Dearborn Towers Trades for $6M After Two Years on Market

TAMPA, FL—After more than two years on the market, Dearborn Towers has finally traded hands. The City of Dearborn, MI. sold the asset to Island Way Towers LLC for $6.3 million.

Kevin Kelleher, Darron Kattan, and Bob Goldfinger, all of Franklin Street, represented both parties in the transaction. The sales price represents $71,034 per unit and $81.37 per square foot on the Clearwater multifamily asset.

The deal has an interesting background. The City of Dearborn had owned the multifamily property since the late 1960s when it bought the asset out of foreclosure for $1 million. In recent years the property had become a financial burden on the city, which prompted the decision to sell. Dearborn is best known as the headquarters of Ford Motor Co.

“The biggest challenge was understanding how the property would perform in the future after renovation,” Kelleher tells GlobeSt.com. “Because a rental property in this type of location is very unique, it was difficult to determine what future cash flows would look like. That said, the buyer might forego a rental program altogether and convert the property to condos immediately.”

Kelleher explains that the city had Dearborn Towers on the market for two years in a  sale-by-owner set up before hiring Franklin Street. The broker secured multiple offers on the multfamily property within 10 days and the seller signed a contract with zero due diligence and a substantial non-refundable deposit.

“We received a significant amount of interest and written offers on the property,” Kelleher says. “Although, three groups differentiated themselves both in price and deal terms. A best and final was done to select the winning bid and the buyer signed a contract with zero due diligence.”
 
Built in 1962, Dearborn Towers is located at 223 Island Way in Clearwater. The eight-story property is concrete block construction with a reinforced concrete roof and offers 88 units. Dearborn Towers has its own private fishing dock, marina, swimming pool, and a community center and is located less than a mile from Clearwater Beach and one and a half miles from Downtown Clearwater.  
 
“This sale speaks to the demand for A located real estate throughout the U.S.,” Kelleher says. “Investors are looking for alternatives as other investments vehicles are currently too volatile and the safe investments are not delivering the yield people expect. We believe Florida real estate is an excellent place to put your money today for future growth.”