3 towers downtown now up for sale. (Per Jax Daily Record)
EverBank Center in Downtown Jacksonville joins at least two other Downtown towers that are for sale.
Colliers International Northeast Florida CEO and Principal Robert Selton said today there has been interest in the 30-story building and that ownership believes it's a good time to market the tower.
The other Downtown towers for sale are the Aetna Building and the Wells Fargo Center.
The Colliers marketing team is Selton, Chuck Diebel, chief operating officer and principal in Northeast Florida, and Achikam Yogev, senior vice president of the South Florida office.
Selton said he was limited in the information he could share because of a confidentiality agreement, but that the building is the largest in Jacksonville and 130,000 square feet has been leased in the past 12 months.
Built in 1983, the tower at 301 W. Bay St. on the Northbank was bought by El Ad Florida LLC in 2004. The 956,201 square feet of leasable space is 86 percent occupied.
Building representative Pamela Smith said occupancy could drop to 61 percent when AT&T leaves its space in May but that she is working with prospective tenants to fill space.
The center has been for sale before. Smith said in September 2012 the ownership was talking with a prospective buyer, but the sale didn't take place.
At that time, the property was listed by CBRE. Smith said it was listed for several months but market conditions weren't right for a sale.
Smith said owners decided to list it again formally because of interest expressed in buying the building.
El Ad bought the structure for $90.9 million and invested at least $3 million into its common areas. Its 2013 certified value and its 2014 market value in progress is $42.5 million.
El Ad hired Smith as its owner representative in August 2010. Working with local real estate brokers and others, she signed EverBank Financial Corp. to lease 270,000 square feet of office space among nine of the building's 30 floors. She said EverBank now has 11 floors.
The structure was built in 1983 and owned by what has become AT&T.
In other RE News (per The Times Union)
Gate Petroleum paid $2.7 million to the Diocese of St. Augustine for 37.1 acres just south of the new Florida 9B interchange. The company said in October that it planned to purchase the property. Much of it is wetlands, but Gate intends to build a convenience store, then develop and sell the rest of the property.
Dollar Tree paid $625,000 for the former Golden City
Buffet, 779 Dunn Ave., just
west of I-95. It's 8,216 square feet, built in 1980 and last sold for $1 million
in 2003. It also got a permit to demolish the existing structure to make room for a new Dollar Tree store.
Magna Hospitality Group of Warwick, R.I., paid $26.5 million for the 177-room Hampton Inn at 1515 First St. N. and the parking lot across the street in Jacksonville Beach. It sold for $8.8 million in 1997.
International Capital of Dallas, as ACS Jacksonville LLC, paid $2.8 million for the building at 5607 Normandy Blvd. The former Goodyear service center was converted to a dialysis center earlier this year.
William J. and Patricia F. Mandel Trust of Jacksonville paid $1.8 million for the Denny's building at 8215 Dix Ellis Trail. It sold for $1.3 million in 2007. It was built in 1980 with 3,923 square feet.
Confederated Specialty LLC of Fernandina Beach paid $650,000 for the 70,176-square-foot warehouse at 3333 Lenox Ave.
PERMITS
2800 University Blvd. N., renovation of River House at Jacksonville University, $1,069,731, 4,466 square feet, GBN Construction.
1620 Margaret St., build-out for Firehouse Subs, $137,825, 2,641 square feet, BTD Contracting.
1515 Atlantic Blvd., construction of new JP Morgan Chase Bank, $1,529,706, 3,687 square feet, D.C. Ecker Construction.
4320 Deerwood Lake Parkway, interior alteration of Publix, $780,830, 43,840 square feet, HGR Construction.
12760 San Jose Blvd., interior build-out of first floor of Julington Creek Fish Camp in the former New Orleans Cafe, $150,000, 3,000 square feet, Bosco Building.
10751 Deer Park Blvd., interior alterations for Comcast Spotlight, $499,675, 8,491 square feet, Scott Contractors.
This is good news, nothing gets put up for sale when the commercial market is tanking. This is another sign that the Florida economy is coming back.
Where is the downtown Aetna Bldg?
On the south bank. The original prudential center.
Eventually the Aetna building will be consumed by Baptist. It has nowhere else to expand downtown. Their name is already on the building. I don't see condos going up to the left of the Aetna building, unless they contain doctor offices.
Quote from: mtraininjax on December 03, 2013, 08:35:50 PM
Eventually the Aetna building will be consumed by Baptist. It has nowhere else to expand downtown. Their name is already on the building. I don't see condos going up to the left of the Aetna building, unless they contain doctor offices.
