• Fri. Dec 9th, 2022

Commercial Real Estate Brokerage Selection Rolls Sarasota Businesses Business Observer


Sarasota County is on fire for hiring a Tampa commercial real estate brokerage to market its aging headquarters – a move that is expected to result in a multi-million dollar sale and one of the county’s largest new office buildings since a decade.

Following the selection of brokerage firm Colliers, commercial real estate brokerage firms in Sarasota complained that the county had failed to consider or interview other potential representatives.

“Local knowledge is a critical part of understanding the nuances of selling real estate assets,” says John Harshman, president of commercial real estate company Harshman & Co. Inc., based in downtown Sarasota for more than three decades. .

COURTESY PHOTO – John Harshman is President of Harshman & Co. Inc., based in Sarasota.

“In my opinion, Sarasota County would be better served if its marketing team for the administrative office site included a broker with a deep understanding of the large commercial real estate market in Sarasota.”

Sarasota County officials declined to be interviewed by phone for this story, and officials barred Colliers agents Paul Carr and Todd Tolbert, who work on the mission, from being interviewed.

In a prepared statement, Director of Planning and Development Services Matt Osterhoudt said “Sarasota County has worked with Colliers on a number of real estate activities over the past few years.”

For example, since 2019, Colliers “has developed a comprehensive strategic plan for affordable housing and served as the county advisor for affordable housing submissions” for the property at 4644 N. Tamiami Trail; evaluated a proposed lease for a new office for the county medical examiner on Fruitville Road; and analyzed the bids for the property at 2501 Dr. Martin Luther King Jr. Way.

Municipalities such as Sarasota County have the flexibility to bypass typical procurement processes and retain suppliers for services if they are already engaged with them on other projects.

Colliers, on the other hand, has worked with many municipalities on statewide real estate issues for many years.

But Jag Grewal, partner of Sarasota commercial real estate brokerage firm Ian Black Real Estate, says the county should have gone through a methodical selection process like the cities of Venice and Sarasota did in selecting real estate advisers.

“It appears to be a faulty process,” Grewal says.

COURTESY PHOTO – Jag Grewal is a partner with Sarasota-based commercial real estate company Ian Black Real Estate.

Ian Black, who founded the eponymous brokerage firm, agrees that local knowledge is invaluable and paramount.

“We have been practicing our trade in Sarasota County for many years,” says Black. “We are locals with local knowledge. I respect Colliers, but I don’t know if Colliers can say that.

Black adds that he has worked several times with commercial real estate brokerage firms in the Tampa area on transactions related to Sarasota.

“We are put on a list because of our knowledge of the local market,” he says.

The Sarasota Counties and Manatee Association of Realtors is also expected to conduct a formal investigation regarding the selection of Collars.

Harshman notes that companies such as Colliers – a publicly traded company that operates in 67 countries, generates annual revenue of $ 3 billion, and has more than 18,000 professionals – are often selected for outsized assignments due to their size and their ability to reach a multitude of potential buyers. .

He argues, however, that modern technology has leveled the playing field of the proverbial commercial real estate.

“Technology has helped debunk the myth that you have to employ a large regional or national real estate company to have large assets,” he says. “With technology, all brokers can access buyers around the world. However, what is not easily accessible is the in-depth knowledge of the market which can only be learned by spending time in a market.

COURTESY PHOTO – Ian Black is the founder and partner of Sarasota-based commercial real estate brokerage firm Ian Black Real Estate.

Collars, in marketing materials for County Administrative Property at 1660 Ringling Blvd. and adjacent lots, does not indicate an asking price.

County officials, in their statement, say a formal “invitation to negotiate” will be sent to potential buyers next month. Submissions are expected to be reviewed by county commissioners in late August.

An appraisal found that the 5.3-acre administrative property is worth around $ 23 million, but opinions on the value have varied widely – from around $ 15 million to $ 40 million.

The large difference in amounts is largely the result of different calculations regarding the number of residential units that could be built under the City of Sarasota building code.

The difference in numbers occurs because the property is governed by three different zoning classifications, which dictate the number of units per acre that could be built.

Any buyer of the property is expected to seek to raze the office building and develop residences on all three plots, in part because upkeep of the existing building would be prohibitive.

County officials have said the 48-year-old 1660 Ringling Building will require at least $ 32 million in upgrades until 2031 to maintain.

The building also does not meet current building codes for its ability to withstand strong hurricanes.

The six-story building, which was previously a GTE operations center, has served as the county’s main administrative district since 1995.

Last summer, the county hired Sarasota-based Sweet Sparkman Architects and Interiors and DLR Group designers in response to a public request for bids to assess the building and explore issues surrounding a possible relocation.

In the months that followed, the county focused on moving its administrative offices to county-owned land on Cattlemen Road in northern Sarasota County and near other county offices.

In a presentation earlier last month, county officials said a site at 1301 Cattlemen Road could accommodate a four-story, 120,000-square-foot building and parking for more than 300 vehicles – with land for future expansion.

The initial stages would cost around $ 72 million, an amount that would likely require a referendum as it exceeds the spending limit contained in the county charter.

If a vote approves the spending and a sale of the Ringling Boulevard property takes place, a new county administrative building could be ready for occupancy in the summer of 2025, officials say.

At 120,000 square feet, the new building would be one of the largest new office structures developed in Sarasota County in the past decade.

Sarasota County also hopes to lease its current offices to the buyer for up to four years, the Colliers marketing material says.

Like the property’s offering price, however, the county’s rental rate during this period is not listed. The offer says the county would pay a “market” rate that would be “negotiable”.

Under current net rental rates for office space in Sarasota, such a commitment would generate between $ 2 million and $ 3 million per year for the buyer.

County officials appeared to telegraph the ultimate fate of the Ringling Boulevard and Morrill Street properties last year, in their request for architectural services.

“The site of the existing administration building may have more value if it is used for another purpose,” the county said.


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