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Real Estate Briefs (Tampa)

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  • | 6:00 p.m. July 1, 2005
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Real Estate Briefs (Tampa)

Chicago Group Pays $48 Million for 390 Apartments

By David R. Corder

Associate Editor

Over the years, MCZ Development Corp. and Centrum Properties Inc. have gained national attention for its condominium-conversion work.

Centrum converted the old Montgomery Ward headquarters building in Chicago into 260 luxury condos. Together, the partnership did the same thing with the old Western Auto headquarters site in Kansas City.

A couple of years ago, the Chicago-based group ventured into South Florida's hot condo-conversion market. It converted 436 rental units into condos in Miami's Sunny Isles community. Late last year, it embarked on what is described as the largest condo conversion project in South Florida - 943 units at the Tides at Hollywood Beach in Hollywood.

Now the Chicago group has focused its attention on the Tampa Bay area. The group recently purchased 390 rental units at the Grand Reserve at Tampa Palms for $48 million with plans to convert them into condos. An on-site representative acknowledges the community no longer leases the units.

The acquisition averages out to $123,077 a unit for the luxury-style apartments in the 15, three-story buildings completed in 1998 at 16616 Palm Royal Drive in North Tampa.

To finance the acquisition, the Chicago group obtained a $49.8 million construction mortgage through Chicago-based LaSalle Bank NA and Charlotte-based Wachovia Bank NA. Each bank agreed to underwrite $24.9 million of the total loan.

The group purchased the property from an affiliate of St. Louis-based Michelson Realty Co. LLC. The St. Louis company also owns the Grand Palm Village apartments in Tampa, Summer Cove apartments in Sarasota and Polos at Brandon apartments in Hillsborough County's Riverview community.

The acquisition is the second large-scale conversion of rental apartments in just the last month or so.

Just recently Odessa-based Lakeview Development at Calusa Trace LLC paid $26 million, or about $108,333 a unit, for the 240-unit LakeView at Calusa Trace apartments in north-central Hillsborough County. Lakeview Development is a partnership between Dunedin developer Jeff Ricketts with the Odessa real estate development-consulting firm of Kampsen & Associates Inc.

Founded in 1980, Centrum Properties says on its Web site that it is one of the largest developers of Walgreen Co. stores in the Midwest.

Founded in 1985, MCZ Development says on its Web site it produces more than $1 billion in annual revenue. MCZ Development also focuses on retail and commercial construction. Partnership officials did not respond to a request for comment.

Leder Group-led partnership

invests in Pinebrooke center

BUYER: Mountain High Pinebrooke II LLC, as majority owner, Boca Raton

SELLER: Pinebrooke Joint Venture, Tampa.

PROPERTY: 1501 N. Falkenburg Road and other related addresses in east Tampa.

PRICE: $25,480,000.

PRIOR SALES: $2,702,500, from 1994-2004.

LAW FIRM ON DEED: Stearns Weaver Miller Weissler Alhadeff & Sitterson PA, Fort Lauderdale.

PLANS, DESCRIPTION: An investment group led by Boca Raton's Leder Group Inc. has paid almost $25.5 million for flexible office-service property in east Tampa's Pinebrooke Commerce Center.

Just factoring in the land, the deal cost the investment group about $22.16 a square foot.

The Leder Group, operating as Mountain High Pinebrooke II LLC, acquired a 41.2% interest in about 253,867 square feet of improved space on 26.4 acres. Over the years, the group founded by retired Boca Raton veterinarian Sam Leder has acquired numerous commercial properties mostly in the South Florida area.

Besides the Leder Group, the investors include a limited liability company controlled by members of Boca Raton's Marco Musa family. The family, operating as Musa at Pinebrooke II LLC, took a 37% stake in the deal. Marco Musa is the former president of Lake Worth-based Musa Holdings Inc., which once controlled Eyeglass World and the Laser Vision Institute.

The investors also include Lawrence Ramaekers, a Boca Raton-based corporate-turnaround specialist. He owns a 6.55% interest through Ramaekers Pinebrooke II LLC. Over the years, Ramaekers has helped companies such as Fort Lauderdale's ANC Rental Corp. and NorthWest Corp., a Sioux Falls, S.D.-based electric utility, with their reorganizations under the U.S. Bankruptcy Code.

Each of the investment groups signed on as guarantors for slightly more than $20.4 million in mortgages through Archon Financial LP and Bank of America.

The investment group purchased the properties from Pinebrooke-HG Inc., a Tampa company controlled by real estate developers Jeff Meehan and Charlie Funk. The two purchased most of the Pinebrooke properties during the mid- to late-1990s at distressed sales prices from the Federal Deposit Insurance Corp.

CB Richard Ellis brokers John Jenkins, Kyle Burd and Mark Shellabarger represented Funk and Meehan in negotiations. Citing confidentiality issues, Jenkins declined to comment.

Indiana investors purchase

Tarpons Springs apartments

BUYER: Palms of Tarpon Springs LLC, New Albany, Ind.

SELLER: Tarpon Springs Associates LLC, Tampa.

PROPERTY: 600 Haven Place, Tarpon Springs.

