DORAL, FL-In its fourth recapitalization deal in Florida since May, New Boston Fund, a private equity real estate investment firm based in Boston, has acquired controlling interest in One Park Square. The 281,623-square-foot, 11-story class A office tower is located in the heart of Miami-Dade's Airport West market.
New Boston Fund is recapitalizing the asset in partnership with the previous owner, Park Square Commercial – F1 Building LLC, an affiliate of Miami-based Shoma Development Corporation and Shoma Homes. As a part of the recapitalization, New Boston and Shoma Group paid off the existing debt and will fund the project’s leasing and operating costs moving forward. Terms of the deal were not disclosed.
"This transaction allows the building to begin moving forward," Pryse Elam, southeast regional director for New Boston Fund, tells GlobeSt.com. "The building is now debt-free and money for tenant improvements and leasing commissions is readily available. With no debt, this is probably one of the most financially stable buildings in the market."
Park Square Commercial completed construction on the project in early 2010. One Park Square needed a recapitalization to achieve a lower basis and drive occupancy. The property is 89% vacant. Shoma Group is headquartered in the building. Other tenants include The Latin Recording Academy, Retailnova and Midea.
Tere Blanca, president of Miami-based Blanca Commercial Real Estate, tells GlobeSt.com that her firm is announcing a major lease at One Park Doral in the coming days. Blanca Commercial Real Estate is the building's exclusive leasing agent.
"You could put this building in Coral Gables or on Brickell Avenue, and it would still be a class A tower," Blanca says. "We don't believe we have to aggressively discount to get the right corporate users into the building. We've been successful in securing strong rates for this asset, but with the lower basis we'll have more flexibility to structure transactions creatively."
New Boston has been pursuing equity recapitalization deals on office, industrial and apartment properties along the East Coast. New Boston used the same strategy to recapitalize three properties in Orlando this year. New Boston acquired controlling interest in Southpoint Executive Center and Maitland Green I & II in May and July, respectively. New Boston’s Orlando portfolio is 48% leased.
"One Park Doral is another example of the value of a building falling below the debt on the building," Elam says "When that happens, the owners are disinclined to fund tenant improvements and commissions because they aren't sure what the lender will do. The lender is disinclined because they don't know what the borrower is going to do. The buildings get stuck. A recapitalization removes the lender from the equation. We've found a niche that works for us in Florida."
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