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The youngest of downtown Tampa's five largest office buildings are approaching two decades old, making upgrades important to maintaining occupancy. But while the others appear to be in solid standing, one could be headed for a virtual downfall.
Rivergate Tower, the 31-story cylindrical landmark situated between the Hillsborough River and the city's central business district, could be headed for foreclosure soon. Royal Bank of Scotland is suing Miami-based America's Capital Partners, saying the building's owner has not made any monthly payments since August. The bank says it is owed $48.4 million.
“To some degree, it's a sign of the times,” says Larry Richey, senior managing director of Cushman & Wakefield in Tampa. “Any building that is highly leveraged relative to its current value is a challenge.”
Richey adds that Rivergate Tower has experienced significant vacancy in recent years, affecting the building's cash flow. He says it isn't a reflection on ACP as a building owner as much as when the building was bought and how it was financed.
ACP, which customarily declines comment on pending litigation, owns several commercial properties in the Tampa Bay area and purchased Rivergate Tower five years ago for $35.5 million. The building at 400 N. Ashley Drive was originally built in 1988 for NCNB Corp., now part of Bank of America, and once boasted accounting giant PricewaterhouseCoopers and law firm Holland & Knight as marquee tenants.
Over the last decade, however, the building's fortunes have dwindled. Bank of America consolidated its downtown offices into another building bearing its name, PricewaterhouseCoopers moved out of downtown and Holland & Knight took top-floor space in the nearby 100 North Tampa building.
Even signing the headquarters of Sykes Enterprises Inc. and the addition of Malio's steakhouse on the ground floor haven't helped. The building's occupancy is currently estimated at 58% by Cushman & Wakefield.
Office brokers observe that Rivergate Tower has not undergone the same type of internal upgrades to common areas and building systems as the neighboring towers, and has long been derided for its round, awkward floor plates. More people likely know the building by its nickname, the Beer Can.
Whatever happens with Rivergate Tower, brokers say it should not reflect badly on the rest of downtown Tampa's premium office market, which has a 17.1% vacancy rate through the third quarter, according to Cushman & Wakefield. The other major buildings have vacancy as low as 12%, with 100 North Tampa recently declaring itself full.
“The activity level for upper-tier Class A buildings is still fairly high,” says Michael Hoffman, first vice president with CB Richard Ellis and a leasing representative at Bank of America Plaza. He says his building, the largest in downtown Tampa, has prospects for several large blocks of space, though mostly from tenants in other office buildings.
The white 42-story building, which opened in 1986 and is currently 93% occupied, underwent a series of mechanical and technological upgrades over the last few years to bring it up to 21st-century office standards, Hoffman says. Its owner, MetLife Real Estate, invested several million dollars in things that are apparent to tenants, though not necessarily visible.
“They want to keep it as a premier building,” he says. Bank of America Plaza earlier this year signed two new law firms as tenants, Milwaukee-based Quarles & Brady and New Orleans-based Adams & Reese.
Tampa's other institutionally owned skyscrapers appear to be in sound operating condition. Furthermore, 100 North Tampa now sports a Leadership in Energy and Environmental Design medallion from the U.S. Green Building Council.
Bank of America Plaza
Address: 101. E. Kennedy Blvd.
Stories: 42
Square feet: 762,062
Year opened: 1986
Owner: MetLife Real Estate
Occupancy: 93%
Tampa City Center
Address: 201 N. Franklin St.
Stories: 38
Square feet: 735,030
Year opened: 1981
Owner: Mainstreet Capital Partners
Occupancy: 88%
100 North Tampa
Address: 100 N. Tampa St.
Stories: 42
Square feet: 552,080
Year opened: 1992
Owner: Prudential Financial Inc.
Occupancy: 99%
SunTrust Financial Centre
Address: 401 E. Jackson St.
Stories: 36
Square feet: 527,237
Year opened: 1992
Owner: Stiles/Charter Hall
Occupancy: 88%
Rivergate Tower
Address: 400 N. Ashley Drive
Stories: 31
Square feet: 512,851
Year opened: 1988
Owner: America's Capital Partners
Occupancy: 58%
Sources: Cushman & Wakefield, Hillsborough County Property Appraiser's Office
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