Downtown Office Building Sales and What They Represent - Fall 2017

In the past four years five downtown Class A office buildings have sold. Given that there are only thirteen buildings in this category that is significant turnover. The highest per square foot sale prices were achieved at Ringling Square and the PNC Building, at $289 and $288, respectively. Notably, both assets were purchased by the same investment group. Considerably lower prices per square foot occurred with the sales of Kane Plaza, at $146.47, and Sarasota City Center, at $147. Both Kane Plaza and City Center were purchased based on in-place income and income potential derived from significant, seven-figure capital improvement programs. Although each of these transactions – and the motivations behind them – is different, each shares a common theme: Cash is abundant for Sarasota commercial real estate, especially when investors are able to purchase income-producing properties at below replacement cost, as was the case with Kane Plaza and City Center, with the potential upside of higher rent rolls in the future amid a largely stagnant inventory.