Apartment developer pays $3.8M for Channelside site
By Ashley Gurbal Kritzer
Tampa Bay Business Journal
Published: Sep 10, 2014

Florida Crystals has closed on the Amazon Hose and Rubber site in Channelside where it plans to develop apartments.

The all-natural sugar producer paid $3.84 million for the site, said Sean Lance, managing director of NAI Tampa Bay.

Lance represented the seller, Sarasota-based Finergy Development, in the transaction. Ryan Sampson, a broker with Eshenbaugh Land Co., represented Florida Crystals. Florida Crystals on Friday filed to rezone the property from industrial to residential usage.

Florida Crystals launched a real estate division in 2013 and has been active in the apartment sector since. The Amazon Hose site is its first Tampa deal, but the company's real estate director, Juan Porro, was the developer of The Slade, a condominium building in Channelside.

Plans are for 270 units in a seven-story mid-rise building, with a six-and-a-half story parking garage, Lance said. The apartments will be mostly one- and two-bedroom units, and the building will likely include a few three-bedroom units. The land price breaks down to $47 per square foot or $14,222 per unit.

Lance said the company is "extremely well capitalized.” The developer who went under contract on the site in summer 2013 struggled to attract an equity partner, but he said that won't be an issue for Florida Crystals, which went under contract on the property in August.

"Even though there's a number of projects announced, Florida Crystals has the horsepower to launch in a crowded environment,” Lance said.

Some of the projects under construction may convert to for-purchase units, he said, depending on demand and whether financing is available for those types of home purchases. If that happens, it would mean less competition for developers in the rental market - which makes financing easier and projects more feasible.

"I'm not 100 percent convinced that all these projects being constructed are necessarily going to pan out as apartments,” he said. "I think they're condos in disguise that have ability to underwite and fall back as apartments.”

And even if those projects remained rental properties, there's pent-up demand, Lance said, because so few apartments were developed between 2008 and 2011.

"The one caveat is where the rent numbers are going to land,” he said, "and that's how deep is the market in Tampa for product above $2 per square foot?”

Crescent Bayshore, a new apartment building on Bayshore Boulevard on the fringe of downtown Tampa, is commanding rents at $2.32 per square foot or $1,300 for a 550-square-foot one-bedroom - the highest apartment rent the city has ever seen. A high rise project that's been proposed in Channelside, Martin at Meridian, would likely need those types of rents to be profitable.

Ashley Gurbal Kritzer is a reporter for the Tampa Bay Business Journal.