HFF senior managing director Chris Drew, left, and director Maxx Carney, right, in Miami. Courtesy photos

HFF Inc. secured $115 million for West Palm Beach's Esperante Corporate Center office tower to refinance an existing floating-rate loan.

The 255,984-square-foot, 20-story Esperante Corporate Center is mixed-use with the first 17 stories being offices, residences above and first-floor retail. The loan was for the tower's office portion.

HFF senior managing directors Chris Drew and Hermen Rodriguez and director Maxx Carney in Miami closed the financing for office tower owners New York-based RedSky Capital LLC and London-based JZ Capital Partners Ltd. The deal closed Sept. 28.

This breaks down to a $95 million senior loan from New York-based alternative investment manager Apollo Global Management LLC and a $20 million mezzanine loan from Prudential Financial Inc.'s Newark, New Jersey-based investment management arm PGIM Inc., formerly called Prudential Investment Management.

Apollo Global provided its loan on behalf of an account it manages for a life insurance company.

The refinancing of the existing one-year Bank of America Corp. loan was done at least in part to take advantage of historically low interest rates, Drew said.

“They decided to take advantage of that prior to any significant increases in the index rates. It's an opportune time to borrow right now, so they decided to take advantage of that,” he said.

He declined to disclose the new loan's fixed interest rate and said he doesn't know the previous loan's floating rate.

The new loan is for five years and is higher in value than the previous loan, Drew added, declining to disclose the previous loan value.

The tower at 222 Lakeview Ave. overlooking the Intracoastal Waterway and the town of Palm Beach is less than a mile from the Brightline train station that connects to downtown Fort Lauderdale and Miami and is about four miles from Palm Beach International Airport.

Office tower owner 222 Lakeview LLC, registered to RedSky in state corporate records, is fighting to keep the water views.

The company sued West Palm Beach on Sept. 12 over the creation of the Okeechobee Business District, which the complaint said would allow taller buildings between it and the water in place of a five-story limit.

The height limit east of Olive Avenue was imposed in 1996, according to the Palm Beach Circuit Court petition. Esperante Corporate Center grandfathered in since it was built in 1989 east of the avenue.

The city planning board, downtown action committee and city commission approved the district, over the landlord's objections, according to the complaint. In early 2016, the New York-based Related Cos. proposed building a tower on Lakeview Avenue at a historic church site while preserving the church. The city bans comprehensive plan changes initiated by developers and proposed the change on its own.

The city declined to comment on pending litigation and has not filed a response to the lawsuit.

Drew said the lawsuit didn't impact the loan closing.

In the last round of negotiations, six lenders were interested in the senior loan and four in the mezzanine, he said.

The office space is 86 percent occupied with Bank of America, Holland & Knight and real estate investment trust Chatham Lodging Trust among the tenants.

Esperante Corporate Center recently underwent an $8 million renovation, including changes to its six-story atrium and second-floor lobby, according to its website.

222 Lakeview bought the building for $125.8 million in July 2016, according to the Palm Beach County property appraiser's office.

RedSky Capital, which owns, operates and develops real estate with a focus on value-add opportunities, and JZ Capital, a closed-end investment company publicly traded in London, in 2012 partnered to buy and develop real estate in growing markets. They focus on value-add opportunities or renovations of underperforming assets.

The loan amount speaks well of the West Palm Beach office market, which has been in demand, Drew said.

“I think that this is absolutely a testimony of the strength of the Palm Beach office market, in particular the hedge funds that have recently relocated down there,” he said. “That coupled with the residential units that have been built, that market is as dynamic as it's ever been.”