PRICE: $6,425,000.

PRIOR SALE: $4,300,000 in 2001.

LAW FIRM ON DEED: Abel Band Russell Collier Pitchford & Gordon Chartered, Sarasota.

PLANS, DESCRIPTION: An Indiana investment group has acquired the Cornerstone Apartments in Tarpon Springs for $6.4 million.

New Albany, Ind.-based Palms of Tarpon Springs LLC paid slightly more than $59,259 a unit for the 108-unit rental property at 600 Haven Place.

This is not the investment group's first foray into the rental apartment market, says Olympus Zarris, the partnership's managing member.

"We own several apartment properties in several states, Florida, Kentucky and Indiana," he says about the mostly family-owned partnership. "All of our other complexes are rental complexes."

That's how he intends to operate the Tarpon Springs property. "Obviously, we're aware of the condo-conversion market along the Gulf Coast and actually across the state of Florida," he says. "It's not something that we would rule out. But we are a company that values its tenants.

Besides the Tarpon Springs property, Zarris and his partners own several smaller investments in the Sarasota market.

Over the years, Zarris co-owned five radio stations in Kentucky and Indiana in partnership with his father, George Zarris. They have since divested those properties.

The investment group financed the Tarpon Springs acquisition with a $7.1 million loan through Stock Yards Bank & Trust Co., a Louisville, Ky.-based lender.

In less than four years, the 7-acre property increased in total value by nearly half. The seller, Tampa-based Tarpons Springs Associate LLC, purchased the 30-year-old property in October 2001 for $4,300,000 or about $39,815 a unit.

Michael B. Hayes of Tampa and David R. Hill of Jacksonville are listed on official records and state corporate records as the seller's managing members.

JMC Communities completes

acquisition of Sandpearl land

BUYER: Sandpearl Resort LLC and Residences at Sand Pearl LLC, St. Petersburg.

SELLER: Hunter Hotel Co., Des Moines, Iowa.

PROPERTY: 3.04 acres in the 500 block of Mandalay Avenue, Clearwater Beach.

PRICE: $15,023,285.

PRIOR SALE: Unavailable.

LAW FIRM ON DEED: Greene & Schermer, Bradenton.

PLANS, DESCRIPTION: JMC Communities has assembled the final parcels it needs to build the Sandpearl Resort, Spa and Residences on Clearwater Beach.

The St. Petersburg development company, operating as Sandpearl Resort LLC and Residences at Sandpearl Resort LLC, paid slightly more than $15 million, or nearly $5 million an acre, for 3.04 acres of redevelopment property in the 500 block of Mandalay Avenue.

"Those are the final pieces," acknowledges Steve McAuliffe, JMC Communities' vice president of sales and marketing.

Since October last year, the St. Petersburg company has acquired about 5.5 acres from Hunter Hotel Co. for slightly more than $27.5 million. The company has secured about $170 million in mortgages through AmSouth Bank and Bank of America to finance acquisitions and construction.

With financing and acquisitions complete, the company began pre-sales the weekend of June 17 for 103 luxury condominiums and the 50 condo-hotel suites included on top of a 253-room hotel.

"We opened last weekend and sold out," McAuliffe says. "We had a tremendous interest list leading up to the event. We had about 800 reservation agreements. Just to attend, though, you had to put down a $40,000 refundable deposit."

Besides the condo and hotel units, the St. Petersburg company plans to build a 10,000-square-foot spa and fitness center, more than 10,000 square feet of meeting space and 9,000 square feet of retail space.

Plans began in earnest following Memorial Day, when the Hunter Hotel owners - the Hunter family from Des Moines, Iowa - ceased operations. That clears the way for complete demolition of all structures on the 5.5-acre redevelopment area.

The St. Petersburg company expects to begin construction later this summer, with the new hotel opening in January 2007. The condos should be ready for occupancy later that spring.

Under the leadership of its founder, Mike Cheezem, JMC Communities has built more than 3,700 waterfront condos through Florida.

West Palm Beach investor

pays $6 million for 120 acres

BUYER: Equity Investments LLC, West Palm Beach

SELLER: Ilaria Ippolito, as trustee, Tampa.

PROPERTY: 120 acres along Balm River Road.

PRICE: $5,874,714.

PRIOR SALE: 1970s.

LAW FIRM ON DEED: Jeffrey C. Shannon, Tampa.

PLANS, DESCRIPTION: Equity Investments LLC has purchased about 120 acres of pasture land near Riverview for an apparent residential project.

The West Palm Beach-based investment group, headed by a David Shapiro, acquired the property for almost $5.9 million, or about $48,956 an acre, from a trust controlled by Tampa investor Ilaria Ippolito.

Efforts to reach either Shapiro or Ippolito were unsuccessful. Property records indicate Ippolito has controlled the property since the 1970s.

Along with the deed, however, Equity Investments filed a memorandum of option and development agreement with KB Home Tampa LLC. The agreement shows KB Home, an active builder in the Riverview area, has secured an exclusive option to purchase lots within the 120-acre site along Balm River and Symmes roads near U.S. 301.

No one at KB Home was available to comment.

- David R. Corder



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