Water Street developer takes out $180 million loan
By Ashley Gurbal Kritzer
Tampa Bay Business Journal
Published: Mar 11, 2022

The developer of Water Street Tampa has taken out a $180 million mortgage secured by the district's first apartment tower.

The Strategic Property Partners-controlled entity that owns Heron, which has 420 apartments and is anchored by Publix GreenWise Market on the ground floor, closed on the loan from MetLife Real Estate Funding LLC on March 7, according to Hillsborough Couty property records.

It is the 13th largest mortgage secured in Hillsborough County in the last five years, though many of the larger loans represent portfolio deals in which only some of the properties securing the loan are located here.

"We’re now at a natural evolution of Water Street Tampa where we’re refinancing our construction loans with long-term, permanent debt," SPP said in a statement to the Business Journal. "The exceptional lease-up performance of Heron helps us capitalize on the favorable financing environment. We look forward to strengthening our new and existing lending relationships as the project progresses."

The developer did not mention Water Street's second phase, but the available capital could come in handy as SPP considers its next move. In 2021, SPP filed plans with the city for the redevelopment of the Ardent Mills flour mill, which is moving out of downtown Tampa to Port Redwing after years of speculation. Those plans included 130,000 square feet of retail space, more than 2,000 residential units and 2,000 parking spaces.

Monthly rents in Heron start at $2,910 for a 563-square-foot, one-bedroom apartment, according to the property's website. Heron's apartments are split between two towers — 21 and 26 stories tall — perched atop street-level storefronts. Available two-bedroom apartments start at $4,167 per month for a 938-square-foot floor plan.

In 2021, SPP said leasing at Heron had beat its expectations before the tower finished construction. A quarter of its apartments were leased before the building opened to residents.

SPP is comprised of a partnership of billionaire Tampa Bay Lightning owner Jeff Viinik and Cascade Investment LLC, the investment fund controlled by Microsoft co-founder Bill Gates. With the financial capacity of Vinik and Cascade, SPP isn't a traditional developer that's reliant on debt. But both SPP and Vinik have strategically taken out debt in the past.

In 2019, SPP took out a $664 million loan on the towers in Water Street's first phase that was under construction at the time. Bank OZK, based in Little Rock, Arkansas, provided that loan. Vinik has taken out two loans, one for $102 million and one for $45 million, both secured by Vinik Sports Group's lease on the county-owned Amalie Arena.