- July 26, 2019
Denholtz Properties, a New Jersey-based developer and investor with properties in that state, Florida and Pennsylvania, has acquired a nine-building office portfolio near the Tampa International Airport for $26.54 million.
Thompson Center becomes Denholtz’s largest area purchase since the company sold 490 First Ave. South, in St. Petersburg, to a Lincoln Property Co.-led partnership in late 2018 for $39.35 million.
There, Denholtz and Convergent Capital Partners invested $13 million in improvements to the eight-story office building following the duo’s $19 million purchase in 2016.
Unlike 490 First Ave., however, the 225,651-square-foot Thompson Center is nearly fully occupied — at 95% — vs. the 46% committed the downtown St. Petersburg building was at the time of purchase.
Thompson Center’s key tenants include retailer Home Depot, BayCare, Eckerd Youth Alternatives, Terracon and Keller. In all, 29 different businesses occupy the park.
JP Josephson, Denholtz’s director of Florida acquisitions, says Thompson Center was attractive because of the area’s job and population growth, and because of the project’s location and price at $115 per square foot.
“This is exactly the kind of property Denholtz is drawn to,” Jospehson says. “It’s a multitenant, infill location, and the airport submarket couldn’t be hotter. On top of that, we believe we bought at a significant discount to replacement cost.”
Josephson adds that Denholtz does not anticipate major capital improvements to the 5455 W. Waters Ave. property in the near term, save for some exterior painting, landscaping and perhaps window upgrades.
The project may be renamed, however, to reflect both the new ownership and to enhance its individual brand in the suburban Westshore submarket.
Denholtz acquired Thompson Center from an affiliate of First Industrial Realty Trust, which had owned the property for more than two decades since buying it in 2017 for $7.88 million, according to property records.
Commercial real estate brokerage Cushman & Wakefield Executive Managing Director Rick Brugge and Vice Chairman Mike Davis represented First Industrial in the transaction.
“It’s a good, well-located property in a land-constrained area that will generate a solid cash-on-cash return for this investor,” Brugge says of Denholtz’s Thompson Center deal.
Josephson says Denholtz anticipates owning the property for many years to come.
“The property is in very good shape, thanks to First Industrial. They’re a fantastic owner, and given the visibility and location, we believe this is a very solid opportunity and one we expect to hold for a long time.”
In all, Denholtz owns more than 1.5 million square feet of commercial space currently in Florida.