Monday, May 21, 2018
Business

Downtown St. Pete apartment complex Beacon 430 sells for $84.5M

ST. PETERSBURG — In yet another sign of Tampa Bay's apartment boom, the 326-unit Beacon 430 complex in downtown St. Petersburg has sold for the high-end price of $84.5 million.

An Alabama-based company, B&M Management, bought the apartments at 430 Third Ave. S from the NRP Group of Cleveland.

"There was interest in the investor community for that asset, and we felt it was the right time to sell,'' Kurt Kehoe, NRP's vice president of development, said Thursday. "I believe there was no more than 45 days of formal marketing but that's not out of the ordinary for a brand-new product in a very sought-after market.''

Beacon sold quickly, he added, "because it's new and has done so well financially.''

Opened this year, the Beacon's studio and 1-, 2- and 3-bedroom apartments are 97 percent leased at a maximum rental of about $2,500, he said.

NRP built the Beacon on a parking lot that it bought for $6 million from Times Publishing Co., parent of the Tampa Bay Times. In April, NRP also bought the Times lot across the street for $3.9 million but is not yet certain what it will do with that site.

"Most likely it will be more floors, a higher building,'' Kehoe said. "Possibly condos, but more likely an ultra-luxury residential rental project.''

No construction date has been set. (The Times will have 200 parking spaces in whatever is built.)

The Beacon's sale price, which works out to $259,000 per apartment, "is among the highest we've seen on a per unit basis,'' said Darron Kattan of Tampa's Franklin Street commercial brokerage. "It falls in line with what new, Class 1 apartment communities seem to be worth these days.''

Among the Beacon's amenities are a pool, two courtyards, a fitness center, a business center, a bayview lounge and free Internet, cable and "valet'' trash pickup.

Kattan said it is not unusual for a developer to sell a project and build another nearby.

"The economies of scale in doing that are tremendous,'' he said. "You don't have to get to know a new area, they know what works.''

Downtown St. Petersburg has seen an explosion of apartment construction that began in 2011 with the 325-unit Fusion 1560 on Central Avenue. In May, that sold for $57.5 million or $177,000 per unit.

Several other apartment complexes with hundreds of units have opened or are under construction.

NRP Group, which has an office near Tampa International Airport, is exploring sites for development throughout the area, Kehoe said.

"We have a lot optimism in Tampa Bay and specifically about downtown St. Petersburg,'' he said. "We really feel that there's a lot more demand than what the current units can handle.''

Although his own office is in Orlando, Kehoe said NRP doesn't consider that city "nearly as attractive'' as downtown St. Petersburg with "its walkability, the urban lifestyle, the proximity to cultural events, the restaurants and shopping and nightlife.''

Kattan of Franklin Street predicted that the bay area apartment market will remain strong.

"The only two prominent potential hiccups are significant interest rate rising or significant overbuilding,'' he said. "I personally don't think we're seeing that yet but if everything that's in the pipeline comes through there's definitely a risk.''

Contact Susan Taylor Martin at [email protected] or (727) 893-8642. Follow @susanskate

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