Unrecorded sale explains why Midtown Centre could sell for $65M
A speculated sales price of $65 million for the Midtown Center Office Park takes on a little more clarity based on what former Midtown Centre LLC owner Roger Kellogg sold the company for in 2008.
Kellogg said Wednesday he formed Midtown Centre LLC in 2004 when he bought the property — and he sold the company for $70 million in 2008 to D Group.
That amount isn’t found in public property records because Kellogg sold the buildings and land as part of the company, not as a real estate transaction.
Duval County Property Appraiser records show the most recent sale was Nov. 29, 2004, when Kellogg’s group bought the 31-building, 49-acre property along Beach Boulevard for $31 million.
Kellogg explained Wednesday he sold the corporation that owns Midtown Centre. “It was a single asset entity, with that asset being Midtown Centre,” he said.
On Feb. 15, 2008, the name of Midtown Centre LLC’s registered agent and office address were changed from Kellogg, listed at Midtown Center at 3947 Boulevard Center Drive, to Carlos A. Romero Jr. in Coral Gables. The manager of the LLC became Jose Dubon of D Group.
According to midtowncentre.com, the property is owned by D Group Equities and D Group Management NA oversees D Group’s real estate operations in the continental United States.
D Group Equities Management Service is based in San Juan, Puerto Rico. D Group Management, led by Dubon, is in Coral Gables.
D Group listed the property for sale about three weeks ago through CBRE Inc., although there is no asking price.
Keith Hicks, chief appraiser for the Duval County Property Appraiser’s Office, acknowledged that some property sales are included in corporate transactions and not registered as property sales with the Duval County Clerk of Courts.
Hicks analyzed 35 properties that comprise Midtown Centre, consisting of the 31 buildings, a vacant commercial site, one parcel of waste land and two utility parcels.
He calculated the property’s 2014 proposed market value, which is a working number, totals $27.2 million.
The Real Estate Alert newsletter surmised the property could bring $65 million based on three factors. Because a third of the buildings are fully occupied, a buyer could sell those and recoup some of its investment. It could then focus on filling the vacant space, estimated at 33 percent, and upgrading the tenant roster for the remaining buildings.
It also noted the stability of the tenants, including that almost half are government entities. The center has 738,530 square feet of space.
Kellogg Development Co. is based in Charlotte, N.C.
Kellogg, his wife and their four children moved from Orlando to Jacksonville in January 2005 after the purchase.
“It was such a large project, I felt it really required my hands-on presence in order to turn it around,” he said. “We really enjoyed our time there.”
While in Jacksonville, he actively worked on improving the center’s marketing position as well as the neighborhood around it. The location is about 4 miles from Downtown and even closer to the historic, and redeveloping, San Marco and St. Nicholas areas.
Originally the Koger Center, Midtown was launched in 1957 as one of the area’s first office parks, meaning it also is among the oldest.
Kellogg tried to galvanize neighboring property owners to revitalize their stretch of Beach Boulevard, although the recession hit the market in 2007 and many owners put capital improvements on hold.
“We have had positive feedback from the community, however it is still very much a work in progress,” Kellogg said Wednesday of those efforts.
In a May 2007 column in The Florida Times-Union, Kellogg said his company invested more than $10 million more into renovations and landscaping after the $31 million purchase. He said occupancy rose from about 60 percent to 86 percent, inspiring his effort to spark redevelopment outside the boundaries of Midtown Centre.
He said Midtown had stabilized and he wanted to branch out and buy more surrounding properties to rehabilitate, either directly or in joint ventures.
Kellogg also invited other investors to redevelop the area, which he defined as the properties within and near the split of Beach and Atlantic boulevards east to University Boulevard. He identified the Kmart center at Beach and University boulevards as another obvious redevelopment opportunity. Kmart has since closed the store and the property sees little activity.
Kellogg started reaching out to the neighbors at a planning workshop in January 2006, gained the support of then-City Council member Suzanne Jenkins, who was active in a similar effort along Philips Highway, and he found support with both commercial and residential neighbors.
Then the recession hit.
Kellogg said he worked with CBRE Inc. in the 2008 sale to D Group and that CBRE Executive Vice President Ronald Rogg in Orlando was the lead broker
and “brought D Group to the table.”
He said D Group took over the property management at the time of the sale in February 2008 and Kellogg continued to lead leasing efforts through May 2011, when D Group assumed those duties.
Kellogg said his family moved to Charlotte in June 2008 because its real estate holdings were in the Carolinas.
“The D Group is a first rate organization and I have every confidence that they will do whatever it takes to build on our previous success at Midtown Centre,” Kellogg said.