Unlike the repositioning by new owners of two other large Southside office parks in Jacksonville to include residential development, the buyer of the Jacksonville Citigroup campus is focused on its inherent use.
“When you own office product at the correct basis, you have the ability to maneuver the challenges in the office market today," said Harrison Loew, director of acquisitions with The Wideman Co. of Orlando.
“Multifamily is not a plan for this property as of now. We bought it as office real estate and intend to steward the asset as the high-quality class A office asset that it is.”
The 73.4-acre Citigroup campus, he said, “is uniquely positioned” and specific to The Wideman Company’s strategy.
“We’re very diligent on what assets we select,” he said during a Jan. 24 interview.
“Over the last 18 to 24 months, we have been able to engage in an unusual market dynamic that has been developing since 2020," he said.
"Today there is significantly less competition for this type of product in what we see as fundamentally sound markets," he said,
“We’ve been heavily focused on that.”
The Citigoup property “fit well into our portfolio.”
Elsewhere in the area, Jacksonville-based Dream Finders Homes LLC bought the almost 70-acre Prominence Office Park in 2024 and Jacksonville Beach-based Trevato Development Group bought the 30-acre Allstate Campus, renaming it The Pondry, in 2023.
But those buildings are older than the Citigroup structures.
Prominence comprises seven buildings developed between 1988-98. Pondry has three office structures built between 1995-2001.
Both buyers want to rezone and reposition the office developments by adding residential and mixed-uses, although Trevato has run into opposition with its San Pablo Road neighbors.
Loew said the Citigroup property investment was similar to those Wideman made in other markets, including Houston.
“We came in at an attractive basis for this type of asset. Our office thesis is centered around entry basis and capital resources to negotiate long-term, sizable leases,” he said.
The deal
New York City-based Citigroup Inc. sold its Flagler Center campus in South Jacksonville to The Wideman Co. in a sale-leaseback Jan. 17.
The deed recorded Jan. 23 with the Duval County Clerk of Court shows a purchase price of $24 million and a mortgage of $27.81 million.
Citigroup Technology Inc. sold the property to Wideman entity Jax LC Owner 2 LLC, which then deeded a portion of the property to Jax LC Owner 1 LLC and Jax LC Owner 3 LLC. Loew said details of those structures remain confidential.
Separately, a $27.82 million mortgage was recorded by UMB Bank N.A. Trustee of Salt Lake City to Jax LC Owner 1 LC.
The Duval County Property Appraiser’s office assessed the property at $68.5 million for tax purposes.
“With a credit tenant like Citi involved, that’s a good feather in your cap and something that fits with the rest of our portfolio,” Loew said.
He said Wideman has focused heavily on office investment the past two years.
“There’s tremendous value there and tremendous value in the long term. We look in 10-, 20- and 30-year time horizons, not in three-, five- or seven-year horizons,” he said, meaning Wideman has a decadeslong intention to own assets, and not flip them in several years.
Since the pandemic that began in 2020, “Florida has boomed even more than before and we have really aggregated a lot of commercial real estate” along the I-95, I-4 and I-275 corridors, “the main thoroughfares in Florida.”
“We believe in Florida for the long term,” Loew said.
During the pandemic, employers and residents relocated to Florida where shutdown restrictions were lessened and employees who could work remotely set up offices in the sunshine and often in larger, less expensive housing than in denser cities.
Loew said the difference in the $68.5 million campus assessment and the $24 million acquisition price can be attributed to a lack of “market data due to low transaction volume" for county assessors to determine true value.
“Ultimately with commercial real estate, the market price and the true value is whatever any one person is willing to pay for it.”
He said there also is a smaller field of investors in suburban office projects. As employers sent workers home during the pandemic, many companies found they needed less space to lease and downsized.
“They’re just not as convinced that this product type is as viable in the long term,” Loew said of some investors. “The Wideman Company was built on it."
The Wideman Co., an affiliate of Susquehanna Holdings Ltd., is a real estate investment firm that focuses on Class A single-tenant office and industrial assets with large, high-profile, stable tenants.
With more than 50 years’ experience, the company oversees about $1.6 billion in commercial real estate assets, spanning 6.1 million square feet of interior space primarily across the Southeast and Sunbelt regions.
With roots in Pennsylvania, Susquehanna Holdings Ltd. Inc. moved to Orlando in the early 1990s.
