Feldman Equities JV Buys 187 KSF Office Tower in St. Petersburg, Fla.
- Aug 08, 2013
St. Petersburg, Fla., is looking good to Feldman Equities, Tower Realty Partners and Second City Capital Partners, so the joint venture team recently acquired the 187,000-square-foot office building formerly known as Wells Fargo Plaza. The partners purchased the Class A property from an affiliate of CNL Commercial Real Estate in a transaction orchestrated by commercial real estate services firm CBRE Group Inc.
Why so keen on St. Petersburg? Larry Feldman, CEO of Feldman Equities, sees the advantages of the market, literally right before his eyes.
“There’s an actual boom going on here of about 1,500 new apartment units and there’s also a retail center under construction,” Feldman told Commercial Property Executive as he drove past one of five major construction projects in progress. “It appears that the world has really discovered a lot of the things that we know about St. Petersburg because we live here and work here, [one of which] is the fact that it offers one of the best qualities of life anywhere in the State of Florida, or the country, in my opinion. And waterfront downtown St. Petersburg is like a little slice of the Rivera.”
It could be said that the joint venture, which paid $20 million for the 17-story tower at 150 Second Avenue North, got a good deal; the property last traded in 2008 for approximately $26.3 million. Then again, the occupancy level at the building, then known as Wachovia Plaza, was 98 percent at the time, compared to its current level of 65 percent. It was Wells Fargo’s relinquishing of 22,000 square feet in June that took a chunk out of the occupancy level.
But this isn’t the first time at the rodeo for Feldman and friends, as the partners have previously orchestrated an occupancy turnaround in St. Petersburg together. The team acquired the 242,000-square-foot City Center in 2011, when the office building as just 44 percent occupied. Today, City Center is 94 percent occupied.
The partners have a tried-and-true method of filling up tenant rosters. “All of our buildings that we’re renovating today are going with a very high-end, very edgy, 24/7 fitness center, where we put in state-of-the-art machines, free Internet, free towels, and we put in restaurants with a Starbucks theme or we put in couch areas or hangout areas where you can come with a laptop and use free Wi-Fi,” said Feldman. “That’s a whole amenities package that we’re developing. Fitness center, restaurants that are sort of quasi laptop portal areas and conference room area sort of combined into one.”
It’s all about appealing to the office user of the day. “The stereotype of downtown St. Petersburg used to be that it’s a place where very wealthy people came to retire, and the reason that downtown has office space is basically for the trusts, estates, wills and probates–but that’s all been changing,” he added. “What’s happened in the last two censuses is that the average age is dropping precipitously. Now you’re starting to see younger upwardly people, and there are affluent tech companies moving into a number of our buildings. They all want this live-work-play atmosphere. It’s very tough for a lot of tech companies to attract the real quality, highly-educated IT programmers, and they find that if they can offer these people the downtown environment, they’re able to attract a better quality employee than they otherwise could get at some utilitarian building in the suburbs somewhere.”
Feldman and partners will invest several million dollars in renovations at 150 Second Ave., and they will also rely on an aggressively priced leasing program to attract tenants. Feldman will spearhead leasing and redevelopment, and Tower Realty will take on management responsibilities.
This won’t be the last time Feldman institutes its modern-day renaissance program at one of its properties. “The whole idea is to reposition all of our buildings for the next 10 to 20 years,” Feldman concluded. “We think the future is not necessarily with the banks and the lawyers, although, clearly they are certainly an important part of our market, they still occupy most of our square footage and keeping those guys happy is very important. But the growth of the future is in the tech business, so repositioning our buildings is really to attract that type of user, that 20-something, 30-something, highly educated, upwardly mobile tech worker that wants to be in a much more edgy, modern place.”