Business Observer 8.6.21

AUGUST 6 - AUGUST 12, 2021 | THREE DOLL ARS

FLOR IDA’S NE WSPAPER FOR T HE C - SUI T E

Strategies | Companies jump through hoops to work with college athletes. PG.7 PASCO • H ILL SBOROUG H • PIN ELL AS • P OLK • M A N ATEE • SA R ASOTA • C H A R LOT TE • LEE • COLLIER

Bar None A $10 million soap company’s path to raising capital has taken several twists. The payoff could boost the business to new heights. PAGE 10

Deanna Wallin | NAPLES SOAP CO., CEO

STEFANIA PIFFERI

COMPANIES

COMMERCIAL REAL ESTATE

RETAIL

Strike Gold

Neighborhood Watch

Food Fight

St. Pete company with new spin on an old product for competitive swimmers gets some traction in the Olympics.

PAGE 3

In a $6.35 million deal, investors have purchased the last undeveloped gated community on Siesta Key. PAGE 5

REAL ESTATE

With economies of scale that can crush Publix, Kroger targets three Florida cities for expansion.

PAGE 8

TRENDS

DATA SNAPSHOT

COMMERCIAL REAL ESTATE

Whine and Dine

Heated Moment

Uptown Style

National report that looks at states and cities with the most customer service complaints singles out Florida.

PAGE 5

Developers behind the University Mall transformation aim to change not only the mall but the industry as well.

PAGE 12

Bradenton multifamily complex sells for $53 million. 13 Sarasota investor seizes quick opportunities. 14

PAGE

15 Want staff to trust the new CEO? Plan ahead.

DID YOU FIND IT THAT WAY? 348953-1

DON’T MISS

Pair of Florida universities offer a big warning about the state’s super-hot housing market.

PAGE 6

Tampa firm completes $1.32 billion sale, pays down debt. 12

See Page 3

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BUSINESS OBSERVER | AUGUST 6, 2021 – AUGUST 12, 2021

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Vol. XXV, No. 29

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Founded in 1997, the Business Observer is Southwest and Central Florida’s newspaper for business leaders. With offices in Hillsborough, Pinellas, Polk, Pasco, Manatee, Sarasota, Charlotte, Lee and Collier counties, the Business Observer is the only weekly business newspaper that provides business leaders with a regional perspective. The Business Observer’s mission is to deliver relevant news and information on Southwest and Central Florida’s leading and growing companies, upand-coming entrepreneurs, and economic, industry and government trends affecting business.

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“The road is cleared,” said Galt. “We are going back to the world.”

He raised his hand and over the desolate earth he traced in space the sign of the dollar.

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CoffeeTalk

3

ADVERTISEMENT

BY THOMAS B. LUZIER

Next generation

EMILY WALSH

MATT WALSH ger to work with the Observer Media Group’s leadership team to ensure the company continues to carry out its mission into the next generation.

“We’re committed to being your local community newspaper for many years to come, and we’re also committed to innovating and elevating, as our vision statement says,” Emily Walsh says.

This week, Emily Walsh announced another promotion among the Observer Media Group’s leadership ranks: Kat Hughes, the executive editor of the Sarasota-area Observers, in addition to the Business Observer, was named COO. Founded in 1995 by Matt and Lisa Walsh and David and Ruth Beliles, Observer Media Group publishes the Longboat, Sarasota, East County, Siesta Key and Business Observers; West Orange Times & Observer; LWR Life; and Season magazine.

Splish splash GMX7, an athletic gear company, is making waves with a resistance training tool being used by over half of the Team USA Olympic swimming team.

Seven-time Olympic gold medalist David McCagg founded the St. Petersburg-based company. When McCagg trained for competitions and the Olympics in the 1970s, his resistance training came from something called power towers.

When McCagg returned to the sport — after nearly four decades of focusing on his real estate career — he noticed swimmers hadn’t upgraded their equipment. “This is no different than what we used, but this is after 40 years,” he tells Coffee Talk.

McCagg set out to make a change, first starting with the size of a power tower. Weighing upwards of 230 pounds, power towers aren’t easily transportable.

“Resistance training is the key to winning,” McCagg says. Noting the importance, McCagg connected with Sarasota-based product design company Robrady to see if some changes were possible.

“They said, ‘No, it couldn’t be done,’” he says. But just a couple weeks later, CEO and Design Director Rob Brady reached out with an idea.

By the time Brady was done with it, the product was life-changing for swimmers. The X-1 PRO is compact and portable, being only 6 inches long.

The weighted device is hooked on a line that stretches the length of the pool.

The resistance levels provide endless workouts for swimmers of all levels.

DID YOU FIND IT THAT WAY? An unexpected upside of the never-ending pandemic has been the chance to spend lots of quality time with loved ones. Dinners around the table, movie nights, hypercompetitive Uno games— occasions to enjoy and celebrate.

So much togetherness also reveals those less-appealing habits that can drive you mad when you’re cooped up in your house. How many times do you really have to ask your thirdgrader to put away his Legos?

You could say the same about how sellers leave things for their buyers.

While those who patch the nail holes and vacuum their way out the front door are the unicorns of the real estate world, there is a general sense of pride that comes from leaving the place like you found it, i.e., clean and empty.

But what about those who consider it someone else’s problem to scrape through the layers of oven crust or unload the myriad “free” tools and furnishings left strewn about in the wake of their hasty departure?

COURTESY

DAVID MCCAGG, a seven-time gold medalist and the founder of GMX7, set out to change how elite athletes train.

With the company’s new X1-PRO product, swimmers of any level can train with varying levels of resistance.

“In layman’s terms, we developed the iPhone versus the pay phone,” McCagg says. The device corrects a swimmers stroke and mitigates injury while providing smooth and consistent resistance.

In partnership with 12-time Olympic medalist Ryan Lochte, GMX7 started out testing the product with elite swimmers. The X-1 PRO has since won a silver medal on the America by Design TV series, where Lochte, in the first episode, discusses the product’s impact on his life. “I’ve tried every resistance tool, and hands down, this is the best one,” Lochte says in the show. “If you don’t have this as a swimmer, you’re going to fall behind.”

See COFFEE TALK page 5

The FAR/BAR contracts are vague on the subject, specifying only that “at Closing Seller shall have removed all personal items and trash from the Property.” It was probably smart of the contract committee not to start down the slippery slope of defining cleanliness standards, making agents arbiters of what’s clean and what’s not.

Section 6(a) obligations to remove personal items and trash from the Property include removal of all furniture, fixtures and equipment not otherwise described in the Personal Property that conveys at Closing. The Property will be left in broom-swept condition, with all bathroom and kitchen fixtures and equipment left in a clean and sanitary manner.”

Be aware that this does not specify a particular remedy should the property not be left in the required condition. To pre-agree to a credit amount, for instance, could shortchange the buyer, depending on how bad things are at closing.

Likewise, agreeing upfront that a failure to meet the requirement results in a credit for the cost of remediating is, in effect, a blank check, and it puts agents in the middle of an argument over what is and isn’t clean and sanitary.

In short, there’s no perfect answer when your seller gets lazy. Rather, the point of this exercise is to make abundantly clear what you would think goes without saying: the expectation that the home will be left clean and empty at closing.

