Flurry of office tower sales signifies downtown Tampa ‘time has come’
It’s been a banner year for downtown Tampa’s office market.
Three towers have sold — Fifth Third Center sold for $47 million, Tampa City Center fetched $128 million and at the end of November, the Wells Fargo Center traded for $78 million.
Driving those deals is a multifaceted dynamic, investment brokers say. Higher prices and lower returns in bigger cities have created more investor in interest in secondary markets like Tampa, where investors still see potential for upside. But investors have also come to believe in the market itself, besides how it compares to its larger counterparts.
“There’s no way anybody plunks down $70 million if they don’t believe in the market,” said Mike Davis, executive director of the capital markets group at Cushman & Wakefield of Florida Inc. “It’s not just running from other markets. There’s increased demand for quality product in [central business districts] nationally, and Tampa has been a slower market to recover than others in the state in terms of the CBD. I think it’s time has come, and investors want to get out of ahead that.”
While the aggregate sales numbers are impressive, the pricing per square foot on each of the towers is well below what it would cost to build them — giving the investors who bought them a sense of security that it will be years before they have to compete with a brand new building in the urban core.
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