A $74 Million Big Deal in Downtown Naples
NAPLES, Fla. - It’s a big deal.
It’s one of the biggest deals David Stevens, a principal with Naples-based Investment Properties Corp., has ever brokered.
How big a deal? Seven buildings and a parking lot on Fifth Avenue South in downtown Naples fetched $74.35 million.
Hoffmann Commercial Real Estate, an established real estate holding company headquartered in St. Louis, Missouri, purchased the property on Friday, free and clear of its existing debt. The rapidly growing family-owned company, with a diverse portfolio, has local ties. Its founder David Hoffmann, and his wife Jerri, live in Naples.
Hoffmann is already eyeing other buildings to purchase on Fifth Avenue.
“Our plan is to get as many buildings as we can in that area. We are a big believer in the area,” David Hoffmann said.
Most of the buildings the Hoffmanns purchased are three stories, with residences on top, and several are anchored by banks, including Wells Fargo and TD.
“These are highly stable trophy properties on one of the best known addresses in Southwest Florida — Fifth Avenue South. The objective, it seems, was to purchase these for the prestige of ownership, the high stability of income and the upside that comes with assets of this character,” said Stevens, who represented the buyer.
David Hoffmann agreed. The property was attractive for many reasons, he said, the first being the street is “world famous.” He also liked that there’s an active merchant group promoting the street.
His son, Greg Hoffmann, a principal in the real estate company, said positive press about the street also got their attention, with top rankings for its shopping and dining coming from the likes of USA Today and TripAdvisor.
“There is a vibrant community of restaurants. Restaurants are world class and the retailers are amazing. It’s just a really unique part of the world,” he said.
The Hoffmanns are already in talks with upscale retailers and high-end restaurants they hope to lure to the trendy street. As for the restaurants, two of those deals could be inked this week.
The company plans to add outdoor sculptures at all of its buildings in downtown Naples — and possibly to open a movie theater.
About six months ago, David Hoffmann said he was handed a marketing flier for the Naples property by a neighbor who knew he was involved in real estate.
Holliday Fenoglio Fowler LP, known for short as HFF, marketed the property for sale, along with the Courtelis Co. in Miami, which handled leasing and management services for the last owners.
The seller was Naples Fifth Avenue Holdings LLC, based in Miami, whose principals include Jose Hevia and Trish Blasi.
The same properties previously sold for $53 million in 2013, Collier County property records show. BlackRock, a New York-based global investment, risk and advisory company, sold them at a deep discount — after paying $77.5 million for them back in 2007.
The properties that changed hands are: 305 Fifth Avenue S., 365 Fifth Avenue S., 375 Fifth Avenue S., 405 Fifth Avenue S., 625 Fifth Avenue S., 780 Fifth Avenue S. and 900 Fifth Avenue S., along with a lot at Fourth Avenue South and Fourth Street South.
According to HFF, the buildings are 86.2 percent leased to tenants that include Berkshire Hathaway Real Estate, PNC Bank, SunTrust Bank, Starbucks, Tervis Tumbler and Provident Jewelry.
The seven buildings have 73,523 square feet of street-level retail and 48,753 square feet of offices. The lot, spanning 1.1 acres, has 115 parking spots, but the Hoffmanns already have plans to build condominiums there and possibly a small movie theater.
“We think the demographics of Florida, in particular of Naples, are going to continue to force growth,” David Hoffmann said. “And we think these are great areas to own commercial real estate in because of these demographics. We see Naples as a growing area, and continuing to be a growing area.”
The seven buildings were developed by Jack Antaramian, who died earlier this year. Antaramian, a Naples resident, was credited with helping turn the struggling Fifth Avenue South around, following the plan first laid out in the 1990s by Miami-based planner Andres Duany for mixed-use development, with a combination of retail shops, residences and offices along the street.
When Antaramian sold the properties, he told a Naples Daily News reporter, “Sometimes, people just make you a deal you can’t refuse. I think in anybody’s book nearly $80 million is a lot of money.”
At one time, Antaramian proposed building a parking garage with condominiums over top on what is now a street-level parking lot, but those plans stirred controversy.
With its latest purchase, Hoffmann arguably becomes one of the largest landlords on Fifth Avenue. The company also owns 680 Fifth Avenue S., anchored by Chase Bank, which it purchased earlier this year.
Hoffmann has now amassed real estate in three downtown areas including the North Shore of Chicago and Avon, nestled at the base of the Beaver Creek in Colorado, where it owns most of the commercial property in the older part of town.
Hoffmann isn’t the only investor eyeing Fifth Avenue South. At least two more properties on the street are expected to change hands soon, with another buyer about to close on a contract, said Stevens with Investment Properties Corp. He estimates the value of those two sales at $25 million, which would bring the total transactions to about $100 million in a matter of weeks.
“You are having this big changing of the guard,” Stevens said. “Think about it. That is a big chunk of the street.”