How does an agent anticipate the situation of buyers arriving to find a frat house versus a show house?

One possible solution is language in the offer to this effect: “Seller’s

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Emily Walsh has been named president of the Observer Media Group, continuing a multigenerational lineage at the helm of the Florida media company.

Matt Walsh, Emily Walsh’s father, announced the promotion at the company’s annual meeting in June.

Matt Walsh will step back from some leadership responsibilities, though he will retain his position as CEO. The Sarasota-based Observer Media Group publishes the Business Observer, among other publications statewide.

“In the life of just about every company, there’s a time when it needs new energy and new perspectives,” Matt Walsh says. “Emily and her team are going to bring that to what the Observers do while at the same time never forgetting our roots: that we are a local news media company that is totally committed to providing relevant, useful local news to our readers.”

Emily Walsh, 41, has served as publisher of the Observer Media Group’s Sarasota-based newspapers, magazines and websites since 2016. She joined the company 20 years ago as a photographer for the Black Tie section of the Longboat Observer, later serving as editor of the Black Tie and Arts & Entertainment sections, an advertising sales executive and chief digital officer.

Walsh has taken a leading role in the company’s digital operations for more than a decade, managing the launch of YourObserver.com in 2009 and the digital marketing and advertising agency Digital Observer Media in 2013.

Matt Walsh says the company has been preparing for Emily Walsh to step into this leadership role for years. Emily Walsh says she was ea-

4 topstories from BusinessObserverFL.com

BUSINESS OBSERVER | AUGUST 6, 2021 – AUGUST 12, 2021

BusinessObserverFL.com

CHARLOTTE-LEE-COLLIER

Resort project plans restart One of the most anticipated tourism development projects in decades in Charlotte County, Sunseeker Resort Charlotte Harbor, plans to restart construction after a 17-month pandemic-forced shutdown.

Officials with Allegiant Travel Co., the airline behind the project, announced the move in early August. Sunseeker Resort plans include a hotel and condo towers in addition to restaurants, bars and retail stores. Allegiant paid $35 million for the land, and in early 2019 it had secured at least $175 million in financing from investment firm TPG Sixth Street.

Community advances high school The first high school in Babcock Ranch is moving forward, now with the completed design.

The state-of-the-art high school includes a 40,000-square-foot multipurpose field house, which will serve as both an emergency shelter and a recreation center, according to a statement.

Studio+ and DAG Architects designed the project.

The high school and the field house are being designed and built concurrently, the

quote of theweek Trees do not grow to the sky and neither do home prices. We’re nowhere near where we were at the peak of last housing cycle, but we do need to be careful.

Ken Johnson | Real estate economist, Florida Atlantic University SEE PAGE 6

release adds, and should be ready for the 2022-23 school year. Encompassing 18,000 acres, with 19,500 planned residences and 6 million square feet of commercial space, Babcock Ranch, north of Fort Myers, is billed as the first solar-powered town in the country.

TAMPA BAY

Miami bank expands into area A Miami area bank is opening two new offices in Florida, including one in St. Petersburg.

Professional Bank’s local office will be a loan production office. A spokesperson says Professional Bank is currently looking at space in downtown St. Petersburg, and the second Florida office will be in Jacksonville. Professional expects to finalize leases in both cities in the next several weeks.

Professional Bank was founded in 2008 and went public in 2020.

Firm wins drug approval Alzamend Neuro has received permission from the U.S. Food and Drug Administration to move forward with a phase one clinical study of AL001, a treatment for patients with Alzheimer’s disease and dementia.

In a statement released to investors, Stephan Jackman, the CEO of the Tampa-based firm, thanked the FDA for its expediency and says, “We are advancing the process and expect that the first patient will be dosed in September 2021.”

Alzamend is a preclinical stage biopharmaceutical company working on products to treat Alzheimer’s disease and dementia. It went public in June and is now listed on the NASDAQ Capital Market under the ticker symbol ALZN. SARASOTA-MANATEE

CEO leaves business organization Lakewood Ranch Business Alliance President and CEO Dom DiMaio has accepted a new job as president of Rite Technology, a Sarasota-based copying and printing tech firm.

DiMaio will transition out of his role with the alliance in August, and Vice President Dan Sidler will take over his duties until the position is filled, according to a statement. The alliance’s board of directors has begun a search for a permanent replacement.

“We are thankful for Dom’s time, talents and contributions over the past two years,” alliance board Chair Amanda Parrish says in the release.

BY THE NUMBERS 32%

Percentage Tampa area homes are selling for more than their long time pricing trend through June 30, highest in Florida PAGE 6

$100,000

Money College Hunks Hauling Junk has spent to sign college athletes PAGE 7

22,000

Orders processed a day at Kroger’s new central Florida fulfillment facility PAGE 8

$29.5 million Price New York City-based RD Management paid for the University Mall in Tampa PAGE 12

$1.55 million Price investor Frank Giuffre recently sold a Sarasota warehouse for after owning it for six months PAGE 14

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AUGUST 6, 2021 – AUGUST 12, 2021 | BUSINESS OBSERVER

CoffeeTalk FROM PAGE 3

Habitual complainers One has to wonder if this piece of news will make it into the tourism literature: Florida ranks among the worst states when it comes to customer service.

That’s right. People in the Sunshine State — paradise — aren’t thrilled about how they are being treated. And they aren’t keeping quiet about it.

That’s the finding from a customer service study of cities and states conducted by TollFreeForwarding.com, a Los Angeles-based telecommunications company. The study’s authors looked a Google trends and Federal Communications Commission complaints to find which cities and states had the unhappiest customers.

What they found is Florida had the third highest complaint rate, trailing only West Virginia and Maryland. And of the 10 cities with the worst customer service, four are right here in the land of sandy beaches, theme parks and boat parades. Orlando ranked No. 6, Jacksonville No.8, Miami No. 9 and Tampa No. 10. Pittsburgh was No. 1 So how did the study’s authors come to their conclusions?

According to a blog post on TollFreeForwarding.com’s website, researchers looked at Google searches for “complaints number” as well as actual complaints between April 2020 and April 2021 for cities nationwide. Each city was given a score between 1 and 50 for complaints and a score between 1 and 50 based on searches. The higher the combined scores, the more complaints

BusinessObserverFL.com

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STATE OF MIND States with the most customer service complaints: 1. West Virginia 2. Maryland 3. Florida 4. New Jersey 5. Georgia

6. California 7. Virginia 8. Pennsylvania 9. Colorado 10. Arizona

in that particular location.

The study did find that East Coast locales, where residents “tend to be more direct and outspoken,” topped the list of cities.

But are the results of this study necessarily bad news for Florida? One psychologist with whom the study’s authors shared the results found those who complain most are often the most discerning.

Brian Wind, a clinical psychologist and chief clinical officer at JourneyPure, says: “People with high self-confidence have been linked to a greater incidence of complaining because they think that if they complain and speak up, they’re more likely to get what they want. Complaining may also be a way to show that they have high standards so that other people won’t try to shortchange them.”

“On the other hand,” Wind says, “some people might be chronic complainers out of habit.”

