Exclusive: Downtown Tampa apartment tower Channel Club is on the market
By Ashley Gurbal Kritzer
Tampa Bay Business Journal
Published: Jul 16, 2021

An apartment tower in downtown Tampa's Channel district is on the market, and the transaction could be the city's most significant multifamily sale of 2021.

CBRE Group Inc. in Tampa is listing Channel Club, a 21-story tower anchored by Publix Super Markets Inc. at 1105 E Twiggs St., for sale. The street-level Publix is not part of the property; Lakeland-based Publix owns its real estate at that location.

The last significant multifamily transaction in downtown Tampa closed in early 2020, shortly before the novel coronavirus pandemic shut down the global economy. Nine15, a tower on North Franklin Street, sold for $120 million in February 2020.

Nine15 sold for just over $330,000 per apartment. The record-price-per unit in Tampa belongs to 500 Harbour Island, which sold for $440,212 per door in 2019. Channel Club, with its proximity to Water Street Tampa and a street-level grocer, is likely to come in between those two figures. It has the potential to be the second market-rate tower in the city's history to breach the $400,000 per unit threshold, given the massive influx of new residents from the Northeast and Midwest in the pandemic's wake.

When commercial properties trade for near-record prices, it's an endorsement of the market and motivates developers to pursue new projects.

Channel Club is owned by the original developer, a partnership of Atlanta-based ECI Group and Tampa's Mercury Advisors.

Even with the amenity of an attached grocery store, Channel Club's rents are below its competitors. On average, when a lease turns over in Channel Club, new tenants are seeing a 14 percent increase in rents versus what the former tenant paid, said Frank Carriera, executive vice president at CBRE in Tampa.

Most other comparable buildings are around $2.70 or $2.80 per square foot; Channel Club's average rent is $2.40 per square foot. Heron, which just opened in Water Street, is seeing $4 per square foot in some units.

"That’s the opportunity here," he said. "There’s certainly some runway for rent growth."

In February, Carriera and his team listed for sale The Pearl, a midrise apartment building in The Heights. The sale of that property would have also been a significant transaction for downtown Tampa — and several offers well above the sellers' expectations were received — but The Pearl's ownership ultimately decided not to sell, Carriera said.

"Due to the tremendous rent growth we’ve experienced in Tampa, the sellers decided to refinance it in an effort to continue to grow the rents," he said. "They felt like they were leaving money on the table and maybe selling too early."