ORLANDO-It may be poetic justice that a blood bank is buying the former 108,000-sf headquarters building and the 80,000-sf warehouse of Planet Hollywood International Inc. which has been bleeding financially for the past two years.
Orlando-based Central Florida Blood Bank expects to close the $12.5 million deal with Chicago-based RREEF Funds in October. The contract calls for the blood bank to pay an aggregate $115.74 per sf for both properties.
Area construction industry estimators familiar with the property tell GlobeSt.com on condition of anonymity the 10-year-old, 90%-vacant office building on John Young Parkway and Sand Lake Road in south Orlando was erected in 1992 at an estimated hard construction cost of $10.8 million or about $100 per sf. The warehouse was built at an estimated cost of $3.2 million or about $40 per sf.
Replacement costs today for the four-story, class A office building would be about $16.2 million or $150 per sf. The warehouse, housing Planet’s movie memorabilia, could be erected today at about $4 million or $50 per sf.
That means Central Blood Bank is buying a total 260,000 sf of office/warehouse product for about $1.5 million less than the estimated original construction cost and about $7.7 million less than replacement cost, industry estimators tell GlobeSt.com.
“I would call that a very good deal for the buyer in today’s high-construction cost climate,” an executive from an Orlando general contracting firm, not associated with the transaction, tells GlobeSt.com.
Planet Hollywood sold the four-story building and 13.9 acres of adjoining undeveloped land to RREEF in 1999 for $17 million. The celebrity-themed restaurant chain leased back the building from RREEF until August 2001 when Planet moved its 90-person staff to the nearby warehouse site.
Orlando-based Fairfield Communities Inc., which calls itself the largest timeshare development company in the United States, leased the entire building to December 2001 when it moved its 600 employees into 95,000 sf for 10 years at the 187,000-sf Building 500 at GranPark at SouthPark in south Orlando. The Planet office building has been 90% vacant since that time.
Planet Hollywood was founded in 1991 by London entrepreneur Robert I. Earl and Hollywood, CA producer Keith Barish who is no longer associated with the restaurant chain.
Earl, who makes $400,000 a year after previously making $600,000, placed Planet Hollywood into Chapter 11 in October 1999 and completed a court-approved reorganization plan in May 2000.
But Planet Hollywood continued losing money and Earl voluntarily placed the company into Chapter 11 again on Oct. 15, 2001, listing assets of $121 million and liabilities of $131 million.
The company remains in Chapter 11 while U.S. Bankruptcy Judge Arthur B. Briskman awaits a final report from special fraud examiner Soneet R. Kapila.
Kapila’s preliminary investigation found suggestions of alleged insider dealings among Earl and his associates in preparing the newest reorganization plan. Earl denies any wrongdoing by either himself or his associates.
Kapila is a founding partner of Fort Lauderdale, FL-based Kapila & Co., a CPA firm.