Downtown Sarasota BB&T office building sold for $35 million

One of Sarasota’s most recognizable downtown office buildings has been sold to a Miami firm for $35 million.

The nine-story, 550,000-square-foot BB&T Financial Center at 1800 Second St. in Sarasota was purchased by Tricera Capital of Miami. The sale, which closed Thursday, is the first move into the Sarasota market for Tricera, which has properties in the Tampa/St. Petersburg area.

The Herald-Tribune reported the BB&T building was for sale last summer. The seller was George Spector, whose father, Ronald, completed the building’s construction in 1986, according to Herald-Tribune archives. Over the past three years, it has undergone more than $1 million in capital improvements, including upgrades to the roof, lobby and elevator systems, according to Tricera. 

A representative from Spector’s office said he had no comment about the sale when reached by phone Friday. 

Tricera co-founder and managing partner Ben Mandell said that the company will look to keep existing tenants. The ground floor lends itself well to a possible cafe, retail or even medical uses, he said. 

The company partnered with with Alex Karakhanian and Merrimac Ventures on the acquisition.

BB&T’s merger with SunTrust, which has its local headquarters across the street, opens the possibility that the bank could leave when its lease expires in a few years.

“We’re just thinking in back of our head, how can we strategize if they do leave? If they do decide to leave we have the optionality, and if they decide to stay, even better,” Mandell said. 

The building is currently 70% leased and is home to a variety of legal, financial and professional services firms. BB&T has two spaces totaling about 28,000 square feet, a spokesman for Tricera said; other tenants include Northpointe Bank, Real Digital Media, the Scoular Co., Vincent M. Lucente & Associates Inc. and more, a spokesman for Tricera said. 

On Thursday, in an address to the Bradenton Area Economic Development Corporation, Orlando-based economist Dr. Hank Fishkind said that office space is typically the third largest fixed cost for most businesses.

In the COVID and post-COVID world, where many firms have realized that working from home is, in fact, productive, Fishkind said companies are looking for ways to cut back on their physical footprint, meaning demand for office space will go down. This was happening before COVID but the pandemic accelerated the trend, he said. 

But downtown Sarasota is a growing market, Tricera said. Individuals and businesses are looking to relocate to the area from states with higher taxes, and hundreds of new housing units are in the planning stages for within four blocks of the BB&T property. 

Mandell and Scott Sherman, co-founder and managing principal, said they think there will actually be a great deal of demand for office space post-COVID, especially since there’s a lot of migration to Sarasota from the Northeast and the Midwest. 

The building has open-air atrium common areas, separate HVAC systems and private bathrooms in each suite, which the company said makes it well-positioned to accommodate the new requirements of a post-COVID office. 

Matt Christian, managing director of SVN Commercial Advisory Group in Sarasota, said that Tricera’s purchase shows a strong level of confidence in the future potential for office space downtown. 

“There is lots of talk about the fleeing office environment due to COVID-19, but when you have a market with little existing Class A inventory and low historical new construction, good investment opportunities like this one make a lot of sense to me,” Christian said. “The $35 million question is: How quickly can they get occupancy to an acceptable level? Every day, I am talking with more and more business owners relocating from the northeast, so I’m hopeful they will do well in Sarasota.”

Mandell said that there’s plenty of space available for lease at present-day rental rates.

“If you are an office user in Sarasota seeking space from 1,000 to 5,000 square feet, BB&T Financial Center truly stands alone,” he said. “The building checks off all of the boxes when it comes to privacy and security. We are thrilled to complete this acquisition and invest in Sarasota’s growth and future potential.” 

Major downtown Sarasota buildings have changed hands a lot over the past few years. In February 2020, a joint venture paid about $50 million for the 13-story Sarasota City Center, 1819 Main St., the second time in three years that building changed hands.

In 2019, a Canadian company paid $10.3 million for a group of Main Street-Lemon Avenue retail properties that are leased to such businesses as Hyde Park Prime Steakhouse and (formerly) Sur La Table. A subsidiary of New York Life Insurance Co. paid $24.6 million for The Shoppes at Sarasota Row, the retail complex that is home to downtown Sarasota’s Whole Foods Market.

The BB&T property was marketed for sale by Douglas Mandel, executive managing director of Marcus & Millichap division Institutional Property Advisors. Senior financing was obtained by Prime Finance.