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Winter Park building buy sets up public company CTO’s new local office

By Ryan Lynch  –  Staff Writer, Orlando Business Journal

A recent building purchase will result in local real estate investment trust CTO Realty Growth Inc. bringing a bigger presence into Winter Park in the coming months.

The Daytona Beach-based REIT (NYSE: CTO) earlier this month completed a sale-leaseback of the 28,000-square foot office building at 369 N. New York Avenue in Winter Park with Columbus, Georgia-based Synovus Bank. CTO on Dec. 20 spent $13.2 million, or $471.43 per square foot, to buy the three-story building, including the surface parking and the Synovus Bank drive-thru, Orange County records showed.

A sale-leaseback enables a company to sell an asset to raise capital, then, it can lease that asset back from the buyer — giving it cash as well as the asset it needs to operate its business.

CTO — one of Central Florida’s largest publicly traded companies with $56.38 million in 2020 revenue, based on Orlando Business Journal research — this month opened a temporary office in the building. It eventually wants to have a third of its total staff — 18 people, as of Dec. 29 — work there, with the balance in Daytona Beach, said Matthew M. Partridge, CTO senior vice president, CFO and treasurer. The REIT expects to hire an undisclosed number of workers in 2022, with the expectation that most would work in Winter Park, Partridge told OBJ. Additionally, CTO President and CEO John Albright lives in Winter Park.

CTO is occupying an undisclosed amount of space on the building’s third floor, but sometime during 2022’s first half eventually will occupy about 4,500 square feet of second-floor space — though the final number isn’t finalized, Partridge said. Synovus will occupy the balance of the space on second floor, he said.

CTO may also redevelop the property in the future into “combination of retail, office and residential components,” the REIT said in a news release. The property has a total allowable floor area ratio of over 80,000 square feet. No redevelopment timetable or plans have been finalized, Partridge said.

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Daytona Beach-based CTO, Texas-based Timberline close 1,600-acre deal

By Richard Bilbao  –  Digital Producer/Senior Staff Writer, Orlando Business Journal

Daytona Beach-based CTO Realty Growth Inc. (NYSE: CTO) has completed the sale of approximately 1,600 acres of land in Daytona Beach to Austin, Texas-based Timberline Real Estate Partners affiliate Timberline Acquisition Partners.

CTO, a real estate investment giant, closed the deal as part of a joint venture with Evanston, Illinois-based hedge fund Magnetar Capital on Dec. 10. The closing price for the deal was $66.3 million — or nearly $41,000 per acre, according to a news release.

The funds from the Timberline sale will go toward repaying its unsecured revolving credit facility, as well as general corporate and working capital purposes.

“We’re thrilled to be completing this final land sale, which provides us with meaningful non-income producing equity to redeploy into our core investment strategy of acquiring high-quality, multi-tenanted retail and mixed-used properties,” said John P. Albright, president and CEO of CTO Realty Growth, via a prepared statement. “As we look toward 2022, the redeployment of proceeds from this final sale will enhance our corporate credit metrics, improve our dividend coverage and drive increased organic [funds from operations] and [adjusted funds from operations] per share growth.”

Uses for the land include a logistics park, multifamily, retail and commercial, previously said Timberline CEO Stan Nix in a prepared statement. Executives with the company were not available for comment.

Big land owner

CTO said the sale ends a 111-year role it held as a significant land owner in Florida, which at one time amounted to approximately 2 million acres. The company had been selling off its remaining 11,000 acres over the past 10 years for more than $287 million combined. Those proceeds were reinvested into other company assets.

The land deal comes on the heels of an even bigger local transaction that occurred in July 2020.

That’s when Orlando-based developer Avalon Park Group/Sitex Properties USA Inc. bought 3,015 acres from CTO for about $40.9 million, or $13,565 an acre. That’s where Avalon Park Group/SitEX plans to build 10,000 residential units along with other commercial development.

Construction trends

New construction starts rose 10% to $889.7 billion in September, according to Hamilton, New Jersey-based Dodge Data & Analytics. Non-residential starts gained 15% to hit $281.8 billion. However, that’s not without some challenges.

“Construction starts have struggled over the last three months as concerns over rising prices, shortages of materials and scarce labor led to declines in activity,” Richard Branch, chief economist for Dodge Construction Network, said in a prepared statement.

“The increase in September, however, partially allays the fear that construction is headed for a free-fall and shows that owners and developers are still ready to move ahead with projects. Starts are likely to continue to trend in a positive but sawtooth fashion in the coming months until a more balanced recovery takes hold next year.”

