Parmenter Realty Spends $85M on Westshore Office Buildings

TAMPA—Parmenter Realty Partners just snapped up two class A office buildings on Rocky Point in Tampa Bay's Westshore submarket. Parmenter paid $85 million for the office assets.

Parmenter purchased the two buildings from a fund advised by Prudential Real Estate Investors. JP Morgan provided financing. The Rocky Point acquisition includes Island Center, a 250,000-square-foot, 12-story office building completed in 1985, and Waterford Plaza, a 245,000-square-foot, 12-story office building completed in 1986.

“These assets will undergo a $1.7 million renovation which consists of cosmetic improvements of the building's lobbies and multi-tenant corridors and restrooms, replacement of the roofs, and upgrades to the building's mechanical systems,” commented John Davidson, managing principal of Parmenter Realty Partners' Southeast Region. “Both buildings have ample parking and on-site amenities that are well suited for large and small users.”

Westshore is the most prestigious and top performing office submarkets in the Tampa Bay area. Demand in the area has resulted in extensive private business expansion by the likes of AT&T, JP Morgan Chase and Blue Cross Blue Shield.

“This acquisition will be Parmenter Realty Partners' seventh purchase for Fund IV and its first in Florida,” commented Parmenter COO Andrew Weiss. “We have great confidence in the current economic conditions of Florida. Tampa specifically is benefiting from relocations and startups of the technology and biotech companies. In the last two years the Tampa Bay area has posted positive job growth, and the area's office market demand has increased for both new and expansion space. We want to be in the market as it's beginning the recovery portion of the cycle.”

Florida's largest suburban office market is now home to 76 Fortune 500 companies. Westshore is currently experiencing a 17.9% vacancy rate, stronger than the market-wide vacancy rate of 21.6%, according to Jones Lang LaSalle. Westshore's average asking rents are $24.28 per square foot by comparison with $21.02 per square foot for the aggregate market.

“Sales are happening quickly in Tampa because the timing is good for an investor to buy and it's good for some of these current owners to sell,” says Chris Butler, managing director of JLL's Tampa office. “Current owners have owned the assets for many years and they're ready to reposition them—and they recognized that cap rates are attractive and now would be a good time sell.”