The Starkey family has sold its 2,500-acre ranch to Connecticut-based private equity firm Wheelock Street Capital for $54 million.
Starkey Ranch and the private equity firm agreed to the eight-year contract last July, and Wheelock closed on the initial 1,080-acres in mid-December for around $12.5 million.
"It's a bittersweet deal," said Trey Starkey, CEO of Starkey Ranch. "It's a wonderful piece of land, but we've been able to share it with a number of people. We preserved over three-fourths of the original ranch. Now the rest can be developed in a responsible manner."
The timing of the deal meant the Starkeys had a "very nice Christmas."
"It's definitely sweeter than it was five years ago, back in the real estate bubble days," he said. "The last five years have been rough."
Wheelock was formed in 2008, but it has been an active investor in the residential land market having closed on properties containing over 16,000 residential lots in the last three years. Last November, the firm entered into a joint venture with Atlanta-based John Weiland Homes and bought the builder's real estate assets.
Starkey Ranch is approved for 5,050 homes, 450,000 square feet of retail, office, and medical uses, 300,000 square feet of light industrial uses and 220 hotel rooms. Trey Starkey said Wheelock has "the horsepower to do this."
"I know they'll be able to pull it off," he said. "They're great people and they've got the horsepower to do this."
He has reason to be confident in the company – his son, Hunter Jones, works there – though Jones was not involved in the Starkey acquisition. "He was in graduate school in real estate at MIT," Starkey said. "He accepted a job with them the same day we inked the deal in July. We all doubled down that day."
The project will be managed by Reed Berlinsky of Florida-based Gentry Land Company.
"Wheelock is an opportunistic company that looks at key markets in real estate," Berlinsky said. "Tampa is one of the key markets we looked at, and we considered future corridors with potential for growth. Starkey Ranch was a piece of property that met all those criteria. As we learned more about it, we felt like it had more viability every day."
The hotel entitlements made the project especially appealing to Wheelock, since the company has a division that specializes in hotel development. Florida's housing market, and Tampa in particular, is poised for a rebound after five years of recession, he said.
"We think we're savvy enough to understand when a market is beginning to show signs of resurgence," Berlinsky said.
Berlinsky said Wheelock would spend at least six months planning, visioning and modeling the community. "This is our time to really decide what the community is going to look like and what we're going to call it," he said. "It'll probably be a year before we make any announcements regarding builders."
He said Wheelock's venture with John Weiland Homes doesn't automatically mean the builder would operate in Starkey Ranch. "The Wieland purchase included a fairly healthy asset balance in the six markets they're active in," he said. "We're not really looking to expand into other markets, although we never rule anything out. There are a lot of very good builders in this area now that we trust."
The first phase of construction will likely take place toward the center of the property, around a future elementary/middle school and park site. "There's going to be a real synergy with parks, bike trails and walk-ability," Berlinsky said.
Development of the hotel, retail and office space will come in later phases.