You know I've thought the same thing for awhile, and I think you're 100% right. I'm a little surprised that one's even for sale. If the owners just sat on it for awhile longer and avoided signing leases with too many extension options, they could basically name their own price. Baptist has nowhere else to go but into that building, they're going to have to buy it eventually. There's a very solid play there that has nothing to do with the market value.
Gate Petroleum paid $2.7 million to the Diocese of St. Augustine for 37.1 acres just south of the new Florida 9B interchange. The company said in October that it planned to purchase the property. Much of it is wetlands, but Gate intends to build a convenience store, then develop and sell the rest of the property.
While its a good snag of cash for the diocese, I am assuming with 37 acres out of their hands, they aren't planning to open a catholic high school to support Nocatee/Ponte Vedra now.
Quote from: ChriswUfGator on December 03, 2013, 10:25:01 PM
Quote from: mtraininjax on December 03, 2013, 08:35:50 PM
Eventually the Aetna building will be consumed by Baptist. It has nowhere else to expand downtown. Their name is already on the building. I don't see condos going up to the left of the Aetna building, unless they contain doctor offices.
You know I've thought the same thing for awhile, and I think you're 100% right. I'm a little surprised that one's even for sale. If the owners just sat on it for awhile longer and avoided signing leases with too many extension options, they could basically name their own price. Baptist has nowhere else to go but into that building, they're going to have to buy it eventually. There's a very solid play there that has nothing to do with the market value.
If it's in the cards then ownership has explored the opportunity and at least engaged Baptist. Usually owners of office towers such as Aetna building aren't totally clueless to their surroundings ;)
There's almost no upside in any building downtown. The risk is so great that it almost outweighs any kind of return certain investors may be gunning for in that market.
Perhaps the "upside" for the next buyer is the prospect of Baptist expansion. It's certainly not rent growth or major cash flow, LoL. You have to sell some sort of story - plus, honestly, I don't see Baptist owning that building. I could see them "master-leasing" some space out to doctors and departments, but not owning. Plus, isn't there like tons of land around the Baptist campus already? I don't know why we are acting like there isn't a total abundance of land for new space AND parking...this is the Southbank we're talking about. Baptist is surrounded by massive surface lots, and growing hospitals tend to like to build their own new space (which Baptist has done quite a few times before...very recently :) ).
MOB (medical office) needs space for outpatient treatment and the best MOBs have surgery centers on-site (in the building, even if they are adjacent to a hospital). Reconfiguring the aged Aetna building to function as an efficient MOB could be impossible (let alone working around in-place tenants). An MOB stacking plan is usually configured in a very specific manner as different types of doctors require different and sophisticated systems (and efficiency is key since the medical industry is referral driven and being "neighbors" to your most referred doctor is important), so building new is usually ideal. As an example, it might make sense for an internist to be on ground floor and ENT to be adjacent, or a urologist to be "above" an OBGYN because of certain building systems both might use. Some types of doctors can only be in the "core" of the building based on the systems they use and the privacy they require, and some doctors have to be on the exterior for various reasons.
The thought that goes into medical office is pretty intense and it's a very specialized real estate skill set with an experiential knowledge driven small group of guys who do that sort of thing - either development, ownership or brokerage, that is IF it's not a hospital-driven and funded project.
Quote from: JaxJerry on December 03, 2013, 07:21:07 PM
Where is the downtown Aetna Bldg?
http://wikipedia.org/wiki/Aetna_Building
I'm wondering why some think Baptist will definitely buy the Aetna building. I'm not in any real estate industry but it is curious that they would consider buying an older office building versus building something on a level parking lot they already own right next to them between Palm and the FEC tracks. Also, how much more expansion will they need? Ar we to assume that in the year 2050 Baptist will occupy all space between the river and 95? Good news for the JEA and Wyndham buyers I guess.
Of course, these same people also assume that good business practice is to let leases expire and take a loss of income in hopes of selling out for a huge profit to an owner/user. Maybe I should start implementing that thinking with my rental houses. At least then I'd gain a better understanding of bankruptcy court procedure.
Nope, I believe this is good news for the local and regional economy, just in the fact that EverBank Center owners said they got no offers a year ago and have now received two unsolicited offers makes a big statement to that fact.
^It's definitely a sign that things are improving. I also don't see Baptist taking over the Aetna Building themselves until they're out of space to build new on, and that won't be for a while.
It may be awhile, but at the end of the day it's an inevitability. Real estate investments aren't measured in minutes, there is a play there.
^^^But the returns demanded in Jax, given all the risks of the market, are so high such that someone's hold period should theoretically be pretty limited (<5 years). The fact that all of these building owners have been "trapped" in their ownership for a decade or [much] longer without being able to sell and limit or get rid of their risk in the market is pretty telling.
