Commercial Real Estate

13,000 Square Foot Clearwater Lease

2010-01-12T16:06:00.000-05:00

Ultimate Medical Academy, a healthcare technical college leased approximately 13,000 square feet in the 5 story building located at 1255 Cleveland Street in Clearwater. The will be located on the first and second floors.

Brown and Brown Go Green

2009-12-15T09:08:00.003-05:00

Brown and Brown will move from their home at Colonial Center Bayside to a Hallmark Development building located at 83 Park Place Blvd. in March of 2010. Brown and Brown will occupy approximately 10,000 square feet at this new environmentally sustainable location. 83 Park place will be certified by the Green Building Council's LEED program after completion.

4200 West Cypress Sells for $24 Million

2009-11-23T10:46:00.003-05:00

The 10 story, 220,000 square foot Westshore office building formerly owned by TIAA-CREF was purchased by Highwoods Properties Inc. for $24.7 million.

It is estimated that the occupancy of the building is above 90% and has an NOI of over $3 million per year. Highwoods will look to improve the property and will be marketing the remaining office space for lease.

Highwoods, a REIT (NYSE: HIW) based out of Raleigh, NC now owns over 2 million square feet of office space in the Westshore submarket of Tampa Bay.

Belcher Commons Renews Several Medical Related Tenants

2009-11-13T12:01:00.002-05:00

Belcher Commons, located just north of Gulf to Bay on Belcher Road renewed two medical related tenants totaling approximately 5,500 square feet. Florida Dental Center and Gregory L. Dokka, D.C. PA were the two tenants who decided to continue their tenancy this 112,000 square foot office park in Clearwater. Belcher Commons is owned by Arcis Investments Inc. and was renovated by them after their purchase in 2004.

First American Title Renews in Countryside

2009-11-13T11:55:00.003-05:00

Amongst these harsh times for real estate related companies, First American Title showed their strength and committed to a 5 year lease renewal in Clearwater's Countryside Place office building. The company will occupy approximately 37,000 square feet in this 2 story building. The building located on Enterprise Rd. just East of US Highway 19 N, is located in the Countryside node of the North Pinellas office market and is one of this market's largest renewals this year.

Downtown Tampa's Tallest Building Goes Green

2009-11-13T11:44:00.003-05:00

Downtown Tampa's tallest office building received an accreditation from the Green Building Institute. 100 North Tampa was constructed in 1992 and is 42 stories above ground. Between the period of March 1 and May 31st, this building generated 311,165 pounds of trash, of which 74% was recycled. Furthermore, in order to reduce water usage, the building was reported as being retrofitted with 173 faucets, 140 toilets, 14 shower heads as well as HVAC modifications. They also changed air filters to increase the indoor air quality.

In many instances, going green can actually be profitable and rather cheap to implement. Most of these changes will provide the owners with a very short, if not immediate, payback cycle on their investment.

Humana Medical Renews their lease at Netpark

2009-11-13T11:36:00.003-05:00

Reported as one of the largest lease deals in the Tampa Bay Area this year, Humana Medical Plan Inc. renewed its lease at NetPark. Netpark, the former mall located on Hillsborough Avenue is home to some of Tampa's largest tenants. Humana's office space holds approximately 1,000 employees in 170,000 square feet. The lease is estimated to be roughly $18.5 million in value.

Westshore Mall Available For Sale

2009-10-06T19:14:00.003-04:00

Owner of Tampa's Westshore Mall, Glimcher Realty Trust has put it on the market. Glimcher owns 23 malls nationally and totals $1.6 billion dollars of debt. Westshore Mall has a debt of $91.5 million maturing in 2012 and has sales per square foot of $422.

Glimcher's preference is to sell stakes in Westshore Mall, as well as a few of its other holdings, rather than just an outright sale. Although Glimcher won't disclose a price, they are expecting to receive a value based on a sub 10% capitalization rate.

American Land Lease Signs 10,300 Square Foot Lease

2009-09-22T11:42:00.001-04:00

A 10,300 square foot office lease was signed at Highwood's 380 Park Place Building in Clearwater by American Land Lease Inc.

American Land Lease Inc. was previously located at the Northside Square office building in countryside and is also home of the Tax Collector's office.

This is one of the largest office lease deals this year in North Pinellas.