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Welcome to the neighborhood Realtor Curt Ware told the Siesta Key Observer. “It’s only ever been for sale as a development where you have to buy everything. Now you can buy one of the homes, or you can build your dream home on Siesta.”

The neighborhood is a half-mile walk from the north end of Siesta Village, which Ware says affords potential homeowners an unusual opportunity.

“You can’t find a gated community that is walking distance to the Village because it didn’t exist until now,” Ware says. “To be able to walk or hop on a bike and be in the Village area for a wonderful dinner in less than five minutes is a terrific opportunity.”

The five already-built homes are all three-story structures. All of the lots would allow for similar structures in the future.

The first home, which is 3,522 square feet and has four bedrooms and five bathrooms, is on the market for $1.95 million. It features several balconies, a multicar garage, a pool and a spa.

Two of the lots are for sale with prices starting at $600,000.

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In a destination like Siesta Key, it’s not uncommon for homes to fly off the market. What’s rare is the sale of an entire neighborhood.

But that’s exactly what happened when a few local investors purchased the last undeveloped gated community on Siesta Key. Coronas Park LLC, through the Ware Group, purchased the Coronas Park neighborhood, on Bochi Circle just off Ocean Boulevard and Givens Street, for $6.35 million.

The neighborhood is composed of five homes and another eight buildable lots. Four of the lots feature Gulf of Mexico views and the remaining face Lake Norma. The first home on the property was built in 2009, and the last home was built in 2015.

In the past few years, the homes have been used for vacation rentals, according to a story in the Siesta Key Observer, sister paper of the Business Observer.

But Coronas Park LLC now intends to sell each parcel individually to full-time or part-time residents — which has never been an option in the neighborhood.

“That’s why this is so special,”

6

BUSINESS OBSERVER | AUGUST 6, 2021 – AUGUST 12, 2021

BusinessObserverFL.com

DataSnapshot

Screaming trees

F

lorida Atlantic University and Florida International University researchers are crashing the Sunshine State real estate party — with some alarming, if not totally surprising, news: The market is overheated.

Homes in Florida were selling for 21.76% more than their long time pricing trend through June 30, a report from the colleges found.

That’s up from 19.24% in May and 17.17% in April. “Florida homes keep fetching more money than they’re worth, a disturbing development that eventually could put buyers in a bind,” the report states.

Tampa Bay is the most concerning of the state’s major metropolitan areas, the data shows. Homes in that region sold in June for a 32% premium, up from 28.53% in May and 26.14% in April.

There is some good news: Citing a shortage of homes for sale, a steady influx of outof-state buyers and mortgage rates near historic lows, the researchers aren’t predicting a housing crash like the one a decade ago. Back then, Florida homes were overvalued by 60% or more. Others in

Hot real estate market runs into a problem: Is it too hot?

AVERAGE PREMIUM FOR STATE OF FLORIDA HOUSING

real estate have made similar predictions of a soft landing, not a bursting bubble.

But property appreciation eventually will taper off, the report suggests, and recent buyers who paid top prices risk being stuck for a significant amount of time before they can realize solid returns on their investments, says Ken Johnson, a real estate economist and associate dean in FAU’s College of Business.

“The across-the-board increase in the premiums

MARKET MADNESS % over trend April 26.14% 18.22% 18.45% 13.18% 10.48%

Market Tampa Bay Jacksonville Orlando Miami Tallahassee

% over trend May 28.53% 20.48% 19.79% 14.88% 12.95%

% over trend June 32% 23.07% 21.19% 16.89% 14.38%

Source: Florida Atlantic University and Florida International University

paid for housing throughout the state is very worrisome,” Johnson says in an FAU blog post. “Trees do not grow to

the sky and neither do home prices. We’re nowhere near where we were at the peak of the last housing cycle, but we

do need to be careful. Walking away from an obviously overvalued home may be the best thing buyers can do in this kind of market.”

The research team, in conducting its monthly analysis, reviews more than 25 years of home prices from online real estate portal Zillow. The data includes single-family homes, town homes, condominiums and co-ops.

Given the level of overpricing, Johnson and Eli Beracha, with FIU’s Hollo School of Real Estate, says Florida consumers almost certainly would be better off renting a home and reinvesting the money they would have spent on ownership. Of course, rents, in single-family and multifamily, are also exploding. But slower than home prices, the report states.

“Our research on buy versus rent indicates that, on average right now, renting and reinvesting is a particularly good wealth creation strategy,” Beracha says in the report. “More people who rent and reinvest would help alleviate current pricing pressure, which is a good thing.”

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AUGUST 6, 2021 – AUGUST 12, 2021 | BUSINESS OBSERVER

infocus | news |

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7

BY MARK GORDON | MANAGING EDITOR

Brands seek to score big wins with college athletes NCAA rule change opens floodgates for businesses — but vague regulations pose challenges.

D

riving from Tampa to Miami on the last day of June, entrepreneur Omar Soliman had lines from 1996 comedy “Happy Gilmore” swirling in his head. Like the one where the star golfer, Happy, played by Adam Sandler, demands his big check at the end of a golf tournament he didn’t win.

Sol i ma n, w it h a $10,000 check in his wallet, was happy during that drive, too, because he was taking that payment to University of Miami Hurricanes quarterback D’Eriq King.

A Miami alum and co-founder of Tampa-based College Hunks Hauling Junk, Soliman was on his way South Florida to officially sign King to an endorsement deal under the NCA A’s new name, image and likeness (NIL) rule that went into effect July 1.

Soliman got to Miami at 11:15 p.m., and at 12:01 a.m. July 1 he handed King the $10,000 check — a signing bonus. The rest of the one-year, renewable contract calls for King to get another $10,000 in exchange for allowing College Hunks to use his name (and social media following) in branding and marketing. “It was a great full-circle and surreal moment for me,” Soliman says about shaking hands with King, a fifth-year senior at Miami who passed on the NFL Draft for one more year on campus.

Soliman’s big smile isn’t just from his fan-boy moment. He and his College Hunks colleagues believe signing college athletes to NIL deals will be a big boost for the company, with $145.7 million in revenue in 2020. “Obviously, college is in our name, so we have an affinity for college athletes,” he says.

“We believe this is a pivotal moment for us as a brand.”

Several other businesses in the region have utilized the NCA A’s NIL rule in its early days. The seismic change stems mostly from a U.S. Justice De-

Obviously, college is in our name, so we have an affinity for college athletes. We believe this is a pivotal moment for us as a brand.

Omar Soliman | College Hunks Hauling Junk

partment antitrust ruling that curtails the NCAA’s long-held belief that college athletes, as amateurs, shouldn’t make money of promoting themselves or their team. Outside t he reg ion, t he r u les have launched a cottage business of sorts, with some businesses getting creative in hot pursuits of college athletes. Examples include a barbecue joint in Arkansas signing a NIL deal with the offensive line for the University of Arkansas football team and a University of Iowa basketball player promoting an Iowa City fireworks shop before July 4.

College Hunks is building a solid portfolio of NIL deals.

