Press play to watch Feldman Equities CEO, Larry Feldman, walk you through the company’s post-acquisition renovation strategy.
Today I’m going to talk about our renovation projects and what we look to accomplish with every renovation, along with some case studies of specific projects that we’ve renovated. I’ll give you a before and after of our renovation projects and then I’ll drill down into a specific project we just completed this summer, which is our Sarasota City Center project, located in downtown Sarasota on the west coast of Florida. This is the epitome of what we strive for in a renovation. It is very post-COVID friendly, with specific things that have created a solution, giving tenants exactly what they want and need.
We acquired the First Central Tower building in downtown Saint Petersburg (St. Pete). This building was built in 1985, had a typical lobby that was very darkly lit, and it just reeked of 1985. This is the before shot of the way it looked when we bought it 7 years ago. We bought this building at a time where downtown St. Pete was just beginning to recover from the ’08 recession.
We invested about $5 million in this building, renovating it top to bottom. Part of the renovation includes new lobby floors that consists of five foot by ten foot sheets of Italian porcelain tile, that looks identical to Carrara marble. This is a very high end material that is even more durable than marble.
The beauty of it is that it’s delivered in five by ten foot sheets so you get this beautiful, expansive look and we match the grain, so it looks like it came from a Roman Colosseum from 2000 years ago. It’s a timeless material, and we like to use materials that not only look good today, but they’ll look good 100 years from now. We try to stay away from trendy things, and yet we want to be very modern. The white wall in the background that says BB&T is the bank branch door in the far back of the photograph. The panel behind the door is a white, backlit, frosted glass with intense LED lights. At night the panels look like they float off the wall, and they just look amazing. We use a bronze-cladded metal to clad what are otherwise pretty ugly looking columns. We created a concierge desk. We kept the original 1985 window line, but because of all the other changes we made, the building still looks brand new.
“Wow, this building looks like it was just built.”
And that is the standard that we go for on all of our renovations. We want the casual observer, who may not be an expert perhaps, to walk in the building, look around and say, “wow, this building looks like it was just built, or maybe it was built in the last couple of years”. That’s the standard we go for. We want to see jaws drop and eyes pop; then we know we’ve accomplished our goal.
Here is another before and after of the same lobby. Notice the new concierge desk on the right. A very important part of what we do in our renovations is to create an outstanding point of arrival. We have a suit and tie concierge that meets and greets all visitors right at that central location. Again, you can see the backlit floating glass wall just behind the concierge desk.
The Sarasota City Center is a building we bought on February 28th, 2020. I’ll never forget this day because we had $700,000 of contract deposited, and we were buying this building for about $49-$50 million dollars. We were going to walk from the contract because the stock market was collapsing, as COVID was starting to really become a panic factor in the market. But ultimately, we decided to close.
This is a photo of what the building looked like just before our renovations about a year and a half ago.
This is an image of that exact same lobby from that exact same view, and in keeping with the exact same theme of all of our buildings – like they were just built. But this is another 1985 lobby!
I like to joke that just like the old Back to the Future movie where the guy gets in the DeLorean – we move buildings through time with one of those time machine throttles. We feel like what we’ve done with this lobby is literally moved it 40-50 years into the future!
This is another before and after of the Sarasota City Center building.
This is a before shot of the restaurant that spills into the atrium area. You can see that the washed-out carpet tiles really sucked up all the light. When you have dark surfaces on flooring, it doesn’t reflect the light.
Now you can see that the lighting is hitting that white, reflective surface, and you’re getting twice the lighting. I like to say, if we have six light fixtures above, we really have 12 because you’ll see six light fixtures reflecting off of that material.
This is the before after of the same view. Again, the lighting is intense.
In this image below, you will see what is probably one of the best looking garage entrances you’ll ever see anywhere in the country. This is a view of the parking garage facing the main entrance to the building.
A lot of owners neglect these areas. In the original garage there were concrete pavers, it was very dark, and you couldn’t even tell that was the entrance. There was no name of the building, no branding. When visitors, tenants, and customers enter a building, they experience it as soon as they walk through the entrance, and they start making up their mind about the type of company they are visiting. They ask themselves, “is it a grade A company, a Grade B company”? Or, “what kind of office do they really have”?
So you want to hit them on that very first impression. When they get out of their car, this is the type of entrance that you want your client to see. And that’s what we call ‘psychography.’ It’s what the mind reads. So, every step that the person takes, through the entrance, and then going into the lobby, it gives the impression that this is a class A building and that this is a very new building. Today, this is the best building within a 30 mile radius, whereas when we bought it, it was just a run of the mill building.
