(Crystal Proenza is associate editor of Real Estate Florida.)
BOCA RATON, FL-Coral Gables-based Flagler Development Group has purchased 8051 Congress Avenue, a four-story, class A office building fully occupied by IBM, for $42.2 million. The 160,000-sf building, located within Beacon Square Professional Campus, was originally developed in 2001 as a built-to-suit for IBM and partially owned by Codina Group, now part of Flagler.
"We bought it because we love the Boca Raton submarket and we are a company that is growing and looking for good quality assets in office and industrial product," Eric Swanson, vice president and South Florida market officer for Flagler, tells GlobeSt.com."We know the building was built in a first-class manner and managed well, and that gave us a great deal of comfort when we were buying it."
Falcon Real Estate Investment Company LP, an advisory and asset management firm, sold the property on behalf of its client, London-based Strategic Real Estate Advisors. Manny de Zarraga, Danny Finkle and Hermen Rodriguez of Holliday Fenoglio Fowler represented Falcon in the transaction.
"Falcon acquired this core, well-located asset for $33.8 million and was able to maximize the sales price, providing our client with an attractive capital gain even in a difficult commercial real estate environment," Robert Moreira, senior vice president of Falcon, stated in a release.
Carl Omark, vice president of New York-based Falcon, tells GlobeSt.com that the seller received a good price for the building considering the fact that IBM's lease is up for renewal in September 2011. The company has two five-year options to renew, he says, but there is a risk that the tenant may decide to renew only a portion of the lease or make other plans. However, this was not the main reason for selling the building, according to Omark, who says the seller was just ready to look for other opportunities.
Flagler does not seem to be worried about the tenant's upcoming lease renewal. "We think the world of IBM as a tenant and have had a long-standing relationship with them that we expect to continue," says Swanson.
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