Friday, November 23, 2007

Gandy gold: National retailers vying for position

Tampa Bay Business Journal - by Alexis Muellner Editor

TAMPA -- A stretch of commercial and industrial property in southwest Tampa has become one of the Bay area's market hot spots.

Just a few years ago, property along Gandy Boulevard from the bridge to Dale Mabry Highway was full of blight and neglect with more flies than customers at a few archetypical "greasy spoon" restaurants along the way. National retailers ignored it. But a handful of local investors didn't.

Risk-taking property owners are now seeing big returns on what, just a short time ago, always seemed like a "some day" market for the foreseeable future.

Not anymore.

"It's insane," said Michael Grimaldi, industrial sales specialist with Grimaldi Commercial Realty Group in Tampa. "I get 10 voicemails a day from my signs, and I can't return calls fast enough."

Land comps are now in the $45 to $50 a foot range, said several brokers with property in the area. Talk on the street has another strip center under contract for as much as $75, further escalating the market and whetting the appetite of long-time mom 'n' pop property owners. Now, national players are in the mix.

Outback has been looking, area practitioners said, and so have the locally based national scale retail specialists The Sembler Co. and DeBartolo Development.

Savior Sam

There are two main catalysts for the interest in the Gandy Boulevard corridor: the coming of a Wal-Mart Supercenter near Lois Avenue and the $20 million Florida Department of Transportation's "operational and aesthetic improvements" to Gandy that will begin early 2008.

"Everyone has been waiting for Wally. They make it sound like he's a person," Grimaldi said.

The public works effort will include a nearly 13-foot widening and repaving of the road from Bridge Street to Dale Mabry Highway on Gandy, which will make way for the addition of a 30-foot raised grass median to be landscaped with small shrubs and trees, according to an e-mail from FDOT. There also will be full median openings at Clark Avenue and at Trask Street with directional median openings at Hesperides Street, Church Street, Bridge Street and Renellie Drive.

Clearwater-based Pepper Contracting Services Inc. has the job and is expected to begin work on Jan. 1.

Wal-Mart is trying to be a part the resurgence that's going on in the area, as the company talked to residents at the Gandy Neighborhood Association and other civic associations before even submitting plans to the city, Vettel said.

"We're trying to make sure what we do ties in," Vettel said. "For the most part, most of the residents we talked with were pleased to see something coming in there. There's not a Super Wal-Mart that's convenient to the South Tampa area. The neighborhoods around there, they see this as a positive addition to their community."

Following rooftops

Numerous residential units off Interbay Boulevard, south of Gandy, and the arrival and completion of WCI's Westshore Yacht Club has changed the whole perception of being south of Gandy, said Mark Rubio, owner of Reel Properties in Tampa.

Sales there keep coming, he said, noting three home sales last week. Resistance to change, and specifically Wal-Mart in the neighborhood, came only from people who didn't want jobs or change, Rubio said.

"What else is going to come in and provide 300 jobs," he said. They aren't the highest paying jobs, he said. "But it's my tenants that will be working at Wal-Mart, and Target and Sam's Club," said Rubio who also has several nearby apartments in his portfolio.

The uncertain future of New Port Tampa Bay hasn't had too much of an impact, he said. Developers recently returned all deposits and are considering options, including a sale. New Port was planning just fewer than 1,300 residences, but the property is zoned for 1,750 residences and 240,000 square feet of commercial use just southwest of the intersection of Gandy and Westshore boulevards.

"Historically, the first people who do a big development don't make it," he said. "The same thing happened at Tampa Palms, and while it's not a perfect analogy, it was all about market timing."

The redevelopment of the massive Georgetown Apartments is very close, as area practitioners said hundreds of tenants are gone and demolition is a month or two away. A Fort Lauderdale group headed by developer Jim Motta paid $125 million in April 2005 for the property on West Shore Boulevard north of Gandy. Developers have planned to replace the 624-unit Georgetown Apartments with 1,249 homes, including 90 canal-front houses with boat docks and 99 community boat slips.

Starting a project the scope of Georgetown is a risk in a down market, said Rubio, but a calculated one. By the time the project is finished, area improvements will have taken hold and the market could be back, he said.