CBRE Plays Dual Role in $81.5M Sale of Lauderdale Office Tower
CBRE represents the seller and secures financing for the buyer of 200 East Broward.
November 07, 2017 at 11:56 AM
4 minute read
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CBRE Inc. played a dual role in the $81.5 million sale of a downtown Fort Lauderdale office tower — it represented the seller and secured financing for the buyer.
Banyan Street Capital LLC, a Miami-based real estate investment company, bought the building at 200 E. Broward Blvd. in a joint venture with funds managed by Los Angeles-based asset manager Oaktree Capital Management LP.
CBRE capital markets vice chairman Christian Lee, senior vice president Jose Lobon, and financial analysts Andrew Chilgren and Tyler Ploshnick, all based in Miami, represented the seller in the transaction that closed Oct. 25. CBRE declined to disclose the seller.
Broward County property appraiser's records identify the seller as the Realty Associates Fund X, which is affiliated with Boston-based investment manager TA Realty LLC.
Separately, CBRE debt and structured finance division vice president Amy Julian in Miami closed a $55.5 million, 10-year, fixed-rate loan from life insurance company MetLife on behalf of the buyer. That deal also closed Oct. 25.
The 21-story building has parking on the first eight floors and offices above. The 226,376-square-foot, Class A office building sold for slightly more than $360 per square foot of office space.
The building is a total of 447,253 square feet including parking, according to the property appraiser's office.
The sale illustrates a healthy downtown Fort Lauderdale office market. In the past five years, it experienced a 605,000-square-foot positive net absorption, or more than twice that of the next highest Broward submarket, Lee said.
“This was led in part by a tremendous migration of tenants from Broward County's suburban office markets. More than 460,000 square feet of suburban tenants have chosen to relocate” to the central business district, he said.
There has been no new offices added in downtown Fort Lauderdale in this cycle, while occupancy rates are high, Lobon said.
“The downtown Fort Lauderdale market is very desirable by both tenants and from the capital markets' perspective. It's a very tight market,” he said. “It has allowed landlords to push office rents tremendously.”
The tower known as 200 East Broward is 95 percent occupied, and the 22 tenants include PNC Bank, Greenspoon Marder, Shutts & Bowen, and Weiss Serota Helfman Cole & Bierman.
Since 2014, rents have increased 43 percent, according to Lobon.
And that's good news for the buyer. Once existing tenants' leases expire, the new landlord can seek new leases with higher asking rents.
“It creates a great opportunity for the new buyer to roll the in-place rents to market. Leases were executed in the past. and now those contract rents are at levels that are significantly below what the market can achieve and what the market is achieving for comparable leases for this and other buildings. As these leases expire, the buyer will be able to lease them at higher rent,” Lobon said.
TA Realty bought the building in July 2014 for $66.4 million, according to the property appraiser's office.
Recently, there's been $5.7 million in building improvements, including lobby upgrades in 2016, according to CBRE.
The robust downtown office market also prompted interest from lenders, Julian said.
“There was a lot of interest on the debt side from lenders,” she said. “We also were able to secure future proceeds for the buyer to continue cosmetic upgrades of the building … so that includes continuing to upgrade the common areas.”
CBRE marketed the property for about four weeks and received more than 10 offers, Lobon said.
Colliers International South Florida executive vice president Jonathan Kingsley and senior vice president Jarred Goodstein and senior property manager Keeley O'Leary in Plantation assisted the CBRE team in marketing the property. Kingsley and Goodstein's offices are in the Fort Lauderdale building.
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