Friday, August 28, 2009

Proscenium Saga Continues

Just when you think you've seen it all, along comes the following:

Lien involving Proscenium targets land owners

By KEVIN L. McQUAID

Published: Friday, August 28, 2009 at 1:00 a.m.

Owed nearly $370,000 for design work on the ill-fated, 18-story Proscenium real estate project, a New York architect has filed a construction lien in circuit court for repayment.

But Perkins Eastman Architects PC is not going after the handful of limited liability corporations that are tied to the planned $1 billion project in downtown Sarasota and controlled by developer Zeb Portanova.

Nor is the firm suing Portanova, who is now liable for millions of dollars of unpaid debts to Proscenium lenders, contractors and consultants.

Instead, Perkins Eastman and law firm Shumaker Loop & Kendrick LLP are attempting to encumber the 20 property owners whose seven acres of land that had been slated for the Proscenium and its centerpiece Waldorf-Astoria Hotel -- even though the owners' involvement with the deal ended in May when their sales contracts lapsed.

The filing, in circuit court in Sarasota County, has sparked outrage among many of the property owners.

"They're just trying to play Russian roulette to see if anyone blinks," said Bob Johnson, an attorney representing one of the property owners.

Perkins Eastman, which claims it did $695,347 worth of work on its overall $12.83 million Proscenium contract, notes the property owners were "contract vendors" to a Proscenium group, 400 Tamiami of Sarasota LLC. Under Florida's lien law, vendors may be liable for debts incurred in some cases.

Attorneys for Florida Studio Theatre Inc., which owns 1245-1285 Fifth St., and property owner Cynthia Conway, do not believe the architectural firm's unpaid fee is one of those cases.

In an Aug. 24 letter sent to Shumaker Loop -- the firm that recently acquired Sarasota Abel Band law practice -- attorney John Patterson described Perkins Eastman's filing as a "fraudulent lien."

"The Claim of Lien is totally without merit," Patterson wrote to Shumaker Loop attorney Christian Van Hise. "I would like to assure you that our clients take this matter very seriously and will pursue it accordingly."

Steven Yates, a Perkins Eastman spokesman, declined comment, as did Van Hise.

Neither Portanova nor his attorney at the Williams Parker law firm, Will Schlotthauer, returned calls or e-mails for comment.

For property owners, the lien blocks any potential sale or major renovation until it is satisfied.

Victor Calderon, who owns a shopping center at 1222 Fifth St. and is planning to renovate it, said the lien put his efforts on hold.

"I had attracted a couple of tenants, and this blocked it," Calderon said, adding Thursday that his property was removed from the lien after he threatened a counter-lawsuit.

"I don't think it's unreasonable, after all that's been said and done, to be able to move on from this," he said.

Portanova, his ex-partners Gary Moyer and Karen Cook, and Proscenium partnerships had promised to pay property owners $300 per square foot for their land, bounded by U.S. 41, Fourth Street, Sixth Street and Coconut Avenue. At that price, the land would have brought at least twice the market value.

To keep the deal alive while financing could be arranged, the Proscenium partners even paid land holders roughly $5 million in purchase options.

But this spring, when it became increasingly clear that financing would not come, Portanova secretly began negotiating to acquire a 15-acre tract that had been the site of the Sarasota Quay, at 401 N. Tamiami Trail, for roughly $40 million. When the land holders discovered it, they broke off talks with Portanova. To date, Portanova has been unsuccessful in completing the Quay deal with lender Anglo-Irish Bank plc.

"To me, this is like the body that keeps coming out of the coffin," Johnson said. "It's like something out of a science-fiction horror movie. Every one of the land owners now has to pay somebody to clean up the mess that was created for no reason by Perkins Eastman."

Sunday, August 23, 2009

Sarasota Industrial Activity Up This Month

Finally some good news for once.

The local Catylist (commercial listing service) is showing 4 different industrial sales transactions occurring last week. The largest, a 40,000SF warehouse in Venice, went for $49PSF. Another, a 20,000SF metal warehouse with 2.3+ acres, and frontage on I-75, went for a strong $75PSF. A 14 year-old 7,500SF freestanding metal building on Porter Lake went for $80/ft. Finally, a 6,500SF building off of US301 sold for $80/ft. The final building was noted in my recent YouTube Video as being vacant. Glad to see that got sold. (Video has been noted).

I'm certainly heartened by the strong PSF numbers obtained on the last three properties, which averages just shy of $80/ft. Any week with 70,000+SF of sale absorption is a great one in my book.

Hopefully we'll see another round of these soon.

Tuesday, August 18, 2009

More Bad News

Yeah, yeah...we know, we know.

Leased Another One - 6,400 SF to National Tenant

Boulder, CO-based Camp Bow Wow (CBW) finally moved into their new digs: a 6,400 sf air-conditioned ILW-zoned property fronting 17th Street. ILW was the only favorable zoning that could accept a dog-daycare facility without a special exception.

