JV Sells Office Asset Near Tampa for $40M

The St. Petersburg, Fla., property commanded twice the price paid by Convergent Capital Partners and Denholtz Associates only two years ago.

By Barbra Murray

490 First Ave.
490 First Ave.

Two years after acquiring the office building at 490 First Ave. in St. Petersburg, Fla., Convergent Capital Partners and Denholtz Associates have sold the approximately 240,000-square-foot property. Lincoln Property Co. acquired the asset for $40 million, according to a Tampa Bay Times article.

The Class A office destination is roughly 20 miles across the bay from Tampa and occupies a single acre in the heart of downtown St. Petersburg. The property consists of three connected structures, one of which is an iconic building developed in 1924. Convergent and Denholtz had owned 490 First Ave. since acquiring it in a $19 million sale-leaseback transaction with Times Publishing Co. in 2016. The deal allowed the Tampa Bay Times to maintain its headquarters in the building under an approximately 110,000-square-foot, 15-year lease.

After taking ownership, Convergent and Denholtz immediately commenced a $9 million renovation program. Today, 490 First Ave. is 65 percent occupied by a bevy of tenants, including Bank of the Ozarks and Taylor Media, which signed a lease for approximately 22,000 square feet in 2017. “This sale highlights the successful completion of the renovation project, which will provide Florida’s wide range of dynamic and growing businesses with the ideal space to call home in downtown St. Petersburg,” Steven Denholtz, CEO of Denholtz Associates, said in a prepared statement.

490 First Ave.
490 First Ave.

Commercial real estate services firm CBRE represented Convergent and Denholtz in the disposition of 490 First Ave. through Dale Peterson, Zachary Eicholtz, Courtney Snell and Kelley Matheson leading the effort.

St. Petersburg is on the rise

The Tampa/St. Petersburg office market continues to shine brighter on the investment community’s radar. CBRE’s 2018 Investor Intentions Survey shows that “several Tier II and even a few Tier III metros were ranked significantly higher than last year,” as investors maintain their pursuit of core-plus/good secondary assets.

The Tampa/St. Petersburg market jumped from the 15th position on the list of top ranked metros for investment, to a spot in the top 10. According to the report, markets like Tampa “rose substantially in investor interest this year, not only for their superior current yields (higher cap rates) than the majors, but for the single most important factor of all—higher projected office-using job growth.”

Images courtesy of Denholtz Associates