The foresight of turning this white elephant into highly sought class B office space, though, is paying off handsomely for locally based Brenner Real Estate Group and the affiliated Zenith Realty Investments Inc.
"It took a lot of creativity and vision to make it happen," says Scott Brenner, who invested in the project with Brenner Real Estate and Zenith Realty principals Hy Horowitz, Marc Kopelman and Brian Horowitz.
Such foresight also is paying dividends for the city, as the Hillsboro Commons' redevelopment project has become something of a linchpin to revitalization at the major intersection of Hillsboro Boulevard and Federal Highway, 37 miles north of Downtown Miami.
"To see that building come alive--the design and architecture is contemporary and upbeat--it has become a spark that has basically spilled over into the entire community," Larry Deetjen, Deerfield Beach city manager, tells GlobeSt.com.
Neighboring property owners see the value of joining in the redevelopment effort now that the Brenner-Zenith venture is clearly profiting from nearly $3 million in streetscaping improvements at the intersection.
"We're also hearing existing smaller business owners ask how they can get involved," Deetjen says. "It not only benefits newcomers but people who have been there a long time."
Although it just opened for tenancy, Brenner says, Hillsboro Commons already is 40% leased with contracts pending on another 40%. Asking rents average around $14.95 triple net.
"It could be described as class B office space with class A finishes and amenities," Brenner says, including an ample amount of underground parking. South Florida Business Journal leases 9,391 sf in the building.
"The building is situated on Hillsboro Boulevard--the major state road to the city's beach district," Deetjen says. "And Deerfield Beach has consistently been voted as the most popular beach in Broward County. So on a daily basis you had thousands of visitors making their way to the beach past this vacant building."
Considering the historic failings of the prior owners, the Brenner-Zenith venture viewed the property in terms of its core acquisition strategy.
"One of our trademarks is finding assets like this that are well-located but neglected," Brenner says. "We look for value-added opportunities. We're not a nine to 10-cap buyer. So it takes some creativity."
The venture invested about $100 per sf in total hard and soft construction costs, Brenner says.
County records show that a company by the name of Crystal Palms granted Hillsboro Commons, a subsidiary of Zenith Realty, a warranty deed on the property last June in exchange for $1.75 million. Then the venture secured $7 million in mortgage financing through Colonial Bank.
"When our sister company, Zenith, purchased Hillsboro Commons, it seemed a natural progression for us to relocate there, too," Brenner says. "We can service the tri-county area easily from here, with the building's position only a minute from Boca Raton and about 15 minutes from Fort Lauderdale."
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