How Money Moves
There’s been plenty of action in downtown Sarasota real estate in the last year, and not just with the new condo towers. Banks, wealth advisers and other financial firms have relocated or upgraded their offices. Some are seeking higher profiles with new spaces and street-front signage; some are brand-new to Sarasota and announcing their arrival to new customers; while others are simply looking for more space to grow.
Historically, downtowns attract financial companies, which jockey for exposure and referrals from attorneys, accountants and other neighboring businesses. In Sarasota, the timing seems right for these businesses to upgrade, commercial real estate broker John Harshman says. Restaurants and retail are finally on the upswing, new downtown condos will bring in new residents and foot traffic, and office space is widely available at good prices.
“We’ve gone through the shakeup of financial institutions,” he says. “The banks and lenders that were going to get in trouble, we’ve seen that come and go. The ones that are here today are stabilized and doing really well. We always have lenders looking to move downtown.”
The vacancy rate for Class A office space is more than 12 percent, compared to 3 percent to 4 percent in the late ‘90s to mid-2000s. Prices range from $21 to $28 per square foot, not too much a premium over $14 to $22 near I-75 and Lakewood Ranch.
But not every financial firm needs—or wants—to be downtown. When brand awareness and proximity to feeder firms aren’t considerations, space far from the downtown core can be an attractive option. Here’s a look at how a few companies recently found new digs downtown—and why one left.
Build to Suit
CAPSTAN FINANCIAL CONSULTING GROUP
238 S. Washington Blvd.
WHO: A Wells Fargo Advisors Financial Network firm formed in 2010. Provides full-service investment planning and currently manages nearly $500 million in assets. (Investment products and services are offered through Wells Fargo Advisors Financial Network, LLC (WFAFN), Member SIPC. Capstan Financial Consulting Group is a separate entity from WFAFN.)
EMPLOYEES: 19
OLD LOCATION: 500 S. Washington Blvd. (Former LandMark Bank building)
MOVED TO NEW LOCATION: June 2015
MAIN REASON FOR MOVE: More space for current staff and room for future expansion.
WHY THIS LOCATION: Opportunity for rare build-to-suit building downtown; on-site parking for staff and customers; able to cultivate a “small business” vibe rather than be stuck in an office tower.
WHY DOWNTOWN: Brand visibility, close to referral businesses, centrally located for staff commutes.
TIP FOR RELOCATING DOWNTOWN: Do your due diligence in exploring the options; there are plenty of commercial spaces available to meet almost every need.
Capstan’s move was short—just a few blocks north and closer to downtown—but was a drastic shift, giving the firm visibility in a new, modern office built by Sarasota developer Mark Kauffman. Capstan crafted the office layout and interior of the two-story, glass-fronted building that commands attention from motorists driving down U.S. 301 across from Payne Park.
“With its transparency and vibrancy, I think this building is a tangible example of how we do business,” Capstan managing partner Matt DePalma says. “It was originally meant to be a loft upstairs, but that just didn’t work for us. We needed more offices and that ultimately changed the design.”
Space was the main reason for the move out of their former 3,400-square-feet office. The company considered existing spaces in buildings like One Sarasota Tower and BMO Harris Plaza, which offered cheaper leases but not the qualities the firm was looking for.
“You had to park in a separate garage, walk over a bridge—it just wasn’t us,” DePalma says. “We are local business owners first. We want customers to park on-site, walk in to a smiling face, [someone] who knows what they like to drink when they come in.”
Leaving downtown was never an option, DePalma says. The firm signed a 15-year lease, a commitment to the idea of the city center as a financial hub.
“The attorneys are located here, the insurance agents and CPAs—those are the lifeblood of referrals,” he says. “It’s also a great place to go to work and centrally located. That’s still important.”
Historic Renovation
1519 Main St.
WHO: One of Florida’s fastest-growing banks with headquarters in St. Petersburg, 31 branches along the west coast and in Miami and $1.7 billion in assets.
EMPLOYEES: 250 (four in Sarasota)
ANNUAL REVENUE: $72 million
OLD LOCATION: No previous Sarasota branch
MOVED TO NEW LOCATION: May 2014
MAIN REASON FOR MOVE: To serve Sarasota customers in a local branch
WHY THIS LOCATION: C1 had foreclosed on the property and saw an opportunity for a Sarasota branch.
WHY DOWNTOWN: Urban centers fit C1’s strategy of serving mostly small and medium-sized business owners, and the historic building increased local brand visibility.
TIP FOR RELOCATING DOWNTOWN: Don’t shy away from spending money to build or customize the space. And make sure the space says something about you.
For years C1 Bank served Sarasota customers from three branches in Manatee County, but the fast-growing company had long eyed an opportunity to break into Sarasota’s downtown. That came when the bank foreclosed on an historic property on Main Street in 2011.
It wasn’t an easy path. The building had extensive water and termite damage and needed new electrical wiring. After years of planning, more than a year of construction and well over $1 million in renovations, C1 opened its first Sarasota branch in May 2014.
