Is an Atlanta company planning to sell Corporate Center at International Plaza?
By Gaurav Ghose
Atlanta-based Brookdale Group LLC, owner of six high-end office/mixed use properties in Tampa, is preparing to cash in on the high demand for office properties in a supply constrained market by putting up for sale several of its office holdings in the Southeast and Southwest in the coming weeks, according to two independent Tampa Bay area brokers.
It will be more than a million square feet of office space, the sources say, and they expect the majority of Brookdale Group's Tampa properties to be part of the portfolio.
The Brookdale Group, with Charlotte-based Crescent Resources LLC, owns and operates the Corporate Center at International Plaza in Tampa's Westshore business district and Hidden River in north Tampa. In Orlando's Central Florida Research Park, the two companies jointly own and operate the Resource Square Center. Elsewhere in Florida, Brookdale owns the Hillsboro Center in Deerfield Beach. In all, the Florida properties exceed 1.9 million square feet.
Dan Ethridge, a vice president of Brookdale Realty Services who is primarily responsible for oversight of the firm's portfolio, said he was not allowed to confirm or deny the reports.
It was not known which company, if any, has been hired by the group to negotiate the sale.
Property experts say the expected sale reflects the play of the forces of demand and supply where capital is plentiful.
"There is high demand, low product availability and capital is willing to pay high prices," John Gerlach, vice president at Colliers Arnold, said in speculating on the possible reasons for the sale.
Gerlach is not surprised at the timing of the sale, especially with interest rates slowly creeping up.
"Now is the time," Gerlach says. "Returns will not be going down ... and low cap rates will continue for some more time."
And Gerlach said he understands the rationale for the sale: a larger portfolio attracts institutional grade - those with more readily available capital - and brings in higher level of competition, thereby increasing the value. But, he says, he is not sure whether it holds true in all cases and that portfolio always sell at a premium. "It depends on the kind of assets," he adds.
Since its formation in 1994, the Brookdale Group has established five investment funds which have acquired or provided capital for the development of 54 individual properties in 25 submarkets across the Southeast, Southwest and Mideast regions. Among its larger Class A and B office portfolio in the southeast and southwest, the more prominent ones are in Tampa, Orlando and Deerfield Beach in Florida, Houston, Dallas, Plano and Irving in Texas and Atlanta in Georgia. It also owns office properties in Richmond, Va., Knoxville, Tenn., Louisville, Ky., Raleigh, N.C. and Greenville, S.C.
Co-founders Chip Davidson and Fred Henritze are chairman-CEO and president of the company respectively.