Who could really blame Carl Wise and other Sarasota-based commercial realtors for being skeptical?
On paper, Meridian Development Group’s desire to acquire a 948,000-square-foot former Winn-Dixie distribution warehouse seemed ludicrous. It was destined to be the biggest white elephant in the county, likely to sit empty for years to come.
Wise, the co-owner of Preferred Commercial Inc., put the deal in stark perspective: “I wouldn’t have done it if they said, ‘Carl, we’ll give it to you. Here’s the deed; you assume the liability for maintenance and taxes.’ That’s how skeptical I was.”
That was his attitude in January 2006, when the Clearwater-based Meridian Group acquired the mammoth property near Clark and McIntosh roads for $30 million during W-D’s bankruptcy proceedings. Sarasota commercial real estate pros such as Wise saw no hope of leasing the facility in the near or long-term. They were openly skeptical of Meridian’s intentions and opportunities.
Eighteen months later, the renamed Meridian Business Center is roughly 75 percent occupied, with three leases totaling 680,000 square feet. It has been appraised at $55 million—nearly doubling its value to Meridian in less than two years. And Meridian has announced plans to begin building an adjacent, 140,000-square-foot Class A office complex this year.
“We knew this was a great property from the moment we stepped onto it,” says Steve Kossoff, managing director of the Meridian Development Group. “When we looked at the property and the opportunities it presented, we did not look at the micro-market of Sarasota: ‘Will Sarasota tenants rent it?’ We saw this as a great location for the state of Florida. The huge population growth across Florida in major cities suggested to us that someone would be interested in this for a statewide location. We did a logistics study to see how much of Florida could be serviced on a one-day drive from the site.”
The answer may surprise you: 87 percent. Even more surprising: From Orlando and the I-4 corridor “you can only hit 67 percent of the state within a day,” according to Kossoff. The variable is Sarasota’s easy access to Miami and North Florida.
Copyright 2008 Will Eisner: A Spirited Life by Bob Andelman