Avalon Park Daytona poised to break ground for 1,600 homes, retail space later this year

First phase to bring 1,600 homes, commercial development to area west of I-95

DAYTONA BEACH — Orlando developer Beat Kahli confirmed plans to break ground on the first phase of his massive Avalon Park Daytona Beach development here in the second half of this year.

The native of Switzerland also expects to soon complete his purchase of 6,200 acres of timberland on the other side of Tiger Bay State Forest for his development. He hopes to build a 300-megawatt solar farm, pending regulatory approval.

The initial phase of Avalon Park Daytona Beach will bring more than 1,600 homes and 90,000 square feet of commercial space to an area along the south side of State Road 40/West Granada Boulevard roughly a mile west of Interstate 95.

A number of area residents have raised concerns about the enormous size of the planned Avalon Park Daytona Beach development. But consider this:

The commercial space in the initial phase will be less than double the size of the 53,000-square-foot mega Buc-ee’s convenience store that opened March 22 four miles to the south, next to the I-95/LPGA Boulevard interchange.

Upon full build out, however, the 3,000-acre Avalon Park Daytona Beach development is slated to have 10,000 homes, townhouses and apartments and 1 million square feet of commercial space. The latter would be nearly the size of Volusia Mall.

Kahli said it likely will take at least 20 years to get to that point.

“Look at how long it took for Avalon Park Orlando,” he said. “We moved in the first homeowners in the summer of 1999. It took us five to six years to have the core of the town and more than 20 to finish it. I always like to grow organically. It’s not a sprint, it’s a marathon.”

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Ohio developer faces competing bid by Chicago developer to build new VA clinic in Daytona

DAYTONA BEACH — One thing appears certain: the Daytona Beach area will soon be getting a new Veterans Affairs outpatient center. What has yet to be determined is who will build it.

Just days after a Cleveland, Ohio, developer became the first to publicly unveil plans to build a VA clinic here, a Chicago, Illinois area-based developer has stepped forward with its competing project that would be built next door.

And there could be more, conceded Joshua Hausman, a principal and co-owner of Lake Forest, Illinois-based WD Schorsch.

“We would welcome the opportunity to build the VA clinic in Daytona Beach,” said Hausman whose company submitted its bid under the name of a subsidiary called JTW Development. “The fact is, it’s a closed bid process so we have no idea who we’re competing with.”

John Albright, CEO of Daytona Beach-based CTO Realty Growth Inc., confirmed that JTW Development agreed in January to put 15 acres under contract to buy from his company. The site is along the west side of Williamson Boulevard, one block north of LPGA Boulevard.

Albright said a third developer had been looking to potentially buy another site further north on Williamson from his company in hopes of competing to land the federal government contract to build the new VA clinic. That developer backed out after the federal government ruled out the site because of potential flooding concerns.

Albright declined to identify the third developer. He said the federal government’s rejection of the site was because of an “old map that needed to be updated.” “It’s not actually in a flood plain,” he said.

“I hear there actually could be another (fourth) developer out there (bidding for the VA contract) as well.” he added. “I don’t know where the other site is.”

The federal government is expected to make its decision by the end of September.

The VA clinic that Hausman’s company is proposing to develop would be a two-story building offering a total of 138,108 square feet of space, according to a copy of site plans obtained by The News-Journal.

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JTD Land plans new homes in Daytona Beach

By Alex Soderstrom  – Staff Writer, Orlando Business Journal

A recent land buy in Volusia County will tee off the construction of 140 new homes near the LPGA International golf course. 

Kissimmee-based developer JTD Land Co. LLC bought 98 acres in Daytona Beach in a deal that closed Aug. 11, CTO Realty Growth announced. The entity that sold the property is related to Daytona Beach-based CTO (NYSE: CTO).

‘Aggressive’ for local land 

JTD Land paid $2.8 million for the land and plans to develop the site into a subdivision with single-family homes that can be accessed via LPGA Boulevard. JTD Land Vice President Craig Harris declined to comment on the project. 

The timeline for the project is unknown. 

It’s not the only planned development near the LPGA golf course. Clearwater-based Boos Development Group Inc. wants to rezone roughly 61.4 acres northeast of LPGA Boulevard and Tournament Drive for apartments and 11 commercial parcels for its Tymber Creek Village project, according to documents recently filed with the state. 

The area has seen “virtually no” development activity since the early 2000s, which makes it ripe for new construction as Daytona Beach grows, John Albright, president and CEO of CTO, previously told Orlando Business Journal. In recent years, new residential and commercial developments nearby, such as Latitude Margaritaville and a Trader Joe’s distribution site, have brought new homes and jobs to the area, which creates demand for more retail and apartments.