CBW sunk nearly $150,000 worth of capital improvements into the landlord's building. We wish them and the landlord all the best! I was glad to help them.

Monday, August 17, 2009

Local Company Absorbs 50,000 Square Feet

See? All's not totally dead around here. There are at least some bright spots here and there.

Firm rents more warehouse space on McIntosh Road

By Michael Braga

Published: Monday, August 17, 2009 at 1:00 a.m.

In the midst of the toughest market conditions that anyone can remember, the Meridian Development Group has pulled off a coup.

The Clearwater company, which owns and manages a giant, 910,000-square-foot warehouse complex on McIntosh road in Sarasota County, has convinced a local bandage manufacturer to sign up for 50,000 square feet.

ASO Corp., the subsidiary of a Japanese corporation that has made adhesive bandages and other wound care products in Florida for 25 years, is one of those rare companies with the ability to expand in the middle of a recession.

"This is an expansion," said Steven Kossoff, Meridian's managing director. "In Sarasota, there were only two facilities that were large enough to meet their needs."

ASO's choice came down to price and amenities, Kossoff said.

"We have a fully fenced facility with 24-hour guard service and high ceilings that allow for more stacking," Kossoff said.

When pressed for details about price, Kossoff would only say that the lease rate was lower than the $5.50 per square foot the company had been asking in the past.

"It was lower than we've historically seen, but it was not too terrible," Kossoff said, especially in market conditions in which warehouse owners are getting clobbered.

Calls to ASO's headquarters in the Sarasota International Trade Center were not returned.

LINK TO ARTICLE

Sunday, August 16, 2009

Sweet! Drive-by Video Makes the GCBR


The video about industrial vacancy made the Gulf Coast Business Review last week. It's been busy, so I apologize for neglecting to post this when it came out.

The article appeared in the "Coffee Talk" section and was entitled "A Depressing Drive Around Town."

Hopefully people found the video informative and useful. I know many of my clients have been appreciative of the information

In case you haven't seen it...CLICK HERE.

Friday, August 14, 2009

RIP, Colonial Bank

Actually sold them quite a bit of property over the past few years. BB&T likely to take over. RIP.

SAN FRANCISCO (MarketWatch) -- Colonial BancGroup Inc. may become the largest bank failure so far this year.

Shares of Colonial /quotes/comstock/13*!cnb/quotes/nls/cnb (CNB 0.41, -0.06, -11.94%) dropped 12% to 41 cents before being halted Friday morning. News of the looming takeover was reported by Bloomberg News and The Wall Street Journal's online edition.

BB&T Corp. /quotes/comstock/13*!bbt/quotes/nls/bbt (BBT 28.01, +2.21, +8.57%) is expected to take over the Montgomery, Ala.-based bank as early as Friday in what would be the biggest bank failure of 2009, Bloomberg reported, citing an unidentified source close to the matter.

The deal will be supported by the Federal Deposit Insurance Corp., Bloomberg and the Journal reported.

In Washington, FDIC spokesman David Barr declined to comment.

Shares of BB&T rose 5% to $27.08.

Colonial Bank "is probably a manageable purchase although we expect some losses from the purchase," said Egan-Jones Ratings, a rating agency that's paid by investors rather than issuers, in a statement Friday

Thursday, August 13, 2009

Leased Another One

Congrats are due to Jobs, Etc for taking on 3,500sf of space at 5755 N Washington for their summer vocational and training program. The building just happened to be a perfect fit. I still have another 4,000 or so feet left in this building. Just goes to show that multifaceted marketing and having an aggressive landlord will do wonders in this kind of market. Judging by the number or properties I'm showing as of late, leasing activity is not totally dead.

Tampa Industrial Vacancy Up

The latest report from Cushman Wakefield shows a noticeable gain in industrial vacancies the Tampa Bay area. Some eye-popping numbers: the area market shed almost 54,000 jobs, nine consecutive quarters of vacancy increases and six consecutive quarters of declining rents. Link to the article and FREJ is below.

TAMPA - The Tampa industrial market continued to weaken in the second quarter of 2009 primarily due to the decrease in industrial-related jobs and the sustained deficit of demand from tenants in the market looking to lease or buy space.

Since mid-year 2008, the Tampa Bay market lost a total of 53,900 positions, with the construction industry losing 13,800 positions, manufacturing employment decreasing by 6,800 jobs and trade, transportation and utilities losing 2,700 jobs. The negative job growth, coupled with the current economic slowdown has resulted in a continued lack of new and expansion leasing activity, increased vacancy and a decline in rental rates during the quarter.

Additionally, sales activity has been nearly non-existent due to the dip in prices buyers are currently willing to pay and their difficulty to obtain financing.

At the close of the second quarter, Tampa’s industrial market fundamentals continued to grow weaker, following the trend which began over a year and a half ago when the national and local economy both took negative turns.

