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Coffee Talk (Sara/Mana)

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  • | 6:00 p.m. October 14, 2005
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Coffee Talk (Sara/Mana)

Economist talks down real estate

Real estate probably has had its run and will slow nationally, says David Jones, chairman of Investors' Security Trust Co. in Fort Myers.

"We may have peaked in June-that's the bottom line," Jones told a gathering of the Real Estate Investment Society in Fort Myers recently. Jones is a longtime Wall Street economist and friend of Federal Reserve Chairman Alan Greenspan who started a Fort Myers trust company in January 2004.

Of course, real estate is a regional business and Jones says Southwest Florida is in a good position to weather any downturn. "This region has a very good lease on life, even if markets cool off," he says. However, he said once-hot areas such as Denver have seen prices level off and it may signal the start of a slowdown in real estate appreciation.

But if the Federal Reserve raises short-term interest rates much above 4.5% from the current 3.75%, all bets are off. If that happens, Jones says a recession is likely.

Put the students to work

With construction material costs skyrocketing the group working to development the new Manatee Technical Institute campus east of Interstate 75 has a heavy budget deficit to fill. Roughly three years ago when the project was originally envisioned the cost per square foot for the 215,000-square-foot campus worked out to about $106 a square-foot. Today that cost is about $160 a square-foot. That leaves the School Board of Manatee County with an about $11.6 million difference.

Doug Wagner, director for adult, career and technical education for the Manatee County School District, says some of that cost can likely be reduced through changes to the design, but some of those additional costs will likely be paid by the school district.

A third source of income the school district will look toward is business donations for technical training equipment. Wagner says that unlike most donations, those could yield more direct future dividends in improvements to the future workforce.

The new campus is being designed by Bradenton-based Fawley Bryant Architects.

Quite possibly a big deal

Crescent Brookdale Associates LLC has assigned its ground leases in Tampa's Corporate Center at International Plaza Westshore to a European investment trust. The transfer gives the newly formed trust control over nearly 1 million square feet of Class A office space in the 15-acre corporate park adjacent to Tampa International Airport.

Details of the transfer, disclosed in a ground lease assignment recorded Sept. 20 in Hillsborough County, remain shrouded by what one source familiar with the deal described as a wall of confidentiality agreements. No one at Crescent Brookdale - a joint venture of Atlanta's Brookdale Group LLC and Charlotte's Crescent Resources LLC - or the investment trust would talk about the deal. Hillsborough mortgage documents, however, refer to what appears to be a much larger asset transfer between Crescent Brookdale and the investment trust.

Atlanta's Carter Real Estate bought the assets for the investment trust, confirms John Carter, who runs the firm's Tampa office. He would not talk about the deal, referring all inquires to the New York office of Eurohypo AG, Germany's 10th largest bank and the transaction financier. The bank did not respond to a request for comment.

The bank financed a multi-state mortgage that encumbers real property valued at about $529 million in Tampa, Orlando and outside Florida, mortgage documents show. The mortgage encumbers not only the Corporate Center ground leases but also three Class A office buildings in Tampa's Hidden River Corporate Center, three Class A office buildings in Orlando's Central Florida Research Park and several office buildings in Atlanta.

Real estate supply jumps in Sarasota, Manatee

The number of active listings for condominiums and single-family homes in Sarasota and Manatee counties has soared over the summer.

In Manatee County, the number of MLS listings in all price ranges has increased 46% - from 894 listings in June to 1,309 at the end of August. By comparison, the number of listings in August 2004 was 999.

In Sarasota County, the number of listings rose 42% in July and August, from 1,496 in May to 1,919 listings in August 2005 - up 24% from 1,543 listings in August 2004.

"We typically have more inventory in the summer months, but this is much more than we had last year," says Sue Louis, senior vice president of Sarasota and Manatee counties for Coldwell Banker. "Last year, during the summer months, it went up about 15% over the springtime inventory compared to this year."

Louis attributes the build-up of listings to the fact that transactions are not closing as fast as usual. Scott Sosso, president of Sarasota-based Prudential Palms Realty, says the build up is "refreshing" and a sign that the market may be getting back to normal.

Couldn't stay away

It took only a matter of months for FNB Corp. to decide that the slow-growth Northeast maybe isn't where its entire future lies.

The Hermitage, Pa.-based bank holding company is opening two loan offices in Florida, including one in Sarasota. It was just last year that FNB spun off a Florida subsidiary, which Cincinnati's Fifth Third Bancorp scooped up in January.

"Of the many attractive markets in the country where we might have opened successful loan offices, this Florida market offers a unique opportunity," says Stephen Gurgovits, FNB's president and chief executive.

Yeah, it's growing like a weed, still.

The $5.7 billion-asset company is re-branding its First National Bank of Pennsylvania as simply First National Bank for the purposes of opening the commercial loan production and mortgage origination offices in Sarasota and Orlando.

Sarasota resident Joseph "Jody" Hudgins, who used to head FNB's West Coast Guaranty Bank, is back to run the company's latest Florida foray. Hudgins is recruiting to staff additional loan offices in Fort Myers, Naples and Tampa.


Eric Kray, a graduate of Palmetto High School, was awarded the Lloyd Williams Scholarship for $500 from the Home Builders Association of Manatee County, which he will use to pursue building construction technology classes at Manatee Technical Institute. The scholarship fund was named after Lloyd Williams, who was a former president of the HBA and owner of locally based Bruce Williams Homes. He died in July.


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