Quay gamble is paying off

GreenPointe Holdings’ $27 million acquisition of the Sarasota Quay site in Sarasota in 2014 was met with a fair amount of skeptic at the time.

The property’s size — 15 acres — was only part of it. While its location between a Ritz-Carlton Hotel and a 50-acre, municipal tract was admired by many, the Quay was considered outside of the downtown core, which, like a lot of Florida urban areas, was enjoying a resurgence at the time.

Even more knotty, the site was cut off from downtown by the four-lane Tamiami Trail, and it would require millions of dollars in infrastructure to bring it to life.

Equally daunting were the carrying costs, which topped $1 million annually.

Today, though, the Jacksonville-based development firm and Cross Lake Partners, a private equity firm that spun off of investment house Paulson & Co. in 2018, appear to be in the black — or very close to it.

To date, a trio of transactions for Quay parcels with Lennar Corp. and the Kolter Group have generated more than $40 million, according to Sarasota County property records.

Even accounting for infrastructure installation to date and capital spent constructing a long-awaited traffic-calming roundabout in front of the project’s main entrance, GreenePointe and its partner’s acquisition already seems to have been a sound one.

“We’re pretty much on target,” says GreenPointe President and CEO Ed Burr. “The pandemic caused us some delay, because it’s affected both the supply or labor and materials, but it’s come together pretty well so far, with more set to come out of the ground. I think in 24 months it’s going to look outstanding.”

Kolter acquired the first Quay tract in 2018, when it spent $19.3 million to buy a one-acre parcel for a 73-unit, Ritz-Carlton-branded residential tower.

The Delray Beach-based development firm completed the 18-story building, where units ranged from $2.5 million to more than $5 million, late last year.

The company followed that deal up by buying an additional two Quay parcels for $10 million, where it is planning to start construction this Spring on another 18-story condominium project.

Bayso Sarasota will contain 149 residences priced from $800,000. Completion is scheduled for Fall of 2023.

Designed by SB Architects, of Miami — the same firm behind Kolter’s Ritz-Carlton Residences Sarasota — Bayso Sarasota is expected to contain amenities such as a resort-style pool and spa deck, a fitness center with personal training services, a residents’ club room with a catering kitchen and bar, a private dog park and climate-controlled storage areas.

Brian Van Slyke, a Kolter Urban regional president for the West Coast of Florida, described the Quay site last year as “the best Sarasota has to offer in terms of dining, entertainment and the arts.” 

Lennar Multifamily Communities made the most recent Quay land purchase, when it spent $11.5 million last year.

The affiliate of the giant Miami homebuilder plans to develop a 12-story apartment tower with 240 units and 13,000 square feet of ground-floor retail space.

Amenities are set to include a rooftop wine lounge, catering kitchen, cybercafe, resident lounge, golf simulator, resort-style swimming pool with cabanas, fitness center, dog park and a bicycle repair shop and storage.  

Like Kolter’s Bayso, Lennar will commence construction in the Spring and has targeted Fall of 2023 for the project’s completion.

“The residential concepts that have been rolled out are pretty much exactly as we’d planned or hoped for,” Burr says. “There are a mix of price points, with very high-end, luxury condos, some more affordably priced condos at Bayso and then upscale apartments.

“We knew we needed to have people living there first before we could really attract retail and restaurants to the site, which is the next step,” Burr adds.

Some of that retail could be housed in the three-story Belle Haven, a former apartment project and office building, on the Quay land. GreenPointe has fully refurbished the historic structure and Burr says the company is “looking now for the right fit” there.

In all, the Quay tract has been approved for as many as 695 residential units, 189,050 square feet of retail space and nearly 39,000 square feet of office space. A later phase also is expected to include a hotel with up to 175 rooms.

And with just 3.8 acres of the property sold off to date, GreenPointe and Cross Lake have ample opportunity to further develop the site moving forward.

Adding to the property’s appeal longer term, a civic group is working to redevelop the adjacent 52-acre, city-owned tract into a waterfront park, performing arts center and cultural amenity hub. The Bay Sarasota, the civic group, also has pledged that the site, now occupied by the Van Wezel Performing Arts Hall and other cultural attractions, will not be developed commercially.

Burr says the combination of the property’s uniqueness, the city’s momentum and the robust commercial real estate market have all contributed to the Quay’s success to date.

“The good market has helped, as has having the right property and the right community to do it in,” he says. “We think we’ve brought forth the right plan to the market to meet the demands of the consumer and the community, and the site plan that was approved by the city gave us the ability to do that.”

Burr predicts that over the next three years, the final expression of the Quay site will begin to take shape and become a development that positively impacts all of downtown Sarasota.

“We have a lot of confidence in the Sarasota market, and we always said we wanted to be accretive to the community,” Burr says. “Our goal is to finish the project as well as we like to think we’ve started it. The next two to three years will be exciting times.”