Miami-based Tricera Capital is looking to add to its extensive portfolio of St. Petersburg commercial real estate.
The company was on defense for a few months starting in March, when the Covid-19 pandemic began, but now is exploring additional deals, said cofounder Scott Sherman.
“We’re still active and looking to acquire more properties in downtown St. Petersburg,” said cofounder Ben Mandell.
The St. Pete Catalyst talked with the Tricera principals this week, after they announced the completion of an extensive renovation of 1110 Central Ave., a historic commercial building in the EDGE District and one of about 10 parcels the company owns in St. Petersburg.
“I think St. Petersburg has been weathering the storm better than other cities than we’re invested in,” Sherman said. “You read a lot of negative headlines and St. Pete is not immune, but it’s doing better than other markets.”
Mandell credits the pride that local residents have in the city. That’s one of the reasons Tricera invested heavily here, he said.
“St. Pete resident have the most pride of any city in the state and that’s a catalyst for supporting local businesses during trying times,” Mandell said. “The mayor is handling the crisis well and tenants are doing well given the circumstances … in contrast to South Florida, where tenants are struggling and not doing as well, and leadership is handling the crisis in a different way.”
Tricera was one of the first downtown landlords to proactively reach out to tenants in the early days of the pandemic, offering to postpone April rent as the local businesses dealt with restrictions imposed to contain the spread of the virus.
“We reached out to every tenant and set up a one-on-one call. We heard their concerns and tried to provide support through rent relief and other means,” Sherman said.
Tricera also helped with bank connections, to ensure tenants had access to the Paycheck Protection Program and other funding programs. That hands-on support is one of the reasons tenants are doing well now, Mandell said.
“We have tenants that trust us and look at us as more than a landlord,” Sherman said.
Tenants are the “life blood” of the industry, so supporting them is key, Mandell added.
Retail and office spaces are the asset classes that are most concerning but also most promising, Sherman said.
Although there are dark storefronts on Central Avenue, “there’s tenant interest in the storefronts that you don’t see when you are walking down the street,” he said.
The renovated 1110 Central Ave. project is an example of the type of office space that businesses are looking for in a post-Covid world, with full-floor open spaces on the second and third floors that have their own bathrooms and common areas, to limit exposure to others.
“We delivered the project at the right time to capitalize on that,” he said.
One challenge to acquisitions right now is financing. The retail debt market is non-existent, Mandell said, but Tricera, with its own capital and high-net worth investors, can close on deals using cash.
Property prices have held steady so far, Sherman said.
“It’s more about being patient and sitting tight. At some point closer to end of the year you will see more motivated sellers,” he said, adding that’s likely more true on a national perspective than in St. Petersburg.
Tricera has worked with another Miami developer, Place Projects, on a project in the 600 block of Central Avenue. Place Projects owns several parcels along 22nd Street South between 1st Avenue and 6th Avenue South, and Joe Furst, founder and managing principal of Place Projects, has proposed changing the zoning to allow small retail businesses, offices and residences to be built in the area.
“Joe is a visionary and we’re very supportive of what he’s doing,” Sherman said. “He puts a lot of thought into the re-imagining of the corridor.”
Furst really cares about place-making and preserving aspects that helped a neighborhood grow, Mandell said.
“You have to preserve that while also allowing growth. You can’t cripple it either. That ability to see the middle ground is what Joe is so good at,” Mandell said.