Klein & Heuchan owners buys two restaurants, office tower

BUYER: DEM Enterprise LLC (principals: Mark and Steven Klein), Clearwater
SELLER: Regions Bank, as successor trustee of the Daniel A. Engelhardt Trust (50% interest) and Deborah Szoke as personal representative for the estate of Barbara Engelhardt deceased
PROPERTY: 26311 U.S. 19, N., Clearwater
PRICE: $3.65 million
PREVIOUS PRICE: $1.25 million, October 2002
LAW FIRM ON DEED: Johnson Pope Bokor Ruppel & Burns LLP, Clearwater

PLANS, DESCRIPTION: Mark and Steven Klein, owners of the Klein & Heuchan Inc. brokerage, purchased the land housing a Chick-fil-A restaurant, a 8,400-square-foot Brown Boxer Pub & Grill restaurant and a four-story, 34,604-square-foot office tower for $3.65 million.

The price equated to $84 per square foot. That figure is below the two-year average price per square foot for retail space ($146) in the Tampa Bay area, according to the CoStar Group.

The office building was 97% occupied at the time of the sale.

The Kleins have been working with the former owners, two trusts, to sell the property, and after a second contracted buyer backed out of the deal, they offered to buy it themselves. The price was the same as the previous contracted buyer had offered, says Steven Klein, vice president of Klein & Heuchan.

“We needed to do a 1031 exchange and that property fit the bill,” Klein says. “It's about a 9% [capitalization rate], but there was some rollover risk.”