Nine-Building Office Park Sells For $72 Million

Written by on 11.08.16 in Investment Trends, Office - No comments
1450 Centrepark Blvd.

The nine-building Centrepark office park in West Palm Beach was acquired by Colonnade Properties for $72 million.

Centrepark East Holdings and Centrepark West, both managed by J.P. Morgan Investment Management, sold the nine buildings totaling 617,791 square feet on 25.6 acres to Colonnade Centrepark East and Colonnade Centrepark West, both affiliate of New York-based Colonnade Properties, with partners Grace Development and Flagler Realty. The buildings have about 485,000 square feet of leasable “Class A” space, so the price worked out to $148 per square foot.

The deal was brokered by Neil Merin of NAI Merin Hunter Codman and CBRE’s Christian Lee, Jose Lobon, Amy Julian, and Marcos Minaya. Officials with Colonnade Properties couldn’t be reached for comment.

Rialto Mortgage Finance provided a $36 million mortgage for the five buildings in the east portfolio: 1400, 1450, 1475 Centrepark Blvd. plus 1720 and 1801 Centrepark Drive East. NXT Capital granted an $18.45 million mortgage covering the west portfolio: 1661 Worthington Road plus 2101, 2301 and 2400 CentrePark West Drive.

All of the office buildings are located on the west side of Interstate 95 on the south side of Australia Avenue, so they are a quick drive to downtown West Palm Beach and Palm Beach International Airport. The seller assembled the properties from 2006 through 2008 for a combined $109.25 million, so the J.P. Morgan-managed fund took a considerable discount on the sale.

They office buildings were development between 1988 and 2004. The tallest is 10 stories. They are 82 percent occupied with tenants such as Ocwen Financial, SV Microwave, Conroy Simberg, Seacrest Services and Earthlink.

“Through the lease-up of 85,953 square feet of available space and a projected market rent growth of 27 percent over the next five years, the property offers a tremendous upside opportunity for the buyer,” Lee said. “All nine buildings are in excellent physical condition, the property is strategically located and offers a competitive parking ratio of 4.3 spaces per 1,000 square feet – these factors combined will allow Centrepark to continue to attract new tenants.”

According to CBRE’s third quarter office market report for Palm Beach County, the vacancy rate declined 260 basis points year-over-year to 16.7 percent while asking rent has increased to $19.97 per square foot. The West Palm Beach submarket had a 17.8 percent vacancy rate with asking rent of $20.18 per square foot. Year-to-date net absorption was 409,142 square feet countywide, including 74,123 square feet in West Palm Beach.

 

Source: SFBJ

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