For the ninth quarter in a row, overall vacancy throughout the market increased. The marketwide overall vacancy rate of 9.5% at the close of the second quarter of 2009 increased a full percentage point from the initial quarter of 2009 and increased an astounding 3.4% from the vacancy documented at mid-year 2008.

As can be anticipated with such a significant increase in vacancy throughout the market, overall absorption posted negative 623,026sf over the past three months, bringing the year-to-date total to negative 943,309sf. Although the current negative absorption total appears dramatic, when compared to the year-to-date total recorded this time last year, year-to-date 2009’s negative absorption increased just 107,207sf or 11.5%.

The feeble tenant demand currently being experienced in the market has resulted in a decrease in asking rents for the sixth straight quarter, bringing average asking net rental rates down to levels that haven’t been recorded in the market since the first quarter of 2006.

Marketwide, the direct net asking rental rate averaged $5.95 psf at quarter-end, a decrease of $0.41 psf since last quarter and $1.10 psf from this time last year. Warehouse/distribution space, which accounts for 70.4% of the industrial space in the Tampa market, experienced the largest decrease in asking rents, declining $0.44 psf since last quarter and a much more substantial $1.09 psf since this time last year to an average of $4.89 psf by the end of the second quarter of 2009.

Forecast

Clearly, this economic downturn has lasted much longer than originally anticipated. While much of the fallout in the industrial market can be traced to companies tied to the construction and manufacturing sectors, Cushman & Wakefield believes that the fallout from these segments is largely, if not almost completely, behind us.

Though the effects of the prolonged slump in the economy will continue to have a negative impact on the market well into 2010, current industrial market fundamentals are definitely favoring tenants in the market. Competition between landlords will continue to drive down asking rents and increase lease concessions, decreasing the tenant’s effective rental rate costs over the term of their lease.

Article Link

Saturday, August 8, 2009

Two More Banks Seized

Two more down.

Two Sarasota banks are seized and sold
Community National to reopen today, First State on Monday, as Stearns branches

By Michael Braga

Published: Saturday, August 8, 2009 at 1:00 a.m.

Regulators on Friday shut down First State Bank of Sarasota and Community National Bank of Sarasota County, two institutions that played in risky loans during the real estate boom and crumbled when the bubble burst.

The two banks, with a combined $560 million in assets, will reopen as branches of St. Cloud, Minn.-based Stearns Banks, which agreed to take over nearly all the failed banks' assets and property.

Community National's four branches are slated to open today under Stearns' ownership; First State's nine on Monday.

That is good news for a region already buffeted by the closings of Manatee County's First Priority and Freedom banks.

Though Community National and First State will be operating under new management, it is likely that Stearns will need some of the banks' more than 150 workers to operate in its first foray into Florida.

Finding a buyer also is easier on regulators, who have closed 71 federally insured banks so far this year. The two Friday closings bring to six the number of Florida banks that have been shuttered.

"We are very grateful that we found a buyer with the financial wherewithal to do this," said Linda Beavers, the FDIC's regional ombudsman. "It makes our job a lot easier."

Rather than sending deposit checks back to customers, regulators will simply have to account for the deposits and then transfer them to Stearns, a bank with nearly $1 billion in assets and seven branches in Minnesota and Arizona.

But shareholders for both banks were wiped out. First State's shares, which traded on the Nasdaq, was selling for 33 cents on Friday. Volume was more than three times normal the average.

Analysts fully expect more failures this year.

LINK

Thursday, August 6, 2009

YouTube Video Makes The News

Nice to see the YouTube video has received some positive feedback, not only from clients but also from the media.

One thing this particular reporter asked me was if I had any resistance to new listings. That's a tough question to answer. My immediate thought was "yes, I am resistant to taking on new industrial listings." Upon reflection, however, it's genuinely true that good buildings priced right will still move. I suppose it depends on the circumstances. There no real "correct answer" with respect to pricing at the moment. Tough to say what the market will bear, especially if the market is pretty much AWOL. So that leaves everyone's pricing a wild guess at best - so few recent comparables are available that we have to extrapolate from various sources (i.e., whatever comps are available, rents, construction costs, etc) to arrive at something that makes sense. Even then, we can still be off. Without any response from potential buyers, it's still tough to judge. But the fact is good buildings will move if marketed correctly.

From The Bradenton Herald this morning.

Anthony Migliore, a Realtor for Coldwell Banker Commercial, closed on a deal involving a 56,000-square-foot facility in Palmetto last year, but says for the most part his listings have been tough to move.

Migliore also fears there’s plenty more inventory to be added.

He published a video on YouTube.com that examines industrial vacancies in Manatee County. The Realtor produced the video for his blog in an effort to be more creative in marketing the properties.

“If there is any positive sign, it’s that if you’re a business looking for industrial space it’s a good time to move,” Migliore said. “The biggest challenge on the sales end is there is still disconnect between sellers and buyers. Sellers, they want to maximize their return and try to get as much as they can in fairness.”