Government signs 9,998 square foot lease in Palm Harbor

2009-06-24T11:53:00.003-04:00

The U.S. Department of Veteran Affairs signed a 7 year lease at the Palm Harbor Plaza retail center located on the South-East corner of US Highway 19 North and Alderman Rd. The lease was for 9,998 square feet next to Play-it-Again Sports and is more than a 3,000 square foot upgrade from their previous space in Dunedin.

Renewals and Exercising Your Power in the Current Market

2009-06-06T13:14:00.005-04:00

For most tenants, renewal time is somewhere between every 3 to 10 years. With a market where many landlord's are facing an uncomfortable situation of instability of rent, you can ease this pressure and be your landlord's best friend while getting yourself a sweetheart deal, no matter how long you have left on your lease.

I have seen a tremendous amount of tenants renewing and signing new leases for very short terms lately. While not impossible, it is most likely that today's deals are as good as you will see for a very long time. If you feel that your business plan can support it, why not extend for at least 3 years, if not more? Just as in residential, this is most likely the best time to buy or lease real estate because sellers and landlords need you now more than ever.

By taking advantage of today's market, we lower our effective rental costs for the entire term of the lease. To get the most out of our negotiations, it is helpful to see the landlord's point of view and to customize an offer that gives you a favorable rate without harming the value of their property. It is possible to get an effective rate much lower than a landlord can afford, and still have them gladly sign across the dotted line.

It is important to know how a building is valued if you aim to make the transaction a win-win for yourself and the landlord. A building is valued based on the quantity, quality and duration of cash flow. The quality is, short of taking your company public, is very hard to change. Lets work on the duration of income as well as the quantity of income.

I have found that whether in a good or bad market, free rent is almost always and easier negotiating point than lowing the rate. Free rent keeps the rental rate intact (after the free rent period is over) so if a landlord decides to refinance or sell the building in a year or two, the building will have a higher value than if the rate was lowered (higher quantity of income). Lowering the effective rate even more in a trade for stretching out the term, still makes sense to a landlord (duration of income).

You can determine the effective rate you will pay by receiving free rent instead of decreasing the rental rate by dividing the yearly rental rate by 12. For example, if a rental rate is $16 per square foot, $16 / 12 = $1.33. Therefore, each month of free rent knocks $1.33 off of a $16 per square foot rate.

That being said, there might be some wiggle room in the rate as well, so a good combination reduced rate and free rent will give you the most benefit and the lowest effective rate.

For renewing tenants that have a few years before expiration, why not effectively lower the rate you are currently paying by offering to stretch the length of your lease in exchange for some free rent now?

Market knowledge is really the key to knowing how to structure an offer with the maximum benefit to you in a way that is still acceptable to a landlord. It should cost you nothing to consult with a trusted professional because a landlord that is seeing an increase in value should be happy to pay your representative's fees. Furthermore, these fees are an expense outside of the net income that is used to valuate a building.

Note: Free rent is not the solution for all companies. If rent makes up a large portion of your expenses and you plan on selling your company in the future, a higher rental rate may affect your sales price. I recommend always consulting with a professional that will confidentially access your current and future goals and needs and creatively align them with the landlords.

Now is the time when a tenant has the most power to negotiate. If you would like help finding the best agent for your requirements, please don’t hesitate to contact me; if I can't help you, I can qualify someone who will. You can reach me directly at 813-739-5718 or by email at srupp@prucomm.com

10 Things You Should Know Before Leasing Office Space

2009-06-04T12:07:00.006-04:00

When it comes to leasing office space, there are a lot of points that can be overlooked. Below are just a few considerations that you should be aware of that can save you invaluable time, money and future problems.