In addition to King, the list includes Bubba Bolden, a teammate of King’s at Miami and a highly ranked safety; the entire University of Central Florida women’s basketball team; and USF quarterback Jarren Williams. Soliman estimates College Hunks has spent about $100,000 so far on NIL deals.

And he anticipates that number to grow significantly, saying, “We envision a student-athlete ambassador in every one of our locations.” The company has some 150 locations, from Texas to Canada.

Fort Myers-based glass and frameless shower door manufacturer My Shower Door also gave the new rules a try. My Shower Door, with 130 employees and $18.8 million in revenue in 2020, signed University of Michigan incoming freshman football player Peter Simmons III to an NIL deal July 1.

A 6-foot-3, 305-pound offensive lineman, Simmons, the son of former Bonita Springs Mayor Peter Simmons II, is know by his nickname PS 3.

Although the younger Simmons hasn’t played a snap yet in college, he has a big following in Southwest Florida, says My Shower Door co-Owner Bill Daubmann. “People want to know what the day in the life of a college athlete is like,” says Daubmann, who declines to disclose the financial terms of the contract with Simmons.

“He’s got a heck of a social media following.”

A graduate of Bishop Verot High School in Fort Myers, Simmons, like many other college athletes, also uses social media to find more opportunities. He sent out a tweet July 1, for example, that stated, in part, “any local or any companies at all that want to use my social media as a platform for promote, do commercials, etc. to brand themselves, my DMs are open for business. Message me if interested.”

K ing, t he College Hunks endorser, has taken it anoth-

Tampa-based College Hunks Hauling Junk, co-founded

by OMAR SOLIMAN, far right, has signed several college athletes to names, images and likeness deals, including University of Miami safety BUBBA BOLDEN, middle.

COURTESY PHOTOS

BILL DAUBMANN, back row, middle, the co-owner of MY Shower Door, celebrates the NIL signing of University of Michigan rising freshman PETER SIMMONS III with the Simmons family. er step further, co-founding Dreamfiled with Florida State quarterback McKenzie Milton.

Dreamfiled is an NIL company that sets up event appearances for college athletes.

Williams, the quarterback at USF and College Hunks signee, is pragmatic about the NIL rules and where he will go with it. He knew of and liked College Hunks, he says, because his

mom used the service. “This was a brand I could get behind 100% ,” Williams says. “I’ve had a lot of offers (from other brands), but I’m taking it slow.

I’m not quick to sign my name.”

With all this activity in the first month, Soliman calls the NIL signing frenzy a bit like the Wild West — with a gray area on how companies can utilize the athletes. Also, without a

national law in place, the rule is subject to state regulations, which vary. He also recognizes that although these deals are fun,and can provide an instant splash, if a signing doesn’t help the business — in branding, marketing or some other area — it’s bound to flop. “If there’s no ROI,” Soliman says, “it will die on the vine.”

8

BUSINESS OBSERVER | AUGUST 6, 2021 – AUGUST 12, 2021

BusinessObserverFL.com

infocus | news |

BY LOUIS LLOVIO | TAMPA BAY EDITOR

Grocer continues Florida expansion, eyes more markets Kroger’s high-tech, robotic-centric facility will allow it to deliver groceries to more people, faster.

T

he top executive of one of the largest grocers in the country, The Kroger CEO Rodney McMullen, says he’s not looking to steal business from Florida’s own supermarket king, Publix.

Kroger’s actions in the state, including recent debuts of grocery delivery in Tampa and Jacksonville, with Miami likely in the next few months, show something else.

“We don’t look at it as we’re going to go and take (Publix’s) Florida’s market share away,” McMullen says. “We look at, here’s what we offer uniquely, and we’re going to do an incredible job serving an individual customer. And then we’ll earn the business over time.”

Despite his friendly competition statements about Publix, McMullen, speaking at the official ribbon-cutting of the grocer’s 375,000-square-foot fulfillment center in Groveland on July 29, says Florida is a prime market for the grocer, and he sees a bright future in the state.

One big reason is name recognition. McMullen says company research found that more

HEAT IS ON First Tampa and Jacksonville.

Next, The Kroger Co. is taking steps to enter Miami.

Andrea Colby, Kroger’s ecommerce corporate affairs and communications manager for Florida, says “at this time we do not have a start date” for Miami. But several employees at Kroger’s new fulfillment center in Groveland say they’ve been told the center is getting ready to begin delivery service in Miami later this year.

Whenever service actually begins, it’s another indication Kroger sees Florida as the perfect place for expansion. than 50% of Floridians were familiar with the company, either because they’d shopped at a Kroger store themselves or visited family members who did.

The Cincinnati chain, founded in 1838, is one of the largest grocery companies in the countr y with more than 20 brands operating 2,800 stores

in 35 states, posting $132.5 billion in sales in 2020. That dwarfs Publix, with just under $45 billion in revenue in 2020.

The reason Kroger entered Florida with delivery rather than physical stores, McMullen says, is Kroger sees an opportunity, especially because the pandemic changed many shoppers’ habits and that its ecommerce initiatives in recent years have been successful.

He believes the company is poised to capture a large chunk of the grocery market looking for delivery because of its ability to deliver the same level of service and product to a person’s door as it does at its brickand-mortar stores.

McMullen says Kroger plans to expand in Florida slowly to not sacrifice either.

“We’ve got to give a great customer experience, and that will drive our ability to expand,” he says, adding that “I don’t even know when that is because we have to be driven by how good a job we do. … We will earn our right to continue to expand.”

He adds physical stores “are not on the agenda right now.”

COURTESY PHOTOS

Kroger started delivering groceries to customers in the Tampa and Jacksonville regions earlier this year.

Kroger has had a presence in Florida before. Lucky’s Market, an organic and natural food chain out of Colorado, which blitzed Florida with more than a dozen stores starting in 2016 through an investment from Kroger, filed for bankruptcy last year.

The Groveland facility, built in an office park just west of Orlando in the Lake County city, opened earlier this year and is the hub for what Kroger plans to do in the state. Company officials believe it will allow Kroger to duplicate its service and quality offerings in a van rather than a store.

The three-f loor, state-ofthe-art distribution center is basically a massive grocery store, complete with separate sections for perishables, nonperishables and frozen foods.

Rat her t ha n being packed with shoppers, the shed, as it’s known, is manned by both employees and robots that prepare grocery orders for customers.

On the shed’s second floor, pickers work to pack orders as they come in from what look like giant vending machines, separating, inspecting and

bagging specific items and then shipping them down the line to the next station.

One floor above the pickers is the hive. This is a massive grid were robots swarm on tracks to pick items below them. The bots stop above the designated spot and take the items into what can best be described as their bellies. There are what seem like hundreds of these bots, shooting back and forth, picking a 50-item order in five minutes or less.

Once all a shopper’s items are picked and combined, grocery bags are placed either into the back of tractor trailers or vans for local deliveries. The trucks are unloaded and reloaded unto vans for deliveries up to 90 minutes away.

Orders destined for Tampa and Jacksonville come from smaller facilities supplied by the shed.

In all, the shed operates 19.5 hours a day and can process 22,000 orders each day.

Orders a re t racked f rom placement on the app to the customers front door using bar codes.

