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REVIEW SUMMARY
Property. The Towers of Channelside, Tampa
Sector. Multifamily residential condominium
Key. Holding prices with bankers' support
The Towers of Channelside couldn't be in a better location, or so it now seems. The 28-story twin condominium structures have become as much a landmark of Tampa's Channel District as the nearby St. Pete Times Forum, soon to undergo a $35-million makeover.
Besides being a huge draw for the Tampa Bay Lightning and Storm sports teams, and big-name concerts and other performances, the Forum will be the center of political attention next summer as it hosts the 2012 Republican National Convention, during which various cable and network TV channels may use the Towers as a backdrop for an entire week of coverage. Imagine calling friends across the country, pointing to a building over an anchor's shoulder and saying, “That's where I live!”
They'll have plenty of well-known neighbors who can make the same claim, from Betty Castor, the former University of South Florida president, to Joe Redner, a diversified businessman and occasional politician. It's also likely they could encounter Tampa Bay Rays baseball players Evan Longoria and Reid Brignac in an elevator or out by the pool.
The agents in charge of selling the 35 remaining luxury units at the Towers don't mind dropping names, nor do they steer away from talking about the project's past history in addressing the worries of prospective buyers.
“We had to create a new story to go with it,” says Steve McAuliffe, a broker for St. Petersburg-based JMC Realty Inc., which was put in charge of marketing the Towers a year ago. He and colleague Cheryl McCormick Brown, sales director at the Towers, have sold 103 of the 257 total units and aim to completely sell out both buildings this spring.
Seen in a different light
The Towers have been in the electronic spotlight before, showing up in the background of sports channels covering Super Bowl XLIII in 2009. But they could have as likely appeared in negative media reports about Florida's overheated condominium market, before making their own late comeback.
The four-year-old buildings at 1211 E. Cumberland Ave., once a probable location for an auction of vacant units in the statewide condo bust, are now at least 85% sold with a few solid bargains remaining from $168,000 on up. Anyone wishing to buy a penthouse for under $1 million might want to call now.
Holding the line on pricing, at roughly $200 per square foot, is a testament to the patience of the Towers' current financial sponsors, McAuliffe says. The sponsors include four banks — Wachovia/Wells Fargo, Fifth Third, M&I and PNC — as well as the Madison Group, a hedge fund.
“They were serious about selling the property,” McCormick Brown says, noting that the Towers units have come down an average of 45% from their original pricing. In some cases, discounts are even deeper: A 3,000-square-foot “junior” penthouse that previously sought $1.5 million now has an asking price of $557,000, at least 60% off.
The Towers' most-expensive unit, a grand penthouse with nearly 5,000 square feet and spectacular balcony views of downtown and the Port of Tampa, is currently priced at $899,000. Interest in that unit, and others underneath it, is much stronger at these price points in the aftermath of Tampa's downtown condo bust, McAuliffe says.
Avoiding the auction
The original developers of the Towers of Channelside, an investment group based in Plant City, opened their project in 2007 at about the same time buyers were backing out of their pre-construction contracts. They sold 89 units but few buyers actually moved in, causing the buildings to appear hauntingly dark at night.
The developers filed for Chapter 11 bankruptcy protection in early 2008, underneath the weight of a $58-million mortgage owed to Wachovia and the impending recession. They emerged from bankruptcy later that year, then turned the project over to the bank after six months.
Real estate watchers figured that the Towers units would be converted to rental apartments or sold at auction, as has happened with so many other condo projects along the Gulf Coast.
Instead, the project's court-appointed receiver tapped JMC Realty, which has far greater experience selling beachfront condos, to market the remaining units.
McAuliffe admits selling urban condos is a lot different than those on the beach, which might actually sell themselves but for the fact that someone has to be around to negotiate the price. The biggest challenge, he says, has been working around owners already in place to sell available units.
Ultimately, he says selling the remainders is good for existing residents, since pricing of the units has now stabilized and the buildings' integrity is restored.
“It's a lot better for us, better for the people who are buying and better for the people who are already here,” he says.
Interest picking back up
Local condo experts believe the Towers will be successful in selling out its units because demand is picking up among buyers seeking primary or secondary residences. The Towers' own brokers estimate less than 5% of its owners are investors looking to flip their units, and they are seeing more interest from high-level local buyers, such as doctors from Tampa General Hospital and top-ranking officers from MacDill Air Force Base.
“It's a very vibrant and viable market right now for buyers and sellers,” says Darron Kattan, managing director of Franklin Street Real Estate Services in Tampa. “People feel like we've reached a bottom and it's a good time to buy.”
Kattan adds that the Towers has the right elements for successful sales, such as a sound location, quality construction and high-grade finishes. The banks supporting the condo sales are in strong financial condition, which should be reassuring to unit buyers in the long run.
The Towers got a little extra sales help last fall in the form of buyer financing assistance from the Federal National Mortgage Corp., aka Fannie Mae. The approval allows condo projects in which the majority of new units have been sold eligible for government-backed loans, smaller down payments and a broader pool of lenders for prospective buyers.
Rather than simply putting ads in the Sunday real estate sections of local newspapers, JMC Realty put more of its marketing efforts into the Towers' website, connecting with the local Realtor community and building word-of-mouth buzz through its existing residents. Four full-time staffers, plus a part-timer, work the sales office on weekends when prospects are more likely to stop in and look around.
Two other important selling points McCormick Brown mentions, besides the lower prices, are the banks' willingness to pay past monthly homeowners association fees on units and a seven-month minimum restriction on subleases.
“It's an entirely different process than it used to be,” she says.
Timing is important in baseball, from squeeze bunts to double plays. So it goes with real estate purchases, too.
Rays third baseman Evan Longoria bought a two-bedroom condo at the Towers of Channelside right after the team's successful 2008 season, capped by a World Series appearance. He paid $415,000 at the time.
Longoria's teammate, second baseman Reid Brignac, bought a three-bedroom unit at the Towers last year but paid $366,000, at least 20% less. He got more space for less money — around $150 per square foot for Brignac, compared to $250 per square foot for Longoria.
That turned out to be advantageous post-bust timing for Brignac, who earned less than half of Longoria's $950,000 salary last year. Longo doesn't appear bothered by the difference in price, having starred in a TV commercial for ball-cap maker New Era that was partially filmed in and around Channelside.
Still, one has to wonder how often the subject comes up in the clubhouse at Tropicana Field, or whether the players might like to see a possible new stadium for the Rays built a little closer to home.
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