President and CEO
Feldman Equities LLC
St. Petersburg and Tampa
Larry Feldman is president and CEO of Feldman Equities LLC, an investment and development firm headquartered in Tampa with offices in St. Petersburg. Feldman and long-time collaborator Tower Realty Partners are planning to transform the Tampa skyline by early 2019 with Riverwalk Tower, a 52-story skyscraper that will be the city's tallest building.
Feldman also expects his tower, likely the first new downtown high-rise built since 1992, to be far more technologically advanced than any other structure in Tampa, with modern air filtration systems, high speed elevators and amenities ranging from a state-of-the-art fitness center to a bevy of ground-floor restaurant offerings. Riverwalk Tower, which will be built on the last undeveloped block in downtown, also will have the distinction of being the city's first truly mixed-use, ground-up project.
What's the status of Riverwalk Tower?
We closed and obtained title to the property in November 2015, after a long and extended contract that we'd negotiated in 2014, so we're moving ahead and pleased that we were able to lock in our costs of land at a good price. Since that time, we've committed to a full-blown architectural and engineering process, right down to hiring a parking consultant and conducting a wind tunnel analysis.
We're now in design development, which means we're holding weekly meetings involving some 50 people at this point. The architectural designs are stunning, and they'll live up to the expectation we promised, which is to change the skyline of Tampa. If all goes well, we expect to break ground on or before April 1, 2017 and deliver in the first half of 2019.
In the months since you first unveiled plans for Riverwalk Tower, vacancy has tightened significantly in the Tampa area and rental rates have risen. Are you worried about competition?
We really are not concerned about anything that might be built in Westshore or in downtown. Our site is such a standout in terms of location and its view corridors that it will really make everything else boring by comparison.
What's unique about our project is that from almost 360 degrees our floors will have water views. Almost every window will have a water view; that will start around the first office level,
floor eight of the building just above the garage.
Now, compare and contrast that with Westshore views — of mall parking lots or airport runways. Our tenants will be able to go for a walk or a jog or ride a bike on Riverwalk and never have to touch a city street. Plus, we're going to have three expanded restaurants on our ground floor, and it'll be a true 24/7 lifestyle. People will have their office in the building, be able to go upstairs to their condo and then downstairs to have a drink or dinner.
Are you at all concerned that you might miss the current commercial real estate growth cycle?
I think the market and the cycle is playing to our advantage beautifully. We're on the verge of an inflection point in Tampa.
In the wake of the financial crisis in 2008, vacancy downtown was about 25%. Now it's approaching 10% and in St. Petersburg it's 7%. If not for the trend toward corporate densification, it would be 3% or close to zero now. But there's a limit to how much can be squeezed out. And 60,000 new jobs were created in the Tampa Bay market last year, and our population is growing at twice the national average.
Forbes recently ranked the area as the No. 1 move-to destination in the U.S. And with no new construction, I think time is on our side. We have a two, maybe two-and-a-half-year lead time on any other downtown development, and that's significant. We can be the first to market at a time when vacancy will be 4% to 5%. When that has happened historically, there have been rent spikes — and they can happen so fast it would make your head spin.
That's what happened in Manhattan in the late 1990s, when the economy started to rock and supply became so constrained. Qualitatively, our product will be light years ahead of anything nearby, too.
When we deliver our building, we'll be 27 years ahead technologically from the last building completed downtown. We'll be renting space for $37 a foot with 10-foot clear ceiling heights, state-of-the-art indoor air filtration systems and a fabulous fitness center. Will people be willing to pay $5 per square foot more for all that? I think so.
Nationally, the forecasters believe office development will peak in 2018. Do you agree with those assessments?
When you start to see eight or nine cranes in the ground in any one area, you need to become concerned. But with 50,000 jobs a year being created in the Tampa market, you need a lot of office space just to keep up with demand. We're going to aggressively rent our space and fill the building with credit tenants on long-term leases to weather any storms when they come.
What's the biggest obstacle Riverwalk Tower faces today?
Normally you deal with zoning or permitting issues, but in this case the city has been totally supportive and everyone on staff is very excited about this project. And we're not seeking any variances of any kind.
Sure, only a fool would take two years to assemble land for a building, spend another year designing it and then another two years constructing into an uncertain economy. But we won't be sitting and trying to get the last rent dollar.
We're not waiting on any pre-leasing. We think the best way to lease the building will be to open it. Parking is also a big obstacle for many, but we've arranged for off-site parking to offset the overall parking scarcity downtown.
What's the most encouraging thing you see that could boost the project?
The more density to come to downtown I think the better off we are. If you use Manhattan as a model and a comparison, there's no denser place in America, yet they have the highest rental rate on a per square foot basis. Every building built there seems to help the next building. Critical mass seems to be counterintuitive to success, but it helps. We want to see Jeff Vinik succeed, we want to see the city succeed. We want to see more development, because it's good for everybody.