AUGUST 6, 2021 – AUGUST 12, 2021 | BUSINESS OBSERVER

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BUSINESS OBSERVER | AUGUST 6, 2021 – AUGUST 12, 2021

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STRATEGIES

BY MARK GORDON | MANAGING EDITOR

MILESTONE MOMENTS Deanna Wallin has crossed several milestones with Naples Soap Co. in the past 12 years.

The list includes:

2009: STEFANIA PIFFERI

DEANNA WALLIN founded Naples Soap Co. in 2009, with a 300-square-foot space in Naples.

Lather Good

An unwavering focus on constant improvement has Deanna Wallin’s retail business on the cusp of a major new phase. ‘I’m sort of like water. I will find a way to flow around the rocks if I don’t find an answer,’ she says.

T

he hot public markets smell lovely to skin and hair care entrepreneur Deanna Wallin. So lovely that she’s positioning her business, Naples Soap Co., to capitalize on the investor demand for growth companies.

Naples Soap Co. recently executed on a reverse merger, and its shares, under the company GNS Group Inc., debuted on the over-thecounter markets June 30 — trading under the symbol GNSG. GNS Group is a shell company, a former furniture distributor. It’s now the parent entity of Naples Soap Co. and its 10 brick-and-mortar stores in tourism-driven markets across Florida and strong e-commerce business.

The move sets up Naples Soap Co. on a path to what one consultant says could potentially be a $500 million brand.

It’s also a look into the challenges and thought process a privately held business goes into when seeking to raise capital to fuel growth.

Wallin, 51, remains CEO and

the largest shareholder of the $10 million company, which sells soaps and skin care products for the body, face and hair, including products for people w ith sensitive skin. Naples Soap Co. products are also sold in more than 300 boutiques, spas and stores nationwide through the company’s wholesale division.

Using a reverse merger, specia lt y acquisit ion pur pose company, or in some cases, a traditional IPO, can be both financially rewarding but a costly and long process. That makes it even more unusual for a small, yet growing, niche retail operation.

But Wallin, a Business Observer Top Entrepreneur in 2020, has long been something of a business maverick. That’s partly why forgoing banks and private equity firms to go public fits her well. “To be able to come out of the pandemic with such a bold move like this is a tremendous and pivotal moment for us,” Wallin says. “It’s absolutely exhilarating.”

Not to say it was easy. And

Wallin stresses there’s more work to do to hit the next goal: meeting the qualifications to be listed on the Nasdaq exchange. A big one is to raise at least $4 million in new capital.

Other requirements include board composition, having at least 300 shareholders and having shareholders’ equity of at least $2 million.

“We just did it our own way,” says Wallin, a nurse in a past career who founded Naples Soap Co. in 2009 after she, and then her young daughter, struggled to find good products to treat their eczema. “I’m sort of like water. I will find a way to flow around the rocks if I don’t find an answer. I always look to find another way to get there.”

That determination shines through in Wallin, say several consultants and business leaders who know and have worked with her. Naples-based turnaround expert Paul Fioravanti, with Qorval, says Wallin’s passion for the company — and its products — is an important element in its success. “The core of the brand is taking care of peo-

Opened first store in a 300-squarefoot space in the Tin City neighborhood of Naples in November; expanded to space next door a few months later

2011:

Opened store in downtown Fort Myers; won the Entrepreneurship Award at the Collier County Economic Development Council’s Excellence in Industry Awards

2013:

Won the Excellence in Industry Award from The Greater Naples Chamber of Commerce as a Company to Watch

2015:

Named 2015 Outstanding Retail Leader in Florida by Florida Retail Federation; established new 11,000-square-foot warehouse and corporate office in Estero

2017: 2019:

National launch of The Eczema Kit

Began distribution of bath bombs at more than 250 Dillard’s stores nationwide

2021:

Company goes public with reverse merger; plans move into 20,000-square-foot facility

AUGUST 6, 2021 – AUGUST 12, 2021 | BUSINESS OBSERVER

ple, taking care of customers,” Fioravanti says. Naples Soap Co. offers a variety of natural and organic soap products in a variety of scents and sizes, some 250 products in total.

“And that’s really resonating with people, especially in the pandemic.”

Dest in-based consu lta nt John Hall, who helps the firm with e-commerce and hiring and retention, adds that another key to the success is Wallin’s “it takes a village” ethos.

Wallin, he says, can often be heard saying, to any and all of the company’s 75 employees, “If people believe in themselves, it’s amazing what they can accomplish.”

“Deanna is an outstanding leader,” Hall says. “She goes out of her way to boost the selfesteem of her team.”

11

BusinessObserverFL.com

controlling, to have a private equity group breathing down my neck,” Wallin says. “A lot of times that doesn’t go so well when you bring in outsiders, and they start telling you how to run the business.”

So Wa llin, through some consultants and advisers, investigated the reverse merger process. There were several advantages, including not taking on as much debt as she might have if she got bank financing.

Also, going public could allow Naples Soap Co. to provide stock options to employees — a nice benefit in the wars to recruit and retain strong talent.

OLD COMPUTER? YOU CAN USE IT TO HELP OTHERS.

COURTESY PHOTOS

DEEP UNDERSTANDING What’s next? Wallin is focused pany’s 10 stores are in SouthWallin initially considered on both reaching Nasdaq tarwest Florida, and there are also going the bank route for capital. gets, including changing the locations in St. Petersburg, the Naples Soap Co. has had a re- name from GNS Group to NaPanhandle and central Flori- lationship with Synovus Bank, ples Soap Co. and getting the BIG CHOICES da. Two more stores are in the which Wallin says is strong. But new facility running as effiWallin started to think about plans for later in 2021. as Wallin shopped around to ciently as possible. And even on raising capital long before the The company is also readying different lenders, in Florida but a sweltering late July Monday pandemic, as much as four or to move into a 20,000-square- also as far as California, she dis- morning, Wallin and her team five years ago. Those long-term foot industrial-flex facility, on covered banks weren’t too keen are preparing for the holidays Children’s Guardian (CGF) and on Sarasota (STUG) “Being in retail, thoughts only gained aThe sense of Jetport Loop in Fund Naples, which lendingTechnology to specializedUsers retail Group and Christmas. urgency as sales, especially in willup beto nearly twice as computer big as businesses. have teamed collect used laptops. Either With terms a longwere historythat’s of typical,” she says. e-commerce, surged. Through its cu r rent 11,000-squa re- too high, or the answer was a What’s not typical, says Fiorasanitizes hard with a seven-step process the first six monthsrecycling of 2021, and footsafety, space.the TheSTUG facility, Wal- the flat no.

“Itdrive was very hard to get vanti, the consultant, is Wallin’s that protects then refurbish thesays. laptopuncanny and install for example, online orders in- lin the says,donor's will alsoinformation. “allow us to They banks to look at us,” she ability to multitask creased 3% over 2020 and 253% get more efficient with our eNext, Wallin considered tarand see the software that is typically required for school. Refurbished laptops are distributed bigger picture in over 2019. commerce.” Naples Soap Co. geting private equity money. retail while also keeping little to area in foster or state care through the CGF the that Guardian adinLi-mind. That goes from Store sales, meanwhile, arestudents did about $10 million in sales With a good senseand of what things up 40% through Junetem overProgram. the in 2020, and Wallin expects to requires, in addition to strong making such decisions as pursame time period in 2019 and hit $11 million in 2021. It plans sense of self, Wallin balked at suing the reverse merger to de100% over the first six months to move into the space by the that option. “I’m way too inde- signing store layout. “I’ve never of 2020. At least half the com- fourth quarter. pendent and, I hate to say it, but really seen anyone like her,” Naples Soap Co. has some 250 products.