“If we were a restaurant or kitchen store, we could have done anything to the building,” CEO Trevor Burgess says. “Because we are a federally insured bank, the law says if we are in a historic district we have to abide by state and local historic guidelines. We ended up having to change our initial designs to fit within those guidelines.”
Burgess says the façade, canopy, how the ATM integrates with the exterior glass and other design elements had to be changed and cost the firm time and money.
“We like our branches to say something about who we are and about the community we serve,” he says. “If we have to make those kinds of investments, we are happy to do it.”
The building barely resembles a traditional bank. Customers have to use public parking. There’s no drive-through teller, and inside there’s no teller line at all. Customers handle deposits and withdrawals at desks, a “concierge-style” banking that Burgess says fosters relationships with clients, many of whom have come from downtown businesses.
“It’s a great way to get to know those businesses. There’s nothing like being able to come next door and get change for your cash register,” he says. “But honestly, people can do a lot of their normal banking through technology now. We want our branches to more be billboards for the services we offer.”
Relocating to Class A Space
1626 Ringling Blvd.
WHO: Online resource for investors, traders and advisers and organizer of trade shows and educational seminars for financial industry.
EMPLOYEES: 45
ANNUAL REVENUE: $10 million-plus
OLD LOCATION: 1258 Palm Ave. (Bay Plaza)
MOVED TO NEW LOCATION: May 2015
MAIN REASON FOR MOVE: Selling old location after divorce; increase brand exposure
WHY THIS LOCATION: Fit criteria of 40 parking spaces and direct access to office without stairs or elevator, prominent signage, a building with other financial tenants, natural light and open architecture.
WHY DOWNTOWN: Brand exposure, centrally located, close to referral and client financial businesses and amenities such as restaurants.
TIP FOR RELOCATING DOWNTOWN: Find a great commercial broker who can narrow down all the options for you and even find ones that aren’t even listed.
While divorce is rarely a good reason to move, Kim Githler, CEO of MoneyShow, is finding the bright side—in all the natural light and shiny new signage of her new office in Ringling Square. She hopes the new location will help make her financial media company a more prominent player in Sarasota’s downtown district.
“It was a conscious effort to brand our business so people knew we were here,” Githler says. “As far as possible locations, there were a lot of options.”
Githler credits her commercial real estate broker, Mike Migone of Sperry Van Ness, with narrowing down the options that fit her criteria, which included on-site parking spaces with direct access to the office, natural light with open spaces and proximity to other financial businesses. Migone was able to negotiate a lease for the entire fourth floor of Ringling Square, which wasn’t listed on the market.
“He knew everything that was out there and really made it easy,” Githler says. “I did not have to do market research or contact and set everything up. We knew when we hit the home run and he assisted me in my negotiations, which was great.”
Githler says with all the options for Class A space downtown, she could negotiate her terms from a position of relative strength. “You can walk away. [Building owners] know you have other places to go,” she says.
She advises businesses relocating downtown to minimize moving expenses and effort. Set up network and computer systems beforehand, purge old documents and consider selling old office furniture and buying or leasing an entirely new office that can be set up before your employees arrive.
“I only paid about $3,000 for the entire move. Very reasonable,” she says.
When Leaving Downtown Makes Sense
GLOBAL FINANCIAL PRIVATE CAPITAL
501 N. Cattlemen Road
WHO: Firm that manages assets and portfolios and provides support services for businesses, wealth managers and financial advisers nationwide.
EMPLOYEES: 120
ANNUAL REVENUE: $70 million
OLD LOCATION: 2080 Ringling Blvd. and 1549 Ringling Blvd. (PNC building)
MOVED TO NEW LOCATION: June 2015
MAIN REASON FOR MOVE: Space for current staff and future growth
WHY THIS LOCATION: Space available with latest technology infrastructure at good price
WHY NOT DOWNTOWN: Hard to find big enough space with necessary infrastructure; firm did not utilize other downtown financial businesses or need brand awareness
TIP FOR RELOCATING AWAY FROM DOWNTOWN: Plenty of Class A options out east, so find one with the best infrastructure and space to grow
Not all financial institutions see value in locating in the city center. In June, Global Financial Private Capital moved from its own building at 2080 Ringling Blvd. and offices at the PNC building downtown to the Gateway Professional Center on Cattlemen Road just north of Fruitville Road.
Growth drove the move, with the company increasing from 50 to 120 employees in five years. COO Gregg Guinta says since the company is a national firm, it didn’t need the ancillary benefits of operating downtown, such as local referrals and brand exposure through signage.
“It was really about growth potential as it relates to square footage,” Guinta says. “We looked at nothing but Class A space, and we did our due diligence on the economics, technical infrastructure and growth potential, and Gateway had all that.”
Guinta says one of the biggest hurdles downtown was the added cost of trying to get high-speed Internet and communications lines into existing buildings. The company saved a “moderate” amount of money at Gateway, which had the infrastructure in place, compared to downtown options. ■