Understand your minimum square footage. This seems like a no-brainer but before doing anything you should have a good understanding of your minimum size to keep yourself from touring buildings that could never work for you.
Try to tour the space near arrival times for your employees. For most companies this is 9AM or early morning. Its important to know what parking is like when your employees will arrive. Avoid after hours showings for this reason.
Verify that the square footage quoted is correct by getting certified drawings. You can also count ceiling tiles to see if the dimensions are accurate. Most ceiling tiles are either 2'x2' if square or 2'x4' if rectangular.
Focus heavier on free rent rather than lowering a rental rate. Landlords may be more negotiable with free rent rather because decreasing the rental rate lowers a building’s value. You are more likely to get a landlord to give you a bigger discount using free rent, especially in a market with high vacancies.
Do a search for sublease space. These are harder to find if you don’t do commercial real estate for a living but you can often find subleases by typing “sublease” in google followed by your city and state abbreviation. Subleases are not always available, but if you find one, you can expect discounted rates, flexible terms and maybe even free furniture.
Rental rates need to be adjusted before comparing them. Ask if the a building you are looking for has a load or loss factor. A load/loss factor is the percentage of the building shared by all tenants of the building (lobbies, hallways and bathrooms). The square footage that you pay rent on, rentable square footage, is calculated by adding this percentage to actual square footage of the suite, usable square footage. A building with a 5% load factor at $21.75 per square foot is actually a better value than a building with a 15% load factor at $20 per square foot.
Get a good indication of market vacancy as well as how long the specific space you are looking at has been vacant. This will help tremendously with negotiations.
Get a copy of a blank lease from each site you tour even if you aren't interested in leasing there. This will give you a good idea of what clauses are “market” and which ones are unreasonable or unique to a given property. If at all possible, try to get it in a digital format for easy searching.
Understand what the building hours are (if applicable) and what after hour HVAC and electric costs are. Some buildings charge a substantial amount for this service.
Lastly, I heavily recommend consulting with a professional. If you found the above tips helpful, realize they were written by a commercial real estate agent. Aside from having genuine market knowledge, a professional will save you a tremendous amount of legwork as well as make sure that you get the best deal. Just as in residential, a buyer or tenant agent should be at no additional cost to you, so it makes a lot of sense. If you would like help finding the best agent for your requirements, please don’t hesitate to contact me; if I can't help you I can qualify someone who will. You can reach me directly at 813-739-5718 or by email at srupp@prucomm.com

SBA 504 Loans and the 2008 Stimulus Package

2009-02-19T17:38:00.003-05:00

According to Ron Reuss, President of GulfCoast Business Finance (www.gulfcoastbiz.com), the new 2008 Stimulus Package includes the following in respect to the SBA 504 loan program:

Appropriation of $100 million for loan subsidy & loan modification costs for 504 loans to cover
elimination of SBA 504 fees through September 2010, provided appropriated funds continue to
offset such fees;

Temporary elimination of bank participation fee (currently .5%) and CDC processing fee (currently 1.5%);

The SBA 504 requirement of projected employment impact will change from "one job projected
to be created per $50,000" to "one job projected to be created for every $65,000 in SBA funds"

If the project meets with SBA's public policy or community development goals, this job
creation requirement does not apply.

A SBA Secondary Market guarantee authority of up to $3.0 billion has been established to
facilitate the sale of 504 first mortgage pools. (These may be existing pools of loans, or new loans
that may be pooled after date of enactment.)

Refinancing existing debt (in an amount not to exceed 50% of the projected cost of the project financed), if;
the new loan involves business expansion
it is collateralized by fixed assets
the existing debt was incurred for benefit of small business
proceeds are used to acquire land, to construct or expand building or to purchase equipment
borrower is current on all payments of existing debt for one year
new financing will provide better terms or interest rate
new financing will be used only for refinancing existing debt, or for costs related to project
being financed

For the SBA 7(a) loan program, loan fees were eliminated and the SBA will now guarantee the
7(a) lender up to 90% of the outstanding loan.

No provisions were offered in the bill that increase the amount of SBA 504 loan nor the
amount of the 7(a) loan guarantee of $1.5 million.

500 N. Westshore Blvd sells for $20.1 million

2009-02-17T14:43:00.003-05:00

The 10 story office building built in 1984 near the corner of Westshore Blvd and I-275 sold to Orlando based Eola Capital for $20.1 million ($157 per square foot). This 90% occupied 130,000 square foot building known as Westshore 500 will increase Eola Capital's Tampa portfolio to over 1.6 million square feet.

MiLB purchases office complex for $1.57 million

2009-02-13T16:43:00.003-05:00

MiLB (Minor League Baseball) purchased the former R-Club Child Care building located at 9550 16th St in the Gateway submarket of Pinellas County. This 10,348 square foot two building office complex was purchased for $1.57 million or roughly $152 per square foot.

Tampa Festival Centre sells for $6.625 million

2009-02-13T16:36:00.005-05:00

Tampa Festival Centre, a 131,278 square foot retail center sold February 6th to Forge Capital Partners of Tampa. This center sits on 19 acres at 2525 E. Hillsborough Avenue and is anchored by mostly discount retailers. The seller was Urban America LP based out of New York that paid $5.38 million for the center in 2000.

