PALM BEACH, FL-1200 Corporate Place, a four-story, 137,021-square-foot office building in Boca Raton, has sold for $15.25 million, or $111 per square foot. Keystone Property Group, a PA-based real estate developer, acquired the asset.
CB Richard Ellis Capital Markets arranged the sale. Christian Lee, vice chairman, of CBRE’s Miami office led the marketing efforts. CBRE South Florida professionals Charles Foschini, Christopher Apone, Scott O’Donnell, Jeffrey Kelly, and Dominic Montazemi also worked on the deal.
“This is a deal that we would call value-add or opportunistic because the property was only a little more than 50 percent occupied,” Lee tells GlobeSt.com. “Keystone Property Group has an appetite for underperforming deals. They feel they can come