Sometimes all a building needs is a facelift to beat the market. At least that's what Avison Young is hoping with the 30-year-old Westshore Center.
The commercial real estate company is in the middle of a $1.5 million project to revamp the building, updating everything from landscaping to elevator banks.
It all started when one of the building's owners, an investor from TA Associates Realty, asked if the firm could change out the lights on the walk from the parking garage to the front door. From there, the revamp quickly expanded to a complete overhaul.
Clay Witherspoon, Avison Young's principal and managing director, says it will be well worth the investment. Since the company started renovations in January, occupancy has increased from 83% to 87%. By the end of 2014, the company expects to be above 90%. Witherspoon also thinks the company will see a 15% to 20% increase in annual rental revenue from the renovations.
Nearly eight months ago, Witherspoon's 19-person commercial real estate businesses, Lane Witherspoon & Carswell Commercial Real Estate Advisors (LWC) and L&W Commercial Property Management, were acquired by Avison Young. Toronto-based Avison Young is the fastest-growing commercial real estate firm in the world, with 1,500 employees in 54 offices. The Tampa branch brought in $75 million of the company's $449 million in total transactions in 2013.
The Westshore market is one of Florida's largest submarkets and Tampa's most popular and expensive area for businesses, with an average leasing rate of $24.11 per square foot and average vacancy rate of 12.8%, according to a market report from CBRE's Tampa office.
“Westshore's success is because you have two regional malls within a mile of each other, the interstate systems and roadway infrastructures and access to Tampa International Airport,” Witherspoon says.
With 1.4 million square feet in its Westshore listing portfolio, Avison Young ranks in the top three commercial real estate companies in an area that includes 12.6 million square feet of building space.
Westshore Center is a 215,410-square-foot building across the street from International Plaza, the Container Store, and a number of restaurants. “The new generation wants the ability to walk to work and walk to lunch,” Witherspoon says.
Renovations to Westshore Center included refreshed landscaping to allow more light into the building, parking garage and walkway, new light fixtures, updated signage and a digital directory. The building was covered floor to ceiling in red granite, which has been replaced with white tile, wood accents and raised ceilings.
“You can't change an '80s building, but you can do quite a bit and rebrand the building,” Witherspoon says. Avison Young worked with Ai Collaborative and Trimar Construction on the project. “The most exciting part is how it's gone from concept to reality.”
One of the building's main draws will be the new restaurant going in on the first floor, to be announced next month. The building previously had a mom-and-pop cafe, but will now have brand recognition.
“We felt like we'd get a return on our investment with changes in the neighborhood, with an improving office market,” Witherspoon says. “With timing, we'd be able to capitalize on both of those.”
According to Witherspoon, most of the company's competition has done touch-up work to similar aged buildings, but not many have done an overhaul of this scope.
Anne-Marie Ayers, first vice president from CBRE Tampa, disagrees. “It's 'keeping up with the Jones' cycle,” she says. Renovations are “long overdue for them.” One of Avison Young's main competitors, Highwood Properties, has completed significant renovations at Tampa Bay Park, which is just north of Raymond James Stadium.
Witherspoon says Avison Young is not trying to compete with a MetWest, or a Class A building that is only 5 or 10 years old with $30 a square foot rent. Instead, it is pursuing tenants who aren't interested in paying the top end market rental rates.
One of the biggest challenges was getting people to walk in the front door, Avison Young's Vice President Lauren Coup admits. Changing the building's signature exterior red stripes to white stripes has made a huge difference. “It signals to the world that change has occurred,” Witherspoon adds.
Avison Young is hosting a grand reopening in late May to attract brokers to take a second look at the newly renovated building.
The Avison Young brand name has also attracted interest. “There are relationships that we have now that we didn't have when we were smaller. But it doesn't happen overnight,” Coup says.
Due to the acquisition, Witherspoon guesses that his office will more than double in size, adding 10 more brokers by the end of 2015. The Tampa branch is mostly focused on office and industrial, but he believes they'll soon add more retail and multifamily buildings to the company's portfolio. He also thinks the branch's focus will shift from 70% landlord representation and 30% tenant representation to an even split within the first two years.