Virginia firm snaps up four office buildings near USF campus

A Richmond, Va.-based company has acquired a portfolio of four office buildings near the University of South Florida campus, in Tampa, for $25 million, according to Hillsborough County records.

Real Estate Value Advisors (REVA) bought the University Business Center and Oakview Center buildings from Taurus Investment Holdings LLC, a Boston-based firm founded in 1976 with offices in the U.S., Greece, Argentina, India, Turkey, Germany and Canada.

The four Class B offices, at 3011, 10441 and 10421 University Center Drive and 13101 Telecom Drive, respectively, total 227,316 square feet.

Built between 1996 and 2002 by developer Opus, the four buildings were 99% occupied at the time of the late-December purchase by Quest Diagnostics and homebuilder D.R. Horton. Taurus had owned the formerly distressed properties since 2012.

“We primarily look for investments that are single-story, with large floorplates and credit tenants and these assets fit the bill,” says Real Estate Value Managing Partner Steve Sadler. “We also were able to acquire them at a price we found to be attractive.”

The four buildings also provide tenants with five to seven surface parking spaces per every 1,000 square feet of office space, which far exceeds the industry standard for suburban office projects.

“The investor in this case can look forward to stable returns because of the tenant mix, and that also made the project very financeable,” says Dale Peterson, a senior vice president at commercial brokerage firm CBRE Inc., who worked on the transaction together with Courtney Snell and Roxanne Kemp.

CBRE, which represented the then-seller when Taurus bought the portfolio seven years ago, also secured financing with Bank United in the Real Estate Value sale.

Jeff McFadden, a Taurus managing director, described the portfolio as a “successful value-add investment,” in a statement.

Real Estate Value’s purchase comes as numerous developers in the Tampa Bay area, including Strategic Property Partners (SPP), Bromley Cos., Vision Properties, Cousins Properties and others are contemplating or actively working to build new, Class A office space.

Many tenants flock to Class A space to take advantage of modern amenities and systems, despite typically higher rental rates. Bromley Cos.’ Midtown Tampa office space, for instance, is expected to carry asking rental rates in excess of $40 per square foot. Class B rental rates, by comparison, are often about half that amount, depending on age, location and amenities.

“With Class B and B-plus product, you have opportunities without having to pay too much,” Sadler says. “And we’ve found there are always companies that don’t really want to pay $35 or more per square foot for their office space. That’s been our m.o. since 2005, when we started.”

Sadler adds he believes the competition from newer, more expensive office space would be “entirely favorable” for the Oakview and University Business Center buildings.

“I expect it will pull all the rents in the area up because of the new inventory,” Sadler says.

He adds the company is very familiar with the Tampa market. In November 2017, it bought the six-building Tampa International Business Center, in the Westshore district, for $45.05 million from TerraCap Management.

Like the Taurus portfolio, the 324,654-square-foot International Business Center properties were older and nearly fully leased at the time of the acquisition to WellCare Health Plans and other tenants.