Remember, these owners have been through it all. Multiple cycles. Constant vacancy. No rent growth (actually probably rent shrinkage given inflation). Horrible external leadership and other factors out of their control. New developments in Riverside and a solidifying of the Southside as the premier place to live and to do business in the city. These owners haven't "enjoyed" their ownership in Jax, but they have been unable to sell because it's not too hard to see all that's going on there.
Many real estate plays are very "in the moment" (as opposed to what you say). They are known as opportunistic plays (which development is by nature), perhaps value-add if you aren't looking to "hold" after you add the value. Atlanta and Chicago are two cities where office plays are very "in the moment" because both cities are development frothy and economically cyclical and unsturdy. Jax is less than stagnant or cyclical in my opinion. When rents in 1990 are $22 and rents in 2013 are $22, that's not stagnant - that's regressive. Downtown Dallas on a micro scale. I'd personally be scouting for the one building that could be or allow for the $24+ rents and higher credit tenancy with the right ownership/marketing and repositioning strategy. A truly value-add, irreplaceable building with potential to be something"great" in that market. Is that Aetna, Wells Fargo Tower, or Everbank Center? Not in my opinion.
Again, it's a case by case scenario. There are some super core deals - Markets at Town Center (retail) was one that traded this year. We even looked at it and I wish we pursued. But 90% of Jax real estate is worthless in my opinion. Buy a few large coupon clippers in DC or Boston, and increase the risk and the return profile of the fund/portfolio (open-ended in this case given horizon of entry and exit by investors) by selecting a truly [small given market] value-ADD deal in a Jax - which despite the growing secondary market status that Jax has, even value-add deals in Jax are rare because there is no rent growth and too few barriers to entry for new product. It's TOUGH.
Quote from: ChriswUfGator on December 04, 2013, 01:21:45 PM
It may be awhile, but at the end of the day it's an inevitability. Real estate investments aren't measured in minutes, there is a play there.
I don't see Baptist ever buying the Aetna building for two reasons: Jacksonville is unlikely to experience the amount of population growth in the core that would drive a huge facility expansion for hospital services in that location. Baptist apparently believes its growth will mostly come in the suburbs, as evidenced by the rapid expansion BMC South over the past decade. And buying the building would be a huge capital expenditure to house administrative functions when it can lease cheaper space in suburban buildings to house those functions.
Quote from: simms3 on December 05, 2013, 12:39:06 AM
^^^But the returns demanded in Jax, given all the risks of the market, are so high such that someone's hold period should theoretically be pretty limited (<5 years). The fact that all of these building owners have been "trapped" in their ownership for a decade or [much] longer without being able to sell and limit or get rid of their risk in the market is pretty telling.
Most commercial landlords in Jax (Flagler, Liberty, Colonial/DRA) have been long term holders, and not because they have been trapped by a cycle. It's because their model is to generate a return from building operations as opposed to being merchant builders who are looking for a quick capital gain. The returns that those owners seek (in my experience) are in the 9%-10% range, not what I consider high for real estate investments. Jacksonville is a challenging office market primarily because we have an excess supply of space which leads to rental rate compression. The only way to remedy that is for JaxUSA to recruit more jobs to JAX -- and lots of them!
I don't know how many people play in Real Estate, but the local Jacksonville market is coming back, with a roar. With 2014 coming, we shall see it easier for people to get financing, homes appreciate more, and our local market was named one of the top 10 for 2014 by Zillow. You may laugh at Zillow, but their forecasting group on hot markets is pretty dead-on.
I don't believe that Baptist NEEDS to buy the Aetna building, why does a hospital need to be in the real estate business anyway, but they can begin to move offices over there, if needed. There is plenty of parking for admin, and utilize the main buildings for patient care. Baptist has personnel scattered all over the city now, so as most corporations like to do, they may centralize operations in the years to come, or leave them where they are now.
Downtown is going to come back and there will be a need for services there too. Riverside, Brooklyn, Shipyards, there is too much going on to discount a turnaround downtown in the coming years.
http://jaxdailyrecord.com/showstory.php?Story_id=541435
^Protected Downtown waterfront location?
Just got back from a fantastic BOLD (Building Our Local Divide) Urban Core tactical kayak paddle on our trophy asset the St. Johns River our American Heritage River a FEDERAL Initiative in our new highly restricted DIA zone and took it over to the Shipyards pier among other Destinations.
What is going on with all the equipment? Total Backroom deals? Activity on a pier should be the biggest news story for Downtown. Where's the media?