Volusia County is ideal for single-family home development due to its low cost of land, Brad Parker, a land expert with Longwood-based Southern Realty, told OBJ. As suburban Orlando counties such as Osceola County get more expensive for construction, development will move further outside Orlando, he said. 

“I see people getting more aggressive to get land in Volusia County.” 

Home demand on the rise  

New homes are important locally because construction creates jobs and subcontractor opportunities. Plus, local housing activity often is considered a reflection of the overall health of the local economy. Every home sale in the state has an estimated local economic impact of $77,858, according to a 2018 study by the National Association of Realtors. 

There were 1,154 homes sold in the Daytona Beach area in the first quarter, up 19.6% from 965 sold in first-quarter 2019, according to the most recent data from the Daytona Beach Association of Realtors. The median sales price of $250,000 was up 6.4% from first-quarter 2019’s $235,000. 

Like Daytona Beach, home sales are up in Orlando. There were 3,103 homes sold in the region in June, down 9% from 3,412 sold in June 2019, but up 45.9% from 2,127 sold in May, according to the Orlando Regional Realtor Association.

Home prices in Orlando are higher than Daytona Beach, with Orlando boasting a median home sales price of $265,000. 

Boos Development to build apartments, retail near LPGA International golf course

By Jack Witthaus  – Staff Writer, Orlando Business Journal

A Clearwater developer wants to build a mixed-use project near a Daytona Beach golf course to cater to the area’s fast growth.

Boos Development Group Inc. wants to rezone roughly 61.4 acres northeast of LPGA Boulevard and Tournament Drive for apartments and 11 commercial parcels for its Tymber Creek Village project, according to documents filed with the state. The site currently features woods and wetlands and is zoned for single-family homes.

Plans call for retail space to include an auto parts store, bank, coffee shop, medical offices and a drug store. A Boos Development representative wasn’t available for comment.

The estimated project cost and timeline weren’t known.

The area has seen “virtually no” development activity since the early 2000s, which makes it ripe for new construction as Daytona Beach grows, said John Albright, president and CEO of Daytona Beach-based CTO Realty Growth (NYSE American: CTO), who isn’t involved in the project. In recent years, new developments nearby such as Latitude Margaritaville and a Trader Joe’s distribution site has brought new homes and jobs to the area, which creates demand for more retail and apartments.

“It’s kind of like an oil well being drilled and hitting the mother lode,” Albright said of area’s commercial demand.

Developer completes $40.9M buy of 3,000 acres in Daytona

The developer of the planned 10,000-home Avalon Park Daytona community north of Latitude Margaritaville on Tuesday completed his $40.9 million purchase of more than 3,000 acres. Developer Beat Kahli says he expects to break ground in 2021.

DAYTONA BEACH — Developer Beat Kahli took a big step this week to bringing his vision of creating a new town here closer to reality.

The developer on Tuesday completed a $40.9 million purchase of just over 3,000 acres along the south side of State Road 40/West Granada Boulevard.

“We’re going full speed ahead,” said Kahli, the chairman and CEO of Orlando-based Avalon Park Group and SitEX Properties USA.

Kahli said he plans to break ground on the community called Avalon Park Daytona in 2021.

On full build-out the community is expected to bring 10,000 homes and a 400-acre downtown to the fast-growing area west of Interstate 95. It will be directly north of the Jimmy Buffett-themed Latitude Margaritaville 55-and-older community and ICI Homes’ 1,200-home Mosaic “full life” community off of LPGA Boulevard.

The land sale is the biggest ever in terms of dollar amount in the Daytona Beach area to a single developer, according to John Albright, the CEO of CTO Realty Growth Inc.

CTO was the seller of the 3,015 acres to Kahli’s SitEX Properties USA. Albright’s company changed its name earlier this year from Consolidated-Tomoka Land Co.

CTO’s previous biggest land sale to a single developer was its $27.2 million sale in 2017 of 1,581 acres to Minto Communities, developer of the 3,400-home Latitude Margaritaville.

″(Kahli’s purchase) is an incredible confirmation that Daytona is a very attractive location for developers,” said Albright.

“The success of Latitude Margaritaville (one of the nation’s fastest-growing 55-and-older communities in 2018 and 2019) showed that this area is highly desired,” he added.

Volusia County Property Appraiser Larry Bartlett said the land purchase by Kahli is the third largest in county history.

The biggest was a $81.2 million land sale in 2006 of roughly 5,900 acres in New Smyrna Beach to an entity known as Hammock Creek Green LLC. That same tract of land was sold in 2013 for $61.5 million and is now part of the 47,000-acre Farmton development site in southeast Volusia County that is owned by Chicago, Illinois-area developer Miami Corp.