It is estimated that this property was about 93 percent occupied at the time of sale.

Prologis Puts 33 Million Square Feet of Industrial on the Market

2009-02-09T16:18:00.005-05:00

Prologis announced that they would be putting 33 million square feet of industrial space on the market. This portfolio of properties will span across 14 states and many of the countries best industrial markets. The total value has been estimated at $1.43 billion dollars and Florida's chunk will be approximately 1.73 million square feet, with as much as 1.54 million square feet of industrial space spanning from Tampa Bay to Orlando.

Boca Ciega townhomes sell $7.8 million

2009-02-08T19:33:00.003-05:00

St. Petersburg's Boca Ciega townhome multifamily complex in St. Petersburg sold for $7.8 million (approx. $72,000 per unit). It was estimated that this California buyer paid a 9.5% cap rate for this project.

4th Quarter 2008 Office Market

2009-02-04T15:56:00.002-05:00

In a report published by the Maddux Business Report, absorption for all counties of the Tampa Bay multi-tenant office market were negative with Hillsborough County leading the decline. This report states that for every 1,000 square feet of space lost, Hillsborough was accountable for 810 of those feet. Total negative absorbtion for 4th quarter 2008 - 485,720 square feet of the 57.6 million square feet included in this survey.

Pinellas county had the least negative absorbtion out of all the other Tampa Bay counties and in certain submarkets actually had positive absorbption for the 4th quarter.

Baywalk Foreclosure Auction

2009-01-27T18:58:00.002-05:00

St. Petersburg's 130,000 square foot retail facility that occupies the space between First Street and Second Avenue North in Downtown St. Petersburg is not without it's shares of problems. After the news of its broker being accused of misappropriation of funds, this property with an original development cost of $50 million now has a foreclosure auction scheduled for February 13th.

Wells Fargo & Co. holds the $14.5 million mortgage on the property and will most likely gain possession of the property since it was recently appraised for only $12 million.

Baywalk Broker Accused of Grand Theft

2009-01-15T18:52:00.002-05:00

St. Petersburg's Baywalk Commercial Broker has been accused of Grand Theft. Howard Rosenthal of Commercial Properties Specialist is the accused but has been released. He is accused of misdirecting nearly $171,000 while he was working at Colliers Arnold. Allegations are that he was double-billing or dumming invoices.

Countryside World Savings Bank Sold - $400,000

2009-01-15T09:10:00.004-05:00

ARC Realty Services sold the former Countryside World Savings Bank office / retail building at the corner of US Highway 19 North and Sunset Point Road to William Mickle for $400,000. This all cash transaction had only a 5 day contract with 2 days of due dilligence at about $100 per square foot on this Clearwater office space.

Nationwide Store Closings up 43% for 2008 from 2007

2009-01-07T15:35:00.003-05:00

In a report released by the Costar Group, retail store closings were up 43% in 2008 over 2007. Their report showed a total of nearly 5,100 store closing with the largest closings being in home accessories and furniture at a net loss of 1,085 stores.

Countryside Pioneer Title Building Sold $1.725mm

2009-01-07T14:00:00.003-05:00

Raj Ravi and Shawn Rupp just sold the former Pioneer Title Office Building in Countryside to a dialysis clinic for $1.725 million. This building is roughly 15,000 square feet but the new owners plan on increasing its size to about 17,000 square feet. The building officially closed on December 31st, although the close had actually started November 21st. This property was a short sale and was not marketed for sale at anytime. At the time of this sale, it is one of Countryside's largest commercial office sales this year. There were a lot of hurdles that we needed to overcome, including title problems that have existed for over 20 years and over various ownership interests. Shawn Rupp and Raj Ravi of Prudential represented the buyer. Our relationship with the seller came in October when our day to day prospecting put us in touch with this motivated seller.

ICOT Building Sold - $1,000,000

2008-12-07T14:11:00.004-05:00

The 10,140 square foot office building in the ICOT office center located at 14440 Myerlake Circle in Clearwater was sold December 5th to a toxicology laboratory (AVEE.com) for $1,000,000 or $98.62 per square foot. They will be converting this property into a medical office building for laboratory use. This prime mid-pinellas office location was formerly leased to Global Mortgage (filed for bankruptcy in mid 2008). Matt Shaw, Armando Flores and Shawn Rupp represented the Seller and the Buyer was unrepresented.