.1 million

 

A joint venture between Orlando’s Parkway Properties and Partners Group, of Switzerland, acquired five office buildings in downtown Tampa and the Westshore district for $157.1 million.

The portfolio included the 19-story WeWork Place downtown at 501 E. Kennedy Blvd.; the 11-story Westshore Corporate Center at 600 N. Westshore Blvd.; and a trio of buildings on Cypress Center Drive.

In all, the handful of 1980s vintage buildings contain 756,138 square feet. The package also includes a six-acre, undeveloped parcel capable of holding a roughly 200,000-square-foot office building.

Parkway and Partners acquired the collection from New York-based Angelo, Gordon & Co. and Commercial Florida Realty Partners, of Boca Raton. Since buying the buildings beginning in 2015, Angelo, Gordon and Commercial Florida had invested more than $13 million to make improvements in atriums, lighting and amenities.

At 501 E. Kennedy St., co-work giant WeWork began occupying three floors in the building earlier this month.

 

 

4). Icon Harbour Island: $131.5 million

 

Olympus Property, a Fort Worth, Texas-based investment firm, bought the 21-story Icon Harbour Island apartment tower in downtown Tampa in November for $131.5 million.

The purchase from Miami’s Related Group marked a record per unit for multifamily rentals in the Tampa Bay area, at nearly $387,000 per door.

The 340-unit tower, at 301 Harbour Place Drive, was completed by Related Group in 2017. It is adjacent to the $3 billion Water Street Tampa neighborhood being developed by a joint venture between Tampa Bay Lightning owner Jeff Vinik and Cascade Investments LLC, an investment firm controlled by Microsoft Corp. founder Bill Gates.

Icon Harbour Island, which features amenities including a private dining room, a wine cellar, a swimming pool and fitness center, was 93% occupied at the time of the sale.

 

 

5).  Amazon fulfillment center, Ruskin: $123.6 million

 

Industrial Logistics Properties Trust, a Newtown, Mass.-based real estate investment trust, acquired Amazon’s Ruskin fulfillment center in May for $123.6 million — the second time in the past three years that the 3350 Laurel Ridge Road property had been sold.

The 1.02 million-square-foot distribution center, part of a larger portfolio sale that involved 18 industrial assets sold by Cole Office & Industrial REIT Inc., marks Industrial Logistics’ first major Florida purchase. In all, the company owned 300 properties containing nearly 43 million square feet in September.

Amazon began occupying the building after USAA Real Estate completed it in 2013.

As part of the deal, Industrial Logistics absorbed a $57 million mortgage that was outstanding on the property.

Logistics assets have become increasingly popular with investors as consumers acceptance of online shopping and delivery has gained traction, and as buyers demand faster delivery of goods they order.  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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