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Deanna is an outstanding leader. She goes out of her way to boost the self-esteem of her team.

John Hall | Consultant says Fioravanti, who has worked with some 60 companies in 35 industries. “She’s adept at product development and understanding the marketplace.”

Fioravanti says Naples Soap Co. can become a $500 million brand — and Wallin can lead the company there. “I believe she can be a very effective CEO at that level,” Fioravanti says.

With all the activity buzzing around her, Wallin also plans to make time for one of her main Naples Soap Co. passions: product development and product improvement. In a 2020 interview, she called that the fun part of the job and said she tries every Naples Soap Co. product — the last stop in quality control. “There’s a lot of momentum,” Wallin says. “There’s still a ton of opportunities out there for us.”

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12

BUSINESS OBSERVER | AUGUST 6, 2021 – AUGUST 12, 2021

BusinessObserverFL.com

Sila Realty Trust completes $1.32B sale

An exterior rendering of the planned 215,000-square-foot, mixed-use office building, named Base Camp, at Rithm At Uptown. The building replaces what was the J.C. Penney in the University Mall.

K.L. MCQUAID Sila Realty Trust Inc. late last month completed the sale of its 29-property data center portfolio to a Singapore-based firm, a move that allowed the Tampa-based real estate investment trust to pay down debt and reward its shareholders.

Tampa-based Sila Realty, the former Carter Validus Mission Critical REIT II, used the $1.32 billion deal’s net proceeds to retire $854 million in debt, and the company’s board approved a special distribution of $1.75 per common share with the balance.

Perhaps most importantly, the data center sale to Mapletree Industrial Trust will give Sila Realty the ability to pitch itself to Wall Street and institutional investors as a “pure play” health care property owner.

That, in turn, should boost the company’s chances of entering into a “liquidity event” — likely a sale or a merger — between November 2022 and that same month in 2024, which is a stated goal.

Michael A. Seton, Sila Realty’s president and CEO, says the company remains confident it will “be able to meet that timeline.”

With the sale, Sila Realty now owns 124 health care properties containing 5.2 million square feet, which the company acquired for $2.2 billion.

Today, those properties are 96.2% leased and generate annual base rents of $149 million, according to an investor presentation See COLUMN page 13

COURTESY PHOTO

Sila Realty Trust has sold its 29 data centers, including this one in Norwalk, Connecticut, for $1.32 billion, part of an effort to become a “pure play” health care property owner.

RETAIL THERAPY

As the massive transformation project at University Mall continues, its leaders are also thinking philosophically: What does the mall of the future look like?

S

itting on Fowler Avenue, just a mile or so from the University of South Florida, is University Mall.

Like a lot of malls, it’s a massive, spread-out edifice surrounded by acres of parking spots.

And like a lot of malls, it has seen better days.

University Mall is undergoing a transformation, part fundamental and welcomed, and part quiet and underneath the surface. With ambitious plans and an investment that has already surpassed $100 million, the transformation is also in the spotlight in the region and across the state, as the indoor mall sector figures out what it will be in the next five, even 10 years.

Yet on a recent afternoon, University Mall was as full as any successful mall. Young people hung around the food court as parents watched their kids run around in a play area outside of a Dillard’s Outlet Store.

Shops were not packed with customers, and a few clerks stared down at their phones as aisles, but there were shoppers going from store to store. And there were plenty of people carrying shopping bags, always a positive, though informal, indicator of a mall’s fiscal health.

Considering it was barely 5 p.m. on a hot Thursday afternoon in the middle of July, there was plenty of reasons for someone to be optimistic.

As the mall undergoes a massive renovation that will make it more of tech and lifestyle center than a traditional shopping center, retailers unsure of their place once the work is done nevertheless feel a buzz, a sense that better days are coming.

Mall employees, shop managers and customers all paint the picture of stores hanging strong despite challenges that retail and the mall itself face. They believe the renovation is the kind of rising tide that makes all boats rise.

But the optimism may be misplaced.

FILE

CHRIS BOWEN has been behind the transformation of the University Mall to Rithm At Uptown since 2018.

CHOICES AHEAD There should be no mistake: Not everything is great. One wing is nearly three-quarters empty, there are no traditional anchor tenants, and although there are plenty of familiar stores, a large percentage of the mall’s retail tenants aren’t names most people would recognize.

For ever y Hot Topic, Lids and Zumiez, there’s a Mr. Man, Dyme Clothing and Kids for Less.

Among the mix is a charter school, a karate studio, a nonprofit bike shop and several jewelers. USF’s Institute of Applied Engineering sits next to Tampa Nails & Eyelashes and two doors down from On Site Barbershop. There’s also a House of Hoops, a basketball-themed concept store created by Foot Locker.

Some of the storefronts are without names while a handful look as if they’d fit right in at an upscale shopping center.

To call the selection broad would do the word a disservice.

There’s also the fact that Chris Bowen, the chief development strat-

egist for the mall’s owners, New York City-based property giant RD Management LLC, says there is a future for retail in the redevelopment — but it’s not for everyone.

“Is everybody that’s there today going to be there tomorrow? No,” he says. “Three and a half years ago we ceased to be a mall. We’re not a mall anymore. We became a community incubator.”

What does he say, then, to all the shoppers who believe they are out on a Thursday afternoon shopping at, well, a mall?

“You saw a lot people there, right?

People from the outside are amazed t hat ma ll is still open. They’re amazed to go inside and see there are actual businesses,” Bowen says.

“Well, guess what? That’s been happening for a couple of years now.”

RD Management’s ultimate goal with the massive revitalization of University Mall is to create a hub of innovation-focused tenants, mostly See UNIVERSITY page 13

AUGUST 6, 2021 – AUGUST 12, 2021 | BUSINESS OBSERVER

BusinessObserverFL.com

13

transactions

BY STEVEN BENNA | CONTRIBUTOR

UNIVERSITY from page 12

DEEDS/MORTGAGES The following real estate transactions more than $1 million were filed in Charlotte, Collier, Hillsborough, Lee, Manatee, Pasco, Pinellas, Polk and Sarasota county courthouses. The information lists the seller, buyer, amount of sale, previous price and date, mortgage and lender, if available, address and book and page of the document.

in research, technology and medicine as well as a retail component.

As part of the renovation, the center is being renamed Rithm At Uptown. The moniker, company officials say, is derived from the word algorithm and is an acronym for research, innovation, technology, humanity and medicine.

HISTORY IN THE MAKING According to the Mall Hall of Fame, a website that documents the history of classic malls and shopping centers, University opened Aug. 15, 1974.

The mall was built by developer Edward DeBartolo, one of three he opened in Florida that year.

