By taking a trio of office buildings along Interstate 4 down to zero tenancy, the longtime owners of 7.2 acres of office property just across from Winter Park’s western reaches hope to capitalize on market conditions that favor redevelopment.
Combined, the three existing buildings total approximately 98,400 square feet of leasable Class B space. But interest from developers has focused on zoning that dates to the properties’ development in the late 1960s and permits usages including retail, hotel or dealerships in addition to the current office use, CBRE Capital Markets Executive Vice President Ron Rogg told GrowthSpotter on Wednesday.
“That was intentional,” he said of letting the property become vacant with a possible highest and best use in mind. When two buildings emptied as Everest University closed its doors amid a bankruptcy case and reported sales of some of its campuses, the Clayton family that owns the property employed a counterintuitive way of thinking.
“They didn’t try to aggressively backfill the space. It’s more valuable and more marketable as existing redevelopment or for some kind of alternative use,” Rogg said. “So the strategy became, ‘Let’s not go through a leasing and retenanting process,’ wanting to really take advantage of what the market was and monetize it. Really the land value is worth more without the buildings on it, rather than have occupied buildings.”
The Clayton family began developing the property in the late 1960s. At 5405 Diplomat Circle, the Diplomat Building offers 28,509 square feet of conditioned space in one story built in 1970 on 1.62 acres. At 5420 Diplomat Circle, the Promenade Building offers 30,446 square feet of conditioned space in two stories built in 1971 on 1.42 acres. At 5421 Diplomat Circle, the Ambassador Building, one of two that were home to Everest University, offers 38,511 square feet of conditioned space in one story built in 1973 on 2.38 acres. Frontage along I-4 totals 568 feet.
Traffic counts surpass 170,000 vehicles daily, Rogg said of the property just north of Home Depot. A long-term lease with a single tenant remains under consideration, Rogg said, with a handful of prospective clients showing interest.
But Rogg says most inquiries have come from prospects “vaguely hinting” at mixed-use redevelopment of some sort.
“They’re doing some background checking on zoning, setbacks, those sorts of things before they can really disclose anything,” he said.
Recently, Tennessee-based developer 3H Group began due diligence on building a hotel, restaurant pad and two-story office building on an Altamonte Springs property where it owns two long-vacant office buildings.