Realty Capital Strategy Clicks on Hard-To-Sell Tract

They had netted zero takers among potential timeshare and hotel developer buyers for a 25-acre tract their client, Perdido Gardens Development LLC, was trying to sell on scenic Perdido Key, heavily damaged by September's Hurricane Ivan.

So instead of targeting resort developers for the Florida Panhandle property near the Alabama border, the brokers changed course and advised the owner to redesign the tract and submit the development application to Escambia County planners as a residential subdivision encompassing 94 townhomes and single-family residences. The existing zoning allowed for a density of five dwelling units per gross acre or about 123 units.

The strategy paid off. The owner initially was asking nearly $5.3 million or $210,000 acre. After 19 months on the market, the tract brought Perdido Gardens Development $5.4 million or $216,000 per acre. The sales price equates to $4.96 per sf or $57,446 per lot for 94 lots sized 85 feet by 47 feet. "Two serious buyers came forward with offers above the asking price," Realty Capital's Dotherow tells GlobeSt.com. The developer picked buyer Benton Perdido No. 1 LP's offer.

The single factor that drove the land sale was the entrance of WCI Communities of Bonita Springs to the Perdido Key area, Dotherow says. WCI, a major multifamily and resort developer in the Southeast, acquired 400 acres in receivership adjacent to the 25 acres the brokers were trying to sell. The Lost Key golf course was part of the 25-acre package.

"The emergence of WCI as a master planned community developer to Perdido Key caused an increase in demand for developable land sites," Dotherow says. Re-packaging the 25 acres as a residential subdivision instead of a timeshare or hotel site also placated elected officials, the broker says.

"Feasibly, this was the safest approach, considering the eminent moratorium [Escambia County] had on entitled dwelling units on the Key due to concurrency issues," Dotherow says.

In unrelated deals, Realty Capital also closed a 22,209-sf office renewal at Major Center Plaza I at 5728 Major Blvd., across from Orlando Universal Studios. The tenant, United Self Insurance Services, signed a five-year lease at an estimated aggregate rent of $2.2 million. Brock and David Wright of Realty Capital represented the tenant. Sean Wescott and Jeff Pasqualetti of Emerson International negotiated for the landlord.

On the industrial side, Realty Capital senior associate David Wright negotiated a three-year, 10,000-sf warehouse lease for owner Mesar LLC at 299 Rio Dr. in Orlando. The estimated value of the deal is $90,000. The tenant was Colonial Paper Co.