Then known as University Square Mall, it opened with four anchors: Maas Brothers, Robinson’s, Sears and J.C. Penney. It had 32 stores and a movie theater.

In 1983, an expansion saw the addition of a 100,800-square-foot Burdines.

By then the mall had grown to slightly more than 1 million square feet and more than 130 tenants, according to Mall Hall of Fame.

By the late 1980s and early 1990s, department store chains were being bought, and familiar names were being replaced.

This was also an era when anchor stores began to move around or close.

Between September 1991 and August 1992, Burdines closed and then reopened in the space Maas Brothers had occupied, and Montgomery Ward moved into the former Burdines space.

Montgomery Ward lasted less than a decade and was replaced by Burlington Coat Factory, which remains.

In 1992, the mall was bought by Heitman Retail Properties out of Chicago which began a $48 million renovation two years later.

T he nex t few yea rs broug ht on changes galore, with the mall changing hands several more times, more remodels and even more openings and closings. During that time, University Mall, like hundreds of once-essential malls across the country, began to see its former glory fade.

RD Management bought the property in 2014 for $29.5 million. Including the acquisition, rezoning, master planning and demolition, RD has invested about $50 million into the property. An additional $65 million is going toward a student-housing complex on the site currently under construction.

At completion, Rithm At Uptown will be one of the largest, mixed-use innovation communities statewide, with capacity for more than 7 million square feet of development, including

CHARLOTTE NONE COLLIER Buyer: Mason Classical Academy Inc. Seller: Hodges University Inc. Address: 2647 Professional Circle, Naples Property Type: School Price: $10,500,000 Previous Price: $13,000,000, November 2013

MARK WEMPLE

The University Mall in Tampa is balancing some traditional tenants with new entities in its transformative renovation project. several thousand residential units, RD officials say.

LOOK AHEAD Bowen says the mall’s owners still see retail “as a way to engage the community.” But it’s retail with a twist.

He says the goal is to “not just engage them to buy but engage them to think.”

The approach is meant to give a shopper looking for a shirt the opportunity to ask, “Why (do) you want that shirt?”

To make this change, Bowen and his team are asking current tenants to “excel at all the other parts of their business,” meaning learning how to do business differently, better source their products and better communicate with shoppers.

As for the retailers themselves, they do not have a clear picture of what will happen to the current tenants in the long term and whether the good feelings now will dissipate.

They do remain optimistic, though, with many saying they are looking for something good to happen.

“We’ll know when they tell us,” says Andy Fischer, of WellBuilt Bikes. “We are the last phase, and it shouldn’t affect us, they say, for at least four years.

But they’re building up the businesses that are still here to keep them rolling.”

I don’t know how well other stores are doing, but we’re pretty consistent. We have a growing crowd. We’re still on the map.

They’re just building up more business.

Tony Palmer | My Tobbie Toys & Hobbies

COLUMN from page 12 video on Sila Realty’s website.

Along the Gulf Coast, Sila Realty currently owns health care properties in Tampa, Lakewood Ranch, Fort Myers, Bonita Springs and Lehigh Acres, according to its website.

Seton says with the data center sale, Sila Realty can better focus on its core mission.

“The majority of our portfolio is in health care, and given the demographic trajectory in the U.S., with the 65-and-over cohort gaining dramatically, we believe there’s a greater opportunity there going forward,” he says. “And we happened to make a significant gain on the sale, a stellar return. This further puts us on a greater path for the future. It should be very clear what we’re doing going forward.”

Buyer: OREOF19 BR W LLC Seller: Walgreen Co. Address: 4290 Tamiami Trail E., Naples Property Type: Retail store Price: $4,875,140 Previous Price: $3,863,000, November 2001 HILLSBOROUGH Buyer: Farley White Harbour Place LLC Seller: AMP CPL THP Property LLC Address: 302 Knights Run Ave., Tampa Property Type: Office building Price: $56,350,000 Previous Price: $32,000,000, February 2013 Buyer: SPUS9 Plant City LP Seller: Foundry Lakeside Station I LLC Address: 2727 Henderson Way, Plant City Property Type: Warehouse Price: $43,800,000 Buyer: SH 7213-7216 LLC Seller: GFN Tampa LLC Address: 12151 W. Hillsborough Ave., Tampa Property Type: Warehouse Price: $14,238,750 Previous Price: $10,000,000, December 2018 LEE Buyer: Savona (Cape Coral) Owner LLC Seller: The Cape at Savona LLC Address: 1730-1818 Savona Point Circle, Cape Coral Property Type: Apartment units Price: $47,878,200 Buyer: UDP Gemini One LLC Seller: Hodges University Inc. Address: 4501 Colonial Blvd., Fort Myers Property Type: School Price: $27,536,500 Buyer: AG Essential Housing Multi State 1 LLC Seller: WCI Communities LLC Address: Fort Myers Property Type: Vacant land Price: $9,014,707 MANATEE Buyer: JAX Esperanza LLC Seller: LCP Bradenton LLC Address: 702 51st St. E. Bradenton Property Type: Apartment units Price: $53,300,000 Previous Price: $38,700,000, August 2017

Buyer: Porter Investment Holdings LLC Seller: Whitney Plaza LLC Address: Longboat Key Property Type: Vacant land Price: $3,235,000 Previous Price: $3,638,200, November 2012 Buyer: Spoerl Holdings LLC Seller: Mike Lovell Inc. Address: 5822 24th St. E., Bradenton Property Type: Industrial building Price: $2,600,000 PASCO Buyer: Home Rent 1 LLC Seller: Starlight Homes Florida LLC Address: Dade City Property Type: Vacant land Price: $1,792,000 Previous Price: $1,199,400, January 2021 PINELLAS Buyer: Forty Ninth FL Partners LLC Seller: Alta Pinellas Park Apartments LP Address: 9505 49th St. N., Pinellas Park Property Type: Apartment units Price: $78,000,000 Previous Price: $7,9332,000, March 2019 Buyer: Grace Family Church of North Tampa Inc. Seller: Phoenix Jr. Inc. Address: 1199 East Bay Drive, Largo Property Type: School Price: $9,500,000 Buyer: The Central Grand LLC Seller: 2105 Central Ave LLC Address: 2105 Central Ave., St. Petersburg Property Type: Store Price: $3,950,000 Previous Price: $2,500,000, October 2019 POLK NONE SARASOTA Buyer: BHEG Lakepark LLC Seller: Lakepark Estates LLC Address: Fruitville Road, Sarasota Property Type: Vacant land Price: $26,100,000 Previous Price: $12,500,000, December 2014 Buyer: Scope 2 Pam FL LLC Seller: Welltower Inc. Address: 6150 Edgelake Drive, Sarasota Property Type: Hospital Price: $21,329,200 Previous Price: $22,500,000, August 2011 Buyer: Bella Caridad Properties LLC Seller: Scata Real Estate LLC Address: 3550 S. Tamiami Trail, Sarasota Property Type: Office building Price: $4,100,000

14

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commercial real estate

BY AMANDA POSTMA | SARASOTA-MANATEE WRITER

FRANK GIUFFRE has bought and sold multiple commercial buildings in the Sarasota area.

