TAMPA — Downtown's iconic "Beer Can" building recently sold for about $22 million in a foreclosure sale after fetching $35.5 million during the real estate boom in 2005.
Palm Beach County-based In-Rel Properties bought the 31-story cylindrical office tower at 400 N Ashley Drive from the Royal Bank of Scotland. Royal seized the tower in February from America's Capital Partners of Miami after it defaulted on a $48.4 million loan.
In-Rel Properties, according to its website, owns and manages about 6 million square feet of office and retail space in the United States. Twenty-two buildings are in Florida, including Manatee Village in Tarpon Springs and Plaza 66 shopping center in St. Petersburg.
An In-Rel spokesman was traveling to Tampa on Wednesday and was unavailable to comment.
The building, also known as Rivergate Tower or the Sykes Enterprises tower, was nearly 38 percent vacant at the end of 2010. The 515,965-square-foot tower fetched about $42 per square foot, about a $25 drop per square foot from the 2005 sale. The $22 million sale is a fraction of the $49.5 million price tag in 2000 and $123.2 million in 1988.
Call center company Sykes Enterprises is the building's principal tenant and its name appears at the top of the building. It also houses the Tampa Downtown Partnership and Malio's Prime Steak House.
The building's taxable value is $26 million, Hillsborough County records show. In Tampa Bay, no similar-sized buildings are for sale.
Commercial real estate values are on the upswing in Tampa.
In Tampa, the price of Class A space, the most desirable property, climbed from $139 per square foot in 2004 to its peak of $210 per square foot in 2007. The figure dropped to $129 in 2009 and rose to $164 in 2010, according to data from Cushman & Wakefield, a commercial real estate firm.
The price is at $182 this year.
Mike Davis, executive director of Cushman & Wakefield, has been involved in two of Rivergate's earlier sales. Royal Bank tried selling the mortgage on Rivergate Tower before foreclosing on the property.
"This sale is not typical of commercial real estate values in Tampa," he said. "This was a distressed sale."
Although experts predicted the demise of commercial real estate a few years ago, it never happened. There are several reasons why large towers haven't been sold or lapsed into foreclosure. Davis pointed out that lenders are more willing to work with commercial borrowers to restructure loans, low interest rates have enabled borrowers to reduce payments and some businesses are expanding and demanding more for space.
Values, he said, should continue to rise as demand increases. "They've come back from the trough," he said.
Mark Puente can be reached at [email protected] or (727) 893-8459. Follow him at Twitter at twitter.com/markapuente.