A 1,600-acre portion of the land that Kahli purchased Tuesday was originally under contract to be sold to Minto as future expansion space for Latitude Margaritaville.

Kahli’s purchase combines both that parcel with 1,000 acres just east of Tiger Bay State Forest that were originally under contract to be sold to ICI Homes Chairman and CEO Mori Hosseini.

Both sites were entitled to accommodate residential communities that would have had thousands of homes and separate neighborhood retail centers.

Kahli’s purchase also included two additional land parcels. One is a 150-acre swath of land directly west of where Hand Avenue currently ends on the other side of I-95. The other is a 286-acre parcel that mainly consists of wetlands on the east side of Tiger Bay State Forest.

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More retail coming to Daytona’s LPGA Boulevard

Site work has begun on three new retail projects just east of the Interstate-95/LPGA Boulevard interchange in Daytona Beach: a highly anticipated Buc-ee’s mega-sized gas station/travel convenience center, a new shopping center called Williamson Crossing, and a pair of new retail buildings at Tomoka Town Center.

DAYTONA BEACH — When Pete Tavolacci decided to open his Dominic’s Deli & Eatery at Tomoka Town Center in February, he did so because of the tremendous growth both at the center as well as the surrounding area.

“We were looking for an expansion site and this was a perfect fit,” said Tavolacci, who also owns a Dominic’s Deli in Palm Coast.

The Interstate 95/LPGA Boulevard interchange area is home on its east side to both Tomoka Town Center, the neighboring Tanger Outlets and the new Sam’s Club that opened in July.

On the west side is the new Publix-anchored Latitude Landings shopping center that opened in November next to Latitude Margaritaville and is set to soon add more shops and restaurants.

And more commercial growth is on the way.

This past week, site work began on not one, not two, but three new retail projects in the area just east of the Interstate-95/LPGA Boulevard interchange.

Land is now being cleared for the highly anticipated Buc-ee’s mega gas station/travel convenience center, a new retail center called Shoppes at Williamson Crossing, and a pair of new retail buildings at Tomoka Town Center, across from, Tavolacci’s deli/restaurant.

Jeff Preston of North American Development Group, the developer of Tomoka Town Center, which welcomed its first stores just over a year ago, confirmed that his company has begun construction of two side-by-side standalone retail buildings. One will become home to a Verizon Wireless store. The other will be offer storefront spaces for multiple tenants.

A site has also been cleared up the street from the two future retail buildings for a planned antique car-themed restaurant called Ford’s Garage, which is expected to soon start vertical construction, Preston said.

Talks also are underway with the Miller’s Ale House restaurant chain which has shown interest in possibly building a new standalone eatery on the undeveloped lot immediately south of the new Sam’s Club.

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Orlando developer unveils major project near Daytona’s Margaritaville

An Orlando developer has announced plans for a massive 2,600-acre mixed-use development along State Road 40 north of Latitude Margaritaville that could become home to 10,000+ residents as well as businesses. The developer also says Avalon Park Daytona will add more than $2 billion in tax revenues for the city and county.

DAYTONA BEACH — Latitude Margaritaville is about to get a big new neighbor.

An Orlando developer has agreed to buy 2,600 acres of undeveloped land directly north of the fast-growing Jimmy Buffett 55-and-older community here.

Plans call for creating a massive mixed-use development called Avalon Park Daytona, that upon completion in a decade or more, will become home to more than 10,000 residents as well as businesses.

Upon completion, the massive development will stretch along the south side of State Road 40/West Granada Boulevard just east of Interstate 95, from Tymber Creek Road west to Tiger Bay State Forest.

It will be across from Ormond Beach’s Breakaway Trails and Hunter’s Ridge communities on the north side of SR-40.

“The intention is to begin developing immediately, but until the site plan gets approved (by the City of Daytona Beach) we won’t be able to put a timeline on it,” said Stephanie Lerret, a spokeswoman for the project’s developers, Orlando-based Avalon Park Group and Switzerland-based SiteEx Properties Holding AG.

Beat Kahli, a Swiss national who is CEO of both Avalon Park Group and SiteEx, said his goal is to start infrastructure work late next year and begin construction of the first homes, along with a small “downtown” in early to mid-2021.

“We are not just developers, we’re town builders,” he said in a phone interview.

While plans for Avalon Park Daytona have yet to be finalized, Kahli said he envisions building a town that will have approximately 6,000 homes, including single-family houses, apartments and townhouses, as well as restaurants, shops, a grocery store, schools, medical facilities, churches, and offices.

Kahli said he is also planning to launch a global network of “co-use office” complexes called The 5th Floor that will include a location at Avalon Park Daytona.

