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What Bank OZK’s CEO says about the $664M loan for Water Street Tampa

Margie Manning

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Water Street Tampa (rendering courtesy of Strategic Property Partners)

The $664 million construction loan Bank OZK made to the developer of Water Street Tampa was the largest loan in the bank’s history.

George Gleason

The loan to several entities affiliated with Strategic Property Partners “meets all of our standards for a really large credit,” George Gleason, chairman and CEO of Little Rock, Arkansas-based Bank OZK (Nasdaq: OZK), said during a conference call with analysts Friday.

Water Street Tampa is a $3 billion, 50-acre district in downtown Tampa that will feature retail, offices, homes and hotels, as well as cultural and educational institutions. SPP, the developer, is a Tampa-based firm that is a partnership between Tampa Bay Lightning owner Jeff Vinik and Cascade Investment LLC, an investment firm controlled by Bill Gates.

The loan closed on Sept. 24, according to documents filed in Hillsborough County three days later.

“SPP is taking advantage of favorable debt capital markets and the immense interest in Water Street Tampa,” a spokeswoman for the developer told the St. Pete Catalyst.

The people and companies behind Water Street Tampa were one reason the bank made the loan, Gleason said during the Oct. 18 conference call.

“It has an outstanding sponsorship. It is an incredibly exciting and well-thought out and [expected] to be well-executed project based on what we’ve seen. So it meets our standards of being a high-quality project with truly great sponsorship in a great market, and we’re very excited about it,” he said.

Gleason elaborated on the project in an interview with the Commercial Observer, a real estate industry publication.

“Water Street is a visionary, mixed-use development … [and] embodies the high standards that Bank OZK consistently seeks in its project financings — marquee real estate, strong market fundamentals and top-tier sponsorship,” Gleason told the Commercial Observer. “We appreciate the opportunity to participate in the Water Street project as the sole senior secured lender.”

Bank OZK is one the country’s largest construction lenders, and Gleason is one of the most important real estate lenders in America, Bloomberg Businessweek wrote in a 2018 profile.

On Sept. 30, the last day of the third quarter of 2019, the bank had $17.73 billion in total loans, a 6 percent increase from the same day a year earlier, it said in a news release. For Q3 2019, the bank had $103.9 million in net income, a 40 percent increase from Q3 2018, but a 6 percent decrease from the second quarter of 2019. Total assets at the end of the quarter were $23.4 billion, up 6 percent from a year earlier.

Bank OZK, formerly Bank of the Ozarks, has 250 offices in 10 states, and entered the Tampa-St. Pete market in 2016, after buying C1 Bank. As of June 30, Bank OZK had 17 branches in the metro area, $733 million in deposits and a 0.84 percent deposit market share, making it the 17th largest bank in the metro market, according to the Federal Deposit Insurance Corp.

OZK Labs, the bank’s innovation center, is based in downtown St. Petersburg.

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