Ford stays committed to Gulf Coast

The Tampa commercial real estate market is mushy as a melted ice pop, yet a hardened success story formulates every now and then.

The latest victory: A commercial landlord secured a decade-long lease extension for a tenant that occupies a 120,500-square-foot building in east Tampa. The tenant, Ford Motor Credit Co., has been in the building, Sabal Pavilion, since 1999. Newport Beach, Calif.-based KBS, a non-traded real estate investment trust, owns the building.

“This will likely be the largest lease transaction for the KBS southeast portfolio in 2011,” says KBS senior vice president and asset manager Allen Aldridge. “And more importantly it will provide stability to our occupancy and revenue for many years.”

Ford Motor Credit Co., a subsidiary of Ford Motor Co., previously extended its lease in the building to 2017, with a termination option for 2015. The option was eliminated from the latest lease agreement, which lasts through 2021.

The lease extension is also a pushback against market doldrums. Indeed, the Class A vacancy rate in Tampa was 17.3% at the end of the second quarter, according to Aldridge, although the vacancy rate in the east Tampa sub-market was only 14.6%.

The extension includes a commitment from KBS to upgrade parts of the four-story building. The exterior was repainted and sealed last year, and this year the building will get a new chiller and the parking lot will be resurfaced. Even better news, says Aldridge: “We're told that Ford has plans to expand their employee base for the building in 2012.”