Thursday, July 10, 2008

How Much Are Them Sentinel Buildings Worth?

Sam Zell's forte is real estate. That's how he made the millions that he chose - wisely - not to invest in Tribune. He announced several weeks ago intentions to put the classic Tribune and LA Times buildings on the auction block. But there's been no mention of the Orlando Sentinel property.

The Sentinel buildings ain't pretty. If memory serves me correctly, the main building on Concord Avenue used to be a Sears oh so many years ago. This accounts for the building's two-story height and corridors that make odd twists and turns. Nobody will want to buy this Frankenstein.

But ... the land surely is another story. The Sentinel's strategic location just north of downtown - walking distance to City Hall and the main drag on Orange Avenue - may set a gleam in Zell's eyes. Sure, real estate prices are down now, but they will bounce back. When they do, there won't be enough staff left to fill the Sentinel building and that will be a perfectly good excuse to sell and "maximize assets."

Don't be surprised if in the next three years or so, employees are moved out of the Sentinel buildings on North Orange Avenue and relocated in a strip mall. In fact, I know of the perfect location: the old credit union building on Colonial Drive just minutes from I-4!! Yes, all 3,000 square feet.

Then we can all watch in awe as another 20- or 30-story glass monstrosity takes over the spot.

5 comments:

Portd032 said...

Funny you should raise the question, so I went to the property appraisers website to check. It shows that assessed value for 633 N. Orange Avenue is $25 million.

Maria Padilla said...

Hey David,
The assessed value is always lower than a property's market value. If the value of 633 North Avenue were only $25 million, then Sam Zell has wasted his time and efforts, at least as far the Sentinel goes. I'm willing to bet that the market value is at least 3 to 4 times that amount. Assuming that is true, it's still chicken feed compared with the billions in debt Tribune is carrying. In other words, it ain't going to make a dent.

Portd032 said...

I agree. But of course it also depends on how you want to develop that property. Three years the economy rebounds and that could be the hottest spot in Orlando. Think about the land downtown where they're building the new arena. Six years ago it was just rundown Parramore property and now.....
but there's absolutely no doubt that Zell is supposed to be so smart, but he clearly made a bad deal!!!!!

Maria Padilla said...

I agree with you, Dave, that Zell made a bad deal. That's what happens when you enter industries that you know little about. Although he's not doing too bad because he didn't risk a lot of his money. Now that was smart...

Yes, in 3 years North Orange Avenue will be swinging - especially after the arena is built. It's a great piece of property - two city blocks - to develop into something shiny and new ...

Anonimo en Orlando said...

Hello Maria, I was a part of the focus group you had in support of El Sentinel way back when. I'm still employed at OSC so just call me Anonimo en Orlando.

I wanted to add to your discussion about the Sentinel Bldgs. We recently vacated most of everyone in the 501 Orange Ave Bldg and the 4 story Amelia Bldg. The old CFN13 building across the street is also mostly vacant. Those 3 bldgs, along with the parking, directly across from the courthouse have got to be worth a pretty penny on their own. Even without including the 633 and the Production bldgs.