When the Sundial shopping center was listed for sale last week, real estate developers in Tampa Bay and others familiar with the project weren't surprised.
It wasn't the first time developer Bill Edwards had listed the property for sale. But this time it took, leaving the future of downtown St. Petersburg's only shopping center in flux yet again.
"The Sundial is unique and iconic. Bill Edwards poured a lot of money to turn it into a beautiful property," said Mike Milano, managing director of retail services for Colliers International in Tampa Bay. Milano was the broker who sold the former BayWalk complex to Edwards in 2011. "The challenge will be to find a buyer who recognizes the value of a property like this."
Real estate brokers say it could take some time to sell a property as unusual as Sundial, which has been open just shy of two years. Outdoor lifestyle centers are a mixed bag when it comes to performance — earlier versions of Sundial struggled, as did downtown Tampa's once-iconic waterfront entertainment district, Channelside Bay Plaza. And new ownership can come in many forms, though those in the industry expect another savvy businessperson to take interest or a private capital investment firm that could sell the center again at a profit in a few years.
"Private capital can be a broad range of folks, from high-net-worth individuals like Edwards or private companies," Milano said. "The catch will be to find someone who appreciates an iconic property and aren't just buying it for an investment. That would probably be the best situation."
Edwards bought the property in 2011 for $5.2 million when it was known as BayWalk and overrun with security issues and had only a few tenants. After investing in a significant renovation, it opened in late 2014 with a slew of national and local tenants, including brands such as Lululemon and White House Black Market.
"I know what I feel it's worth, but I want to see what the rest of the world thinks it's worth," said Edwards, who declined to elaborate on a ballpark price he would accept. "If I get that price, I'm a fool not to take it. If the market's not there yet, then I'll keep doing what I'm doing."
Edwards added that Sundial tenants were doing well and business has been strong.
The 85,357-square-foot complex, which includes a movie theater, gourmet market, two high-end restaurants and a mix of stores, will be marketed unpriced with a "call for offers" on Sept. 1 by Chetek Group of Marcus & Millichap.
Jackie Zumba, owner of Jackie Z Style & Co. and more recently Ansley Z Kids Co. in Sundial, was surprised to hear the shopping center was for sale. Zumba was among the first tenants when the complex opened. In April, she bought LOL Kids and replaced the children's store with Ansley Z Kids Co.
"I was unaware of the sale. I would be sad if there was new ownership, because I love having Bill as our landlord," Zumba said. She described Edwards as "cool and down to earth."
"He really cares about our success, and it shows by how much money and time he has put into this place," she said.
The Chetek Group claims average tenant sales at Sundial hit $480 per square foot. Zumba says her business has been booming since she relocated to St. Petersburg from a major mall in Sarasota.
But Faith Hope Consolo, a high-profile New York City retail broker Edwards hired early on as a consultant at Sundial, said sales are mediocre.
"That's a decent return, but it's half of the national average," said Consolo, who is the chairman of the retail group with Douglas Elliman Real Estate. "Clearly, he is ready to cash out."
Consolo said she thinks the next owner will need to understand the Florida market and how competitive it can be. The Sundial advertisement says the center is 100 percent leased. Lululemon was the first tenant to vacate in February. The yoga retailer opened up a 900-square-foot showroom with a short-term lease to test the market. It did not relocate elsewhere in St. Petersburg.
It's unclear if Sundial has been a moneymaking venture for Edwards. As of last year, tenants were paying an average rate of $32.50 per square foot in rent. Compare that to Beach Drive, where rents are anywhere from $29 to $40 a square foot.
Locale Market, the high-end grocer and restaurant headed by celebrity chefs, is perhaps the most popular of the anchoring tenants, but it had to tweak its concept and change staff.
"There are more local tenants there than national," Consolo said. "The trends in retail change so quickly. It's going to take someone who really understands the landscape there and can make it different than International Plaza or someplace else in Tampa."
St. Petersburg boosters say Sundial plays an instrumental role downtown for residents and tourists.
"The Sundial brought much-needed retail to downtown. It was always a great place for restaurants and art, and Bill helped us bring retail back into the environment, as well," said Chris Steinocher, president and CEO of the St. Petersburg Area Chamber of Commerce.
"This seems like a natural progression of things. I do think that all retail has somewhat of a life cycle to it, but I think the Sundial brings something unique and unexpected to St. Pete."
Contact Justine Griffin at [email protected] or (727) 893-8467. Follow @SunBizGriffin.