The Wideman Co. Chairman Edmund Wideman III is the founder of Susquehanna Holdings.
Edmund Wideman III is a partner in the LLC that bought Innovation Park at 6735 and 6737 Southpoint Drive S. in Jacksonville in 2016.
The Wideman Co. LLC was registered with the state in 2020. Edmund Wideman III’s sons Matthew Wideman is CEO and Christopher Wideman is COO at The Wideman Co.
“We look forward to a long and fruitful relationship with Citigroup and its team in Jacksonville,” Matthew Wideman said in the company's Jan. 22 announcement of the deal.
Citi in the city
Citigroup has operated a major credit card operations center in Jacksonville since 1997, when it bought AT&T’s Universal Card business.
In 2005, Citi Cards moved it from Deerwood Center to the new campus it developed at 14000 Citicards Way in Flagler Center, which is south of Old St. Augustine Road between Interstate 95 and Philips Highway.
The campus comprises four connected buildings that total more than 530,000 square feet of space with 2,652 parking spaces.
Another 40,000-square-foot building that the Duval County Property Appraiser classifies as a private school remains separate.
The Wideman Co. announcement said that three three-story buildings, totaling 491,386 square feet, are used for offices, and the fourth is an amenity center with a food hall, outdoor dining and a conference facility.
The announcement said Citigroup will continue occupying about 230,000 square feet of office space.
Citigroup will lease all of Building C and the first-floor space in Building B for 15 years, with four five-year renewal options, lease agreements show.
Buildings A and B are available for lease, while Building D is the amenities building.
Citigroup said it will retain its 4,000 employees in Jacksonville “with plans for growth in the next two years.”
Because of the hybrid workforce, Citigroup did not need all the space.
“As part of ongoing efforts to optimize our facilities, Citi recently entered into a purchase and sale agreement for our Jacksonville campus,” Citigroup said Jan. 23 through a spokesperson.
“As part of this agreement, Citi will lease back a portion of the facility from the new owner. While our employees continue to enjoy a hybrid working environment, this decision allows us to rationalize our space, creating an optimal work environment when our teams are in the office together.”
The other 260,000 square feet of space is being offered to new tenants. Colliers International Vice President Chuck Diebel is handling leasing for the property. Diebel also represents the landlord in leasing Innovation Park.
Loew said Citi will retain its name on the building it occupies, which is an asset when it comes to marketing the remaining space to other tenants.
He said that when the campus was developed 20 years ago, Citi “never spared an expense with the development of it.”
Among the attributes: Class A space, full backup power, security, parking, a food hall with indoor and outdoor seating, a fitness and medical center, and more.
No immediate upgrades
Loew said there were no immediate upgrades planned at the campus.
“When these campuses were built, they were essentially built for thousands of employees,” Loew said.
“It is an excellent solution for any large tenants in the market who want an institutional, quality campus that will be neighbors with one of the largest institutions in the U.S.,” he said.
Diebel said during the interview that there are prospective area and national tenants seeking at least 100,000 or 200,000 square feet of space.
“We’ll be going after those big guys that are a year and a half or two years out,” he said, referring to the time it can take to negotiate and make a move.
Diebel said the plan is to lease to tenants that need at least a full-floor of space, and there are five full floors available. Each floor is about 50,000 square feet.
Loew said that while there will continue to be hybrid work or companies that need less space than before, more employers are calling their workforce back into the office.
“There are a lot of tenants in the market who are growing rapidly,” he said.
Office vacancy in Jacksonville overall runs up to almost 24%, according to market research reports. Southside area vacancy appears to be lower.
One potential tenant is actively looking in the market.
Through Jax LC Owner 2 LLC, Wideman was one of seven landlords that replied to the Citizens Property Insurance Corp. invitation to negotiate for office space as it looks for smaller space than what it leases in Downtown Jacksonville.
Citizens seeks 203,000 to 215,000 square feet of space, a minimum of 1,107 parking spaces, offices either in a single building or within the same campus, and a lease with an initial 10-year term and renewal options.
It is focused on Downtown and Southside.
“We couldn’t be happier with the Citibank campus. I think it’s important to highlight the quality of that piece of real estate,” Loew said.
“There are some deals that come around once a cycle, and that’s one of them.”