St. Pete Smitten

Third Lake Capital could invest in a lot of places — and has — but the company has a special affinity for St. Petersburg, the city across Tampa Bay from its home base in downtown Tampa.

In June, the 4-year-old investment firm acquired St. Petersburg's tallest building, Priatek Plaza, for $65.75 million, with plans to spend considerably more to renovate and improve the 28-story tower.

That deal followed its financial backing of what will be the city's tallest structure, a 41-story, mixed-use skyscraper known as One St. Petersburg, when it is completed next year.

“It's incredible to us what St. Petersburg has become, and we think the city still has a lot of runway in terms of growth and potential,” says Ken Jones, Third Lake's president and CEO.

“The city leadership and the community have done a very good job of cultivating an atmosphere of a vibrant place that somehow has managed to go undiscovered for quite some time. We're big believers.”

At Priatek Plaza, Third Lake -- an investment firm controlled by the Wanek family, owners of the Ashley Furniture chain — is planning a series of improvements to the 305,370-square-foot building that will result in upgrades to the lobby, tenant amenities and finishes that will cost millions of dollars.

“It's truly one of the best buildings in all of St. Petersburg or Tampa, in our opinion,” Jones says. “The building has great bones, and the reproduction cost today would be incredibly expensive, with all the high-end finishes, the stone and the copper especially, that's in there.

“Typically, we seek out high-quality assets to buy, and we want to own buildings that are best in their market, and we feel we have that in Priatek,” Jones adds. “We're hoping to improve what's already a really good asset.”

The 27-year-old tower, formerly known as One Progress Plaza, was completed in 1990 by Florida Power & Light. Today the building is roughly 76% occupied by investment firms Raymond James Financial and Merrill Lynch, the Bank of Tampa, iQor, law firm Trenam, and others.

Jones says Third Lake is currently evaluating potential plans for a roughly one-acre tract adjacent to the 200 Central Ave. building, but that no determination has been made as to the future of the site.

Former owner Kucera Properties floated the idea of developing as many as 300 apartments, an 80-room boutique hotel and hundreds of additional parking spaces on the land.

“We didn't undertake the investment opportunity at Priatek as anything other than an office building,” Jones says. “So right now, we have no plans for that surface lot.”

Nearby, at 100 First Ave. N., plans are set and construction well underway on One St. Petersburg, a $300 million project for which Third Lake has provided equity funding.

When completed next year, the Kolter Group-developed skyscraper will contain 253 upscale condominiums, 17,000 square feet of ground-floor retail and restaurant space. An adjacent 13-story building, containing a 174-room Hyatt Place hotel, is slated to open in early autumn.

“They've been a fantastic partner,” says Bobby Julien, Kolter Group's CEO, of Third Lake. “And clearly they have a much bigger presence in St. Petersburg than they did three years ago.

“We think, and they agree, that One St. Petersburg will be a great asset for that market. The deal there has gone really well, we're very pleased with the condo sales and the reception the hotel has gotten so far, and that's helped, but beyond that, Third Lake has been a great partner to work with.”

Relations between the two have gone so well that Third Lake has provided funding for another Kolter project, a 19-story, luxury condo development being built on Singer Island, at 5000 N. Ocean Drive.

“We consider Kolter to be a great organization all around,” says Jones. “They are truly best in class. And in St. Petersburg, they saw a lot of what we saw in terms of the potential. They're building an iconic tower, and just as importantly, offering a lifestyle.”

And while others might elect to invest elsewhere after buying in to two of a city's top developments, Third Lake remains open to future endeavors in St. Petersburg.

“To the extent that other opportunities present themselves, we'll probably be in line bidding on them,” Jones says. “We put our money where our mouth is. All options are on the table.

“We're fairly thoughtful, though, and we're not wedded to any one particular asset class or classes. Each individual deal has to make sense before we commit.”