The post-renovation indoor amenity space at Sarasota City Center has a first class fitness center. We spare no expense on our full-service fitness centers with state of the art machines, showers, changing rooms, and lockers.
Something that we really are super proud of is our post-COVID renovation plan.
You’ll see the shuffleboard on the left, the pool table on the right, and all the way down the walkway, towards the end of this photo, you’ll see a bar area. That’s a cocktail party zone. You’ll see soft seating. There’s some high top seating for the bar set up. And this is now being booked almost every day for one cocktail party or the other.
There are a slew of investment banks in this building ranging from Merrill Lynch to UBS, RBC and so on, and they entertain clients in here. But more importantly, it’s for the staff. It’s interesting what’s happened to the office market. A lot of staff, you’ll hear this, when I work from home, but, the employers, the bosses for the most part, with some exceptions, really want people back in the office. But the job market is so tight that it is hard to get them to come back. So they have to entice them.
“Buildings with the most amenities are getting all the leasing action.”
What we’re finding – and this is something that luckily we’ve already been doing for the last 20 years has to do with amenities. The high end, first class buildings that have the most amenities are getting all of the leasing action, whereas the giant floor play, deep suburban building in the parking lot campus, kind of, commodity product office building are the ones hurting the most in the market. They’re the ones that have had the least amount of reinvestment and that don’t provide a first class experience to get the employees back in. This is the type of product that employers are moving into.
This is just another view of the same game area. We’re so excited about this area, the soft seating, and television set that runs all day.
Another new post-COVID trend is the hybrid workforce. Companies are not building the same size space as they used to, and they’re trying to shrink their footprint a little bit to save on office space.
And we say go ahead and do that and if you do, you can save rent. But, we’re going to give you a conference room that’s four times bigger than you could ever afford in your own space, because this would be an enormous amount of square footage where you can bring in 100% of the company, even if you only have seats for 60% of the company. So that is a big thing. We’re going to show you various angles and there are actually two separate conference rooms which we built into this project.
These are the brand-new bathrooms.
These are outdoor seating areas that are just outside that game room. Where those chairs are, to the left, is where that game room, cocktail party zone is. So we make it indoor/outdoor. On good weather, we actually open the doors to the cocktail party area and it functions as an indoor/outdoor area. A lot of people are having lunch in these areas right now.
We use the Sarasota City Center as a case study to give you an idea of how far we went with the renovations. We’re about $8 million into this renovation. This is a first class office building, right in the heart of downtown Sarasota, which is absolutely booming right now.
It has the world headquarters to Boar’s Head. Boar’s Head Meat has got their world headquarters in this building. And, it’s a classic case in point by the way, of what’s happening to Florida. The two senior principals of Boar’s Head – the CEO and co-owner bought homes on Longboat Key, which is just outside of downtown. And, unlike past periods where people moved to Florida to retire, this period is different.
“People are moving to Florida and they are bringing their whole company with them.”
What’s happening now in Florida is a very, very different trend. Post COVID, it accelerated. People are moving to Florida, instead of an 80-something year old couple. It’s maybe a 50 year old couple. And they are moving in, personally, but they’re bringing their whole company with them. And that’s what Boar’s Head did in this building. And, part of what was part of the leasing campaign here – to bring them in and keep them in the building and other tenants that we’ve brought in, that have in-migrated out of the Northeast and Midwest, is this renovation.
This is the front entrance which was cleaned up, and completely renovated.
Previously it looked very old and out of date, with a small, ugly fountain in front. And now it looks like a brand new building.
As you step into the building from the outside, you can’t help but feel that this might be a brand new building, but in reality it’s from 1985.
This is the view of the restaurant seating from inside the lobby.
This is the concierge’s desk.
Here in the laptop seating area, people can just hang out in the lobby.
That’s the elevator area, brightly lit with intense LEDs.
That’s that same garage entrance we saw earlier.
This is a smaller conference room that we use for smaller meetings.
We also have a large conference area for the 100 year flood type conference room. We can easily switch the desks around to allow for classroom or broad meeting styles. The LED lightly makes the room very bright.
This is the game room that was shown earlier.
Again, these are post-COVID trends, and the things that tenants really want, such as entertainment zones, and hangout areas. These rooms get a lot of use; people bring in their lunch and just hang out. We have a restaurant in the building, and they can bring their food in there as well.
This is the fitness center we mentioned before.
This is the outdoor seating area.
And those are all of the state of the art, post-COVID 2022 renovations of the Sarasota City Center.