Flippin’ Fast A commercial building that makes others turn away looks like gold to investor Frank Giuffre.

W

hen it comes to flipping a propert y to make a profit, Frank Giuffre knows what he’s doing.

Giuffre has been in the commercial real estate business for a while. But he’s never purchased, revamped and sold a property in six months and made $500,000 in the process.

That was until this past spring.

“It was a quick turnaround,” he says of the multiunit warehouse at 5670 Jason Lee Place, Sarasota. Giuffre is the owner of F&H Properties Sarasota LLC, along with his wife, Heat her. That quick tur naround is based, for the most part, on two factors: the redhot market, of course, but also Giuffre’s strategy of finding gems in the unseen and being nimble to respond to unusual opportunities.

When the company was first incorporated in October 2010, the focus was on flipping commercial buildings for a profit.

More specifically, the Giuffres targeted single-unit properties and condos.

One of the purchases Frank Giuffre made during those days was two 1,017-square-

foot office condo units in the Franklin Field Business Center in Sarasota. Giuffre’s company purchased the units for $189,000 in April 2013. The units were sold to Troyode LLC for $269,400 in April 2015, an appreciation of 42.5%, Now, with sights set on bigger deals and bigger returns, the company’s aim is for multitenant buildings featuring six or more units.

F&H properties is the middleman, Giuffre says. It’s the liaison between the seller and long-term investors. “We get them to where they need to be,” he says. The Giuffres oversee the purchase, sale and tenant selection. The company generally has two to three properties a year they oversee.

F&H properties partners with other entities, such as Sarasotabased Harry E. Robbins Associates Inc. In particular, Giuffre has been working with Troy Robbins, a broker-associate at the commercial real estate firm, for several years. Together, they take a property and get the rent to market value.

“We try to retain the same tenants and fix their space,”

LORI SAX

Giuffre says. “We just want the rent at market price.”

Typically, there aren’t a lot of structural changes involved when a Giuf f re-purchased

property is being revamped.

Instead, the focus is primarily on painting, landscaping, parking and signage. The goal is to make it more presentable

and appealing. It’s a winning strategy. “It’s more cosmetic,” Giuffre says. “A little paint and some landscaping (go) a long way.” On a quick remodel, Giuffre says he usually spends up to $50,000 on improvements.

Ty pically, projects take a year to complete. The one at Jason Lee Place, in particular, was by far the fastest Giuffre has ever purchased, renovated and sold a property. For one, Giuffre says the location, just off a heavily trafficked part of Clark Road, was fantastic. They cleaned it up a bit, raised the rent and added new tenants.

“We were able to almost triple the income the old owner was making,” he says.

Giuffre also stays focused on the capitalization rate — the return on an investment. Typically, a long-term investor will look for an 8% cap rate. And that’s exactly what they did with this property. He bought it for $1.05 million Nov. 6, 2020, property records show, and by the time Giuffre and Robbins were done with the place, it was resold for $1.55 million.

The buyer, on a deal that closed April 30, was PEA Realty Inc. Giuffre can oversee the purchase and sale of almost any property. But his sweet spot is properties that aren’t appealing to others. “What makes a building desirable to me,” he says, “is a building that’s undesirable to everyone else.”

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bottom-line behavior

BY DENISE FEDERER | CONTRIBUTING COLUMNIST

Trust the Process How to build trust as the successor in a family business.

I

have written much about the advice I give family business owners as they seek to transition their business to the next generation.

Often, the focus is on the process surrounding the business founder’s decision on picking their next successor and the response of their family to these choices.

But transitions aren’t successful the moment the leader concludes, closes their laptop and hits the beach. What comes after ultimately decides the fate of the business.

The new leader — be it a family member or an outsider — might have been given the blessing of their predecessor, but to truly lead, they must first earn the trust of the team. Legacy employees — many of whom might have known the new family leader since they were a child — are often reluctant to have blind faith and trust in them.

The same goes for newer staff members who might have little to no connection

to the new leader. Trust is earned, not given.

But how does a new leader earn the trust of their employees? A study at Northwestern’s Kellogg School of Management called The Trust Project identified three characteristics needed to gain trust: competence, honesty and benevolence.

In short, your team wants to know you have the skills, integrity and empathy to do the job, make decisions that are best for the company and support your team.

In my experience as a family business consultant, making assumptions a “known” individual will be implicitly trusted is erroneous. Being a known quantity, in fact, can work against a new leader.

When the team has been around this person for several years, they have seen their setbacks, failures and warts.

Although it might be hard to trust an outsider, an insider can’t be complacent. They must be intentional in demonstrating their abilities and leadership presence, proving to the team that despite their failings, they are the right person for the job.

Laying the groundwork for

15

trust, however, starts long before the transition. So let’s rewind a bit.

Before a new leader can earn trust on their own, the right environment must be set by the current leader before their departure. Naming a successor is only the first step.

Paving the way for them to succeed is the most important job of the outgoing leader.

The process should start early — months at least, but years in a perfect world (especially in the case of a family member being groomed for leadership). Of course, gaining trust will mostly be the responsibility of that new leader, but paving the path for them to succeed is essential, and boils down to four major concepts: COMMUNICATION Once a leader has chosen a successor, openly communicating these intentions to the team is key. Don’t underestimate the anxiety created in a company when there are numerous closed-door meetings or when the owner is around less frequently, but no one in a leadership role is being transparent as to what decisions about the future are

Denise P. Federer, Ph.D. is founder and principal of Federer Performance Management Group. She has 27 years of experience working with key executives, business leaders and Fortune 500 companies as a behavioral psychologist, consultant, coach and trainer.

Contact her at DFederer@ FPMG.info.

being made.

If employees think you are hiding something (and they can sense it, trust me), they will become suspicious of the new leader. After all, if you trust this person to take over the business, what’s to hide?

You must find the “right” time to tell the team. Too early, and some might jump ship.

Too late, and it will seem like you’re pulling the bait and switch.

The situation for each business is different, but make sure you make the announcement with enough time for the team to get accustomed to the change before it happens.

EMPOWERMENT Prior to the transition, it is imperative that the incoming leader be given leadership responsibilities. This will give them a chance to demonstrate their worth, and a buffer zone to allow for learning and development.

Additionally, it will allow

the team to get used to the new leader making decisions, rather than an abrupt change.

RESPECT The team ostensibly trusts you, the current leader, and will look to you for acceptance of the new leader. Treating the incoming leader with respect will go a long way to ensure the team will respect and trust them as well. Lead by example.

HONESTY The chances that the incoming leader is already perfectly set up to succeed are slim to none. As the predecessor, you must give them honest feedback so they can learn and grow and be prepared when the time comes.

Many of my clients have a difficult time with this because the new leader is often their child. But without this respectful but “tough love,” you are essentially setting up your child for failure, something no parent and no business leader wants to do.

Leaders aren’t made; they are grown. As the outgoing leader of a company, you must do everything in your power to foster that growth and clear a path for success.

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She will discuss “Identity Leadership” by Stedman Graham. It’s a deep dive into self-leadership, personal growth and more - and how defining your skills and strengths will help you become a meaningful leader. “To lead others, you must first lead yourself.”

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