The Hoffmann family sells several downtown Naples homes while maintaining its commitment to SWFL.
Hoffmann Commercial Real Estate sold most of its downtown Naples properties for strategic reasons.
After speculations circulated, the corporation acknowledged the sale of 27 properties to Aspen, Colorado-based M Development on Friday, according to Steve McQuilkin and Laura Layden of Fort Myers News Press.
The historic deal should close on Monday. The purchase price wasn’t announced, but some expected it to exceed $250 million.
“We profited greatly. Before, the company was well-funded. We have no immediate capital plans” stated David Hoffmann, founder of Hoffmann Commercial Real Estate. Additionally, He said they’ll likely issue a Treasury bond.
The Hoffmanns will continue investing in Naples, Southwest Florida, other Florida counties, and the nation and world. Buying businesses with real estate, sometimes large real estate, has become more popular.
From Estero’s Hertz Arena to Naples’ Old Collier Golf Club, the family owns substantial real estate and businesses in Southwest Florida.
“We’re not going anywhere,” Hoffmann added.
Due to his love of Naples, the sale is bittersweet. If he had run the family’s business, he joked, they might not be selling the properties.
The idea originated from his kids to rebalance the investment portfolio and capitalize on Naples real estate appreciation.
The senior Hoffmann, 71, appointed his sons Geoff and Greg Hoffmann as co-CEOs after retiring last year.
For Hoffmann Family of Cos. and its commercial real estate business, the transaction will be the largest ever.
“I thought I’d never sell it,” Hoffmann said of the notable Naples properties. “But, you know, as with anything in life, things change.”
The family sells a lot of real estate on Fifth Avenue South or Third Street South, Naples’ most popular shopping, dining, and entertainment streets for locals and tourists.
Many of those buildings will lose their Hoffmann branding under new ownership.
The corporation leases back space for all its businesses in the buildings it sells.
One tenant, not owned by the Hoffmanns, bought its building from the family, thus it’s omitted from the transaction. That tenant is Kravet, a fabric, furniture, and decor business at 959 First Ave. S.
David Hoffmann enjoyed visiting his independent tenants, especially eateries, outside of his daily duties.
“I had great relationships with my tenants,” claimed he. “But it’s time to move on.”
Due of its city investment, Hoffmann said M Development was the top bidder for the prime assets.
The out-of-state developer plans to build 52 luxury condominiums and nearly 126,000 square feet of commercial uses, including a Restoration Hardware store, on more than 4 acres of mostly vacant land between Tin City and Fifth Avenue.
“They know and understand Naples.” The Hoffmann patriarch said.
The family’s investment in Southwest Florida may change.
The Hoffmanns are committed to Southwest Florida, and the Hoffmann Family of Cos. will remain one of the largest employers with over 2,000 employees.
The family will possess more than 20 properties in the region, including the Port O Call Marina, 10 industrial sites, and 1,000 acres of agricultural land, after the transaction.
David and Jerri moved to Naples in 2015.
They made local headlines that year after investing roughly $75 million on their first commercial real estate, seven Fifth Avenue South buildings and a parking lot.
The Naples purchasing binge continued with additional real estate and local businesses.
The Hoffmann Family of Cos. and its affiliates became the city’s largest privately held commercial real estate enterprise.
Greg Hoffmann said, “We are proud of the impact we’ve made on Fifth Avenue South, a world-class destination that rivals avenues and boulevards around the world. While we are selling some of our local real estate holdings, we remain dedicated to investing in Southwest Florida businesses and maintaining the ‘Hoffmann Standard’ across all our holdings.”
Businesses like agribusiness, aviation, financial services, hotel, industrial manufacturing, maritime, media and marketing, professional services, and transportation have replaced real estate as investment targets.
The corporation has made over a dozen investments in businesses in the previous two years, including its recent purchase of Linstol, a Naples-based maker of in-flight headphones. Wayne Manufacturing, RMC Destination Management Co., JED Transportation, Shepler’s Mackinac Island Ferry, and hospitality, marine, and media enterprises are among the investments.
“This transaction represents an exciting new chapter for our firm to invest in even more companies and management teams that share our culture and performance values,” Geoff Hoffmann said. “Southwest Florida is a world-class destination and will remain in our portfolio.”
IPC Naples leasing and sales agent Rob Carroll said the properties weren’t offered for sale but had attracted many buyers. He represented M Development, which was seeking prominent downtown real estate.
“I think when they came to town, they realized that this market was very similar to other places and areas that they had success in,” said Carroll.
The retail assets M Development buys are its “bread and butter,” he said.
Longtime developer Mark Hunt runs the company.
Rich neighborhoods are M Development’s aim for revitalization. The developer claims to have completed a “variety of transformative projects” in Aspen, Palm Beach, and Buckhead, Atlanta.
Hunt recently invested heavily in Florida’s east coast.
The Palm Beach Daily News reported that he bought commercial property on Worth Avenue, one of Palm Beach’s wealthiest streets, for $58 million in 2021.
The developer is controversial. Some of the buildings he’s bought for reconstruction in Aspen are dormant and decaying, making the mountain town ugly.
Carroll said the Hoffmanns have upgraded several of the Naples buildings M Development is buying, but others can be upgraded and some can be redeveloped.
David Stevens and Tara Stokes of IPC represented the Hoffmanns in the firm’s largest deal ever.
Carroll said the deal is large but wouldn’t say how much.
“I can’t think of another like it” he said. “The only one that I can think of that’s larger would be the Beach Club.”
While being constructed, the Naples Beach Club hotel sold for about $363 million in 2021, including its golf course. The price was called a “monster price.”
The article originally appeared on Fort Myers News Press.