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Partners make $5 million bet on Seminole Heights as ‘the coolest part’ of Tampa

TAMPA — In the past few years, Seminole Heights has morphed into one of Tampa Bay’s trendiest neighborhoods. You can still buy a used Toyota on Florida Avenue but you can also dine at several top-rated restaurants that have made the area a foodie’s mecca.

Fast-rising prices have pushed homeownership beyond reach of many who’d like to live in the Heights. But there’s an option: renting. And that’s where Aaron Masaitis and Bill Sparano come in.

This month, the pair paid $4.925 million for a package of 10 old but well-maintained buildings in Seminole Heights. They contain a total of 46 apartments, roughly 85 percent of all multi-family units now in the area. Such is the demand for rentals that all 46 are occupied, most of them by college-educated young professionals drawn by the Height’s funky charm.

"It’s the coolest part of town," says Sparano, 42, a general contractor and developer. "It has the hippest, trendiest people."

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He and Masaitis, 38, once focused on Tampa’s Hyde Park neighborhood but decided Seminole Heights was where they needed to be. They like its "walkability" — seven of their properties are a short stroll from Ichicoro, the wildly popular ramen restaurant. Two others, on a scenic bend of the Hillsborough River, are a few blocks from Rooster & the Till, whose chef was a finalist in the 2017 James Beard awards.

Masaitis and Sparano aren’t the only ones in the apartment business who have noticed the transformation of Seminole Heights, just a few miles north of downtown Tampa. For the first time in decades, new multi-family housing is under construction in an area still largely comprised of single-family bungalows.

On Florida Avenue across from Ichicoro, the Avenue Lofts will have 52 units. Further north, at the corner of Florida and Idlewild Avenue, Indiana-based Milhaus is building the five-story, 81-unit Hite. Due to be completed by year’s end, The Hite will offer studio and one- and two-bedroom apartments over ground-floor shops including a Tribeca Salon.

What attracted Milhaus to Seminole Heights? "The potential," says Michael Key, the company’s regional director of construction. "It’s very eclectic, with the restaurants, the bars, the brewers. It’s just a cool, growing area."

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Casey Babb of the real estate firm Marcus & Millichap sees Seminole Height benefitting from ‘‘the boomerang factor’’ — people who once lived in the suburbs returning to revitalized downtowns and their close-in neighborhoods.

Florida Avenue, the main drag through the Heights, "is still a very weird place," Babb says. "You’ve got 5-star restaurants right next to a used-car dealerships with barbed wire wrapped around. It’s a strange place but definitely evolving, not unlike downtown Tampa in the ‘90s and even the early part of the 2000s. That was a ghost town then but now look, it has lots of activity."

Babb brokered the sale of the 10 buildings to Sparano and Masaitis, whose goal is to preserve them and keep the area from gentrifying beyond recognition.

"We didn’t want a big group taking up the premier stuff," Masaitis says. "Our plan is to keep local ownership within Tampa with only modestly increased rents and maintain the Seminole Heights appeal."

A Florida native and Marine Corps vet, Masaitis was working on an MBA at the Naval Postgraduate School in Monterey, Calif., when he met Sparano. Their kids went to school together, and the two got to talking about Masaitis’ life after the military.

"Vets need a challenge,’’ Sparano told him, suggesting they partner on upgrading an 80-unit apartment building Sparano had found in Memphis, Tenn. They sold that for a profit in 2013, then decided to focus on real estate in South Tampa after Masaitis was transferred to MacDill Air Force toward the end of his Marine Corps career.

"I liked Hyde Park, the vintage-ness, the uniqueness," he says. He started knocking on doors, and met people who owned mom-and-pop rentals but were tired of being landlords. Over the next few years, he and Sparano bought several multi-family buildings, fixed them up and sold them.

"Each made a profit, and we rolled that into the next," Sparano says.

Then came the opportunity in Seminole Heights.

A husband and wife there had acquired 10 duplexes and small apartment buildings that they operated under the name Seminole Heights Apartments. They wanted to sell, and Babb marketed the buildings together.

"The properties on their own are probably not something we would have gotten involved with (because) they are too small, but as a package of 46 units, that was something we were glad to work on," Babb said. "We had a lot of interest and they didn’t last that long on the market. I think investors do believe Seminole Heights is a good value and a good longer-term investment."

Seminole Heights’ real estate market has been strong although it took a temporary hit last fall when a sniper, later arrested, shot and killed four people.

"You gonna buy in that area?" Masaitis recalls friends asking him in surprise.

Since closing on the deal, which was financed by the Bank of Tampa, he and Sparano have not had any problems with crime at their properties. Nor have they had many problems of any kind although some of the buildings date back to the ‘20s.

"In Hyde Park, all of the stuff on sale had not been maintained,’’ Sparano says. "The ones in Seminole Heights were in good shape."

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He and Masaitis took over the name Seminole Heights Apartments. The buildings are all structurally different, and have different names — The Tree Fort, Ola Place, and Barracks Cottages, which are actually two small cottages moved from MacDill to avoid the wrecking ball. Many have high ceilings and their original hardwood floors.

The apartments on the river come with canoes for free use by tenants who agree to bag up debris they find in the water.

Rents are modest by Tampa standards — $975 a month for a 1,000-square-foot townhouse in the Branch Court Apartments — and the partners don’t plan to raise them much for current tenants. Bigger increases will come as apartments turn over though they want to avoid raising rents so much they become unaffordable for the young hipsters who give Seminole Heights so much of its character.

With just 46 units, Masaitis and Sparano are able to get by with contract help and avoid hiring full-time maintenance workers. Their philosophy: Do repairs right and you won’t have to worry about them again. And if you treat people well and with respect, they’ll pay their rent.

Despite all their enthusiasm about Seminole Heights, despite all of the money they’ve spent in its bars and restaurants getting to know people there, neither of the partners lives in the neighborhood. Masaitis is in South Tampa; Sparano, who still has a home in California, plans to get a townhouse there.

"We have big families," says Sparano, who has three kids to Masaitis’ four. "Unfortunately, there aren’t many big houses in Seminole Heights."

Contact Susan Taylor Martin at [email protected] or (727) 893-8642. Follow @susanskate

   
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