for the RECORD
ADULT CLUB BUSINESS GETS PUBLIC EXPOSURE
Florida’s adult entertainment industry is almost exclusively a private enterprise,
though that might soon change with the purchase of one such establishment by a
publicly traded company.
Rick’s Cabaret International Inc., based in Houston, bought the 47,000-sf Tootsies Cabaret nightclub in Miami Gardens for $25 million in early December,
marking its first foray into a crowded field of adult clubs statewide. The acquisition includes leasing rights to the club’s property, including a five-acre parking
lot, through mid-2034.
The purchase price includes $15 million cash plus $10 million in promissory notes
to be paid over the next three years to the club’s previous owners, Miami Gardens
Square One Inc. and Stellar Management Corp.
Tootsies was already marketed as one of the biggest and best gentlemen’s clubs
in South Florida, boasting up to 250 “entertainers” along with amenities such as a
New York subway car replica for private dances.
Nasdaq-traded Rick’s Cabaret estimates it will gain approximately $18 million in
annual revenue from the Tootsies acquisition, and anticipates the deal will help it reach
$52 million in fiscal year 2008—more than twice what it posted two years earlier.
“It’s an enormously popular club,” says Allan Priaulx, a Rick’s Cabaret
spokesman in New York. “It fits perfectly with our expansion plans.”
Priaulx added that the company is looking at other prospective purchases of
adult clubs within Florida, along with “a very robust pipeline of potential acquisitions” nationwide. He points out that the adult entertainment industry is going
through a consolidation phase similar to the casino business in the 1990s, adding
that it has become a closed-end business because many local governments aren’t
allowing new adult clubs to open.
Such clubs are a bane to larger metropolitan areas, given that they are located in
high-traffic areas with highly visible neon signage. For example, Tootsies is near US
441 where Florida’s Turnpike converges with Interstate 95 in the Miami area.
The prospect of public money flowing into a largely private business doesn’t seem
to faze club owners like Joe Redner, whose Mons Venus establishment in Tampa is nationally recognized by traveling businessmen and professional athletes alike.
“There’s room for everybody, just like with furniture stores,” Redner says of
Rick’s Cabaret’s entry into Florida. “There’s always a better way to build a
mousetrap.”—Carl Cronan
KTR CAPITAL GROWS PORTFOLIO
Pompano Beach—KTR Capital Partners,
a New York-based private equity firm,
has made several acquisitions of Florida
commercial properties lately. It bought a
121,000-sf distribution center along Interstate 95 here in a sale-leaseback
transaction with FlexSol Packaging,
shortly after getting a similar 105,000-sf
facility in Riviera Beach from Suncrest
Supply. KTR Capital previously purchased a seven-building, 430,000-sf in-dustrial/flex complex in Oldsmar from
Harrod Properties Inc. The values of the
transactions were not disclosed. KTR
Capital currently owns at least 3. 5 million sf across the state and is pursuing
additional acquisition and development
opportunities.
HHGREGG WAREHOUSE
PART OF EXPANSION PLAN
St. Augustine—A national retailer’s ex-
pansion into Florida includes a new
71,760-sf warehouse lease at First Coast
Distribution Center here. Hhgregg Inc.
will be the first tenant of the four-build-
ing, million-sf industrial park. Graham &
Co./Corfac International, the complex’s
owner and developer, expects to com-
plete the 203,320-sf first phase in February.
Hhgregg, which sells home appliances
and consumer electronics, plans to
open five central Florida stores with fu-
ture locations in the Jacksonville and
Tampa Bay markets.
POLLACK SEEKS SUNSHINE STATE OPPORTUNITIES
Pollack Partners expects to invest a sizeable fraction of its $1-billion development
and acquisition fund in Florida, where it already has one multifamily project
under way.
Pollack Partners Fund I LP, formed with an affiliate of Goldman Sachs in December, will seek value-add opportunities in several states over the next four years.
Between $200 million and $300 million is likely to be put into Florida, says Steven
Shores, managing director of Atlanta-based Pollack.
The firm is already working with Tampa-based Mainsail Development Group on
a $42-million upscale rental apartment complex north of Tampa International Airport. The 320-unit community, which will offer one- and two-bedroom units with
monthly rents around $1,100, will begin construction in May and be finished in
2009, according to Shores.—Carl Cronan
DEVELOPERS PLAN 900 UNITS
FOR FLAGLER VILLAGE PROJECT
Ft. Lauderdale—A group of Florida-based developers plans an estimated
$350 million worth of multifamily residential projects in this city’s Flagler Village neighborhood. Orlando-based Zom
Development, Minto Communities of Coconut Creek and Trammell Crow Residential, headquartered on Boca Raton,
aim to develop 900 apartment and condominium units on 12 acres assembled
over the past year. The first segment,
217-unit 440 Flagler Village, is currently
under construction and is expected to
deliver in 2009.