For a membership fee, businesspeople can work out of and meet with clients at any 5th Floor location, including Orlando, Tampa, as well as in Australia, Singapore, and Switzerland.

Avalon Park Daytona, when fully built out, will add more than $2 billion in ad valorem tax revenues for the City of Daytona Beach and Volusia County, Kahli said.

Although the north side of State Road 40/Granada Boulevard is Ormond Beach, the land Avalon Park Group is buying from Consolidated-Tomoka Land Co. and Magnetar Capital is within the city limits of Daytona Beach.

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Orlando’s Avalon Park Group under contract for 2,500+ acres next to Margaritaville at Daytona

By LAURA KINSLER
GROWTHSPOTTER
DEC 10, 2019 | 4:19 PM 

This is an example of the type of mixed-use building that bidder Avalon Park Group plans to build in the town center of its new master planned community in Daytona Beach. (Avalon Park Group)

Orlando-based Avalon Park Group has signed a purchase agreement to developer over 2,500 acres in Daytona Beach for a new master-planned community that will likely exceed the size of its namesake community in Orange County.

The land is currently owned by Consolidated- Tomoka Land Co and is located on State Road 40, just west of Interstate 95, next to Latitude Margaritaville.

“This property gives us a great canvas to create a place where people can find everything they need in every stage of their lives,” said Beat Kahli, CEO of Avalon Park Group and its Swiss sister company, sitEX. “When complete, Avalon Park Daytona will be a destination the city and the area will be proud of.”

He told GrowthSpotter the company has already begun the master planning process for the site, while CTLC finalizes the entitlements. He met yesterday with Daytona Beach officials to begin the discussions for a transportation network that will link directly to the Margaritaville-branded retirement community on its southern border.

Avalon Park Group has a purchase contract for two parcels (yellow star) totaling nearly 2,600 acres in Daytona Beach. The master planned community will share a border with Latitude Margaritaville. (Consolidated Tomoka Land Co./staff edit)

Avalon Park Daytona will be designed using the company’s signature New Urbanist concepts, with thousands of homes and its own downtown city center. Kahli said he expects the build out period to extend beyond 10 years and eventually reach $2 billion in value.

Avalon Park Group began constructing its first master-planned community more than 20 years ago. The company is also currently developing Avalon Park-branded communities in Wesley Chapel, just north of Tampa, and in Tavares with the same design principals.

“We are long-term developers,” he said. “I’m still young enough to build another town.”

It was that long-term commitment, and strong financial standing, that led Consolidated Tomoka to approach Avalon, according to President and CEO John P. Albright. He told GrowthSpotter Avalon was recommended to him by a homebuilder because of its successful track record.

“There’s a demand for homesites from builders who need a developer to deliver a high quality community that will stand the test of time,” Albright said. “They’re the perfect kind of developer to build something that’s more holistic and has a long-term view.”

The master plan will be unveiled in the first quarter of 2020, but Kahli said one thing is certain: that APG would commence construction on its town center during the first phase of construction. That includes its typical 4-story mixed-use buildings with multifamily and commercial upstairs and ground-floor retail.

“That’s our forte,” he said. “We build a town organically. We built Avalon Park Orlando from scratch where before it was just cows. Now we have 60,000 people and our own downtown. There’s not so many people who build entire towns and stick with it for 25 years.”

Kahli said the Daytona site was attractive because it extends the company’s footprint further east along the I-4 corridor.

“We’re in Tampa, Orlando and now Daytona,” he said. “We’re excited that we now have that last piece of the puzzle. We believe it’s one of the most exciting economic corridors in the U.S. It gives us synergy because each site is far enough apart that they don’t cannibalize each other. ”

Kahli said he has invited Daytona Beach officials for a follow-up meeting at Avalon Park Orlando, so they can get a perspective of what the finished product will look like. Company executives and planners also will meet with Volusia County school officials to discuss planning for future school sites within the community.

“We want to invest in schools, no question,” he said. “I have 200 employees here in Avalon Park, and most of them moved here because of the schools. We will either do a partnership with the school board and offer them sites or do a charter school – or both – and hopefully even partner with a university.”

Kahli said APG will lead the initial planning with its in-house staff but will seek local consultants for environmental and transportation planning.

Albright said he anticipates the land closing in early summer 2020. This is the second time this month Consolidated Tomoka has partnered with an Orlando developer. The company sold 31 acres near the I-95/LPGA Boulevard interchange to Unicorp National Development for $4.6 million.

“We’re excited that Chuck (Whittall) has bought the property,” Albright said. “He’s planning to do multifamily, which we’re greatly in need of. We’re excited to get his expertise.”