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Sarasota-based Githler Real Estate Group has acquired the 11-story Northern Trust Building in the city's downtown, the latest in a series of central city office building purchases tied to an increased supply of residences and hotel rooms.
Githler's $17 million purchase of the 110,000-square-foot property, at 1515 Ringling Blvd., follows a $23 million deal for the nearby 11-story BMO Harris Bank tower by Belle Amie Anthem Realty last July and a nearly $16 million transaction involving the 55,220-square-foot PNC Bank building, in February 2016.
A fourth major downtown Sarasota office building, the 13-story Sarasota City Center now owned by Osprey S.A., of Michigan, is under contract of sale and is expected to trade before the end of this year.
“Very few Class A office buildings have as good a presentation or are in a condition to impress tenants' clients as well when they walk in the door,” says Charles Githler, president of Githler Real Estate, which acquired the 35-year-old building in a partnership with New York-based EDM Realty.
The purchase comes as Sarasota's Class A vacancy rate has shrunk from roughly 16% in 2011 to 8% today, the result of no new significant office inventory since the recession.
Similar market conditions have occurred throughout the Gulf Coast, in Naples, Tampa and St. Petersburg.
The Northern Trust Building, which is occupied by the Chicago-based bank that developed it and for which it is named, law firm Adams & Reese and others, has a roughly 18% vacancy.
Githler says that vacancy, amid shrinking inventory, should result in greater net operating income going forward.
“There's a good upside for us,” says Andy Dorr, a Githler senior vice president. He adds that at $27.50 per square foot, the Northern Trust Building's rental rate is significantly less than comparable properties seeking between $30 and $36 per square foot.
Githler plans to retain Colliers International's Grant Savage and Alfie Hamilton, who represented the seller in the transaction, for leasing and management.
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