Tiktin Real Estate Closes $42.95 Million Trade of Coral Springs Office, Retail Portfolio
A North Miami Beach-based investment brokerage found the buyer in about five months.
October 09, 2018 at 12:33 PM
4 minute read
Most real estate investors focus on one type of property by buying only one market segment. But that didn't stop a North Miami Beach brokerage from selling a mixed portfolio that includes office and retail.
Tiktin Real Estate Investment Services Inc. closed the $42.95 million sale of a shopping plaza and two nearby office buildings north of the Sawgrass Expressway in Coral Springs.
Asuman 57th Street LLC bought the portfolio from three limited liability companies affiliated with Davie-based developer, seller and property manager Ross Realty Investments Inc., according to the Broward County property appraiser's office and the state Division of Corporations. The deal closed Sept. 26.
The retail portion of the portfolio is the 40,258-square-foot Waterway Shoppes at 6230-6240 Coral Ridge Dr. That's about a quarter mile north of the office buildings, the 45,344-square-foot Heron Bay III at 5810 Coral Ridge Dr. and the 45,383-square-foot Heron Bay IV at 5830 Coral Ridge Dr.
The portfolio is aptly named the Heron Bay Office and Retail Portfolio since it's in the affluent Heron Bay community.
“Because it was office and retail, it had to be the right buyer because a lot of buyers only wanted the office building and a lot of buyers only wanted the shopping center,” said Adam Tiktin, who worked on the deal for the seller. “But this buyer was OK with the portfolio being office and retail, buying everything.”
Tiktin, president of Tiktin Real Estate, closed the deal along with investment associate Alejandro Snyder.
The buyer who used the Asuman 57th Street LLC is investor Asuman Polat, according to Tiktin. Polat recently sold a building in New York for $81 million and was looking to invest in Florida. She bought the portfolio in a cash deal.
With this transaction, Ross Realty, led by founder Barry Ross and Bill Matz, came full circle on its business strategy of buying, developing, leasing and selling property.
“The market has been so hot for commercial property sales here in South Florida for so long. It's really been a 10-year run since the crash in 2008. I think they figured the timing was just very good,” Tiktin said.
Ross Realty developed Waterway Shoppes and Heron Bay III in 2006 and Heron Bay IV in 2008, property records show.
The shopping plaza and Heron Bay IV were fully leased when sold. Waterway tenants include AT&T Inc., Cold Stone Creamery and Hurricane Grill & Wings. Office tenants include Joe DiMaggio Children's Hospital medical offices.
Heron Bay III was 65 percent occupied and had a 15,866-square-foot vacancy at the time of sale.
The three properties had to be sold together because of a loan covering all of them, according to Tiktin.
“They had a substantial loan on the property, and the loan that they had was approximately $22 million in debt that they had on the property, which they paid off at the closing,” Tiktin said.
With the securitized debt, the seller faced a prepayment penalty, Tiktin added.
“The defeasance ended up being a $1.3 million expense to pay off that loan,” he said.
Despite the challenges with the portfolio, Tiktin Real Estate found the buyer in about five months.
“This property, even with the challenges with the existing loan that was on the property and the product types being office and retail, there was still a lot of demand for this property because of the quality of the property,” Tiktin said.
Overall, the portfolio was 88 percent occupied at the time of the sale.
Tiktin Real Estate ended up canceling the initial contract.
“I advised the seller to put a clause in the contract where the seller can kick the buyer out of the deal if the buyer didn't produce documents within the first five days of going to contract in order to assume the loan, and the buyer agreed to it in the contract. But then he didn't provide the documents to assume the loan, and then we went to contract with Ms. Polat,” Tiktin said.
The deal for the 130,985-square-foot portfolio breaks down to $328 per square foot.
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