Fort Lauderdale-based Mainstreet Capital Partners Inc. plans significant capital improvements to its recently acquired SunTrust Tower Downtown, including lobby, restroom and common area upgrades.
Mainstreet will spend $1 million at the 23-story SunTrust Tower at 76 S. Laura St.
Mainstreet said it bought the structure in a joint venture with Minneapolis-based CarVal Investors LLC, which recently sold the Tampa Bay Center in downtown Tampa for $128 million.
Mainstreet Capital Partners said it bought the SunTrust Tower along with the adjacent 602-space parking garage under construction, due for completion in May.
Mainstreet said the deal, its first in Jacksonville, was its third joint-venture partnership with CarVal, a global investment fund manager with more than $10 billion in assets under management.
Mainstreet also is in the market for more investment.
“Mainstreet continues to search for underperforming office assets in both Downtown and the suburbs on Jacksonville to widen its footprint and capitalize on its local economies of scale,” said Joe DiMario with Mainstreet Real Estate Services Inc.
The SunTrust tower is 54 percent leased, according to Mainstreet, which said the transaction was challenging because the building was split into office condominiums by Florida investor Cameron Kuhn in 2005.
His remaining piece went through foreclosure and was purchased in 2009 by the current seller, Parador Partners of Atlanta. Mainstreet said its goal was to buy all the pieces and put them back together.
“The task of simultaneously closing on seven contracts from different sellers and shutting down the condominium ownership was daunting, but was completed with the help of our capital partner, CarVal, which shared the belief that the SunTrust Tower is a great asset with a tough ownership structure,” said a statement by Paul Kilgallon, principal of Mainstreet Capital Partners.
Kilgallon said the deal was an opportunity “to return this building to its rightful status in the downtown Jacksonville skyline.”
He said the partners are seeing resurgence in downtown locations. “More employers are seeking live, work and play environments to attract young employees,” he said in the release.
The release is dated April 2 but was distributed April 7. The deeds for the sale were recorded April 3 in Duval County. Those deeds show the sale totals $31.1 million, although that figure was not in the release.
Mainstreet CV 76 S. Laura St. LLC bought the property. BMO Harris Bank of Chicago issued a $27.15 million mortgage.
Mainstreet said the parking garage completion will help continue leasing efforts. One of the largest new leases already reported is PricewaterhouseCoopers, which will relocate to SunTrust Tower from the Bank of America Tower. Cushman & Wakefield Senior Director Traci Jenks is the leasing agent.
According to the release, Mainstreet specializes in returning signature buildings to their original status. Kilgallon started the company in 1999 and it has completed more than $1 billion in acquisitions of 5 million square feet of space in Tampa, Fort Lauderdale, Boca Raton and West Palm Beach in Florida as well as Atlanta; Phoenix; Denver; Charlotte, N.C.; and Charleston, S.C.
Since 1987, CarVal has invested more than $81 billion in 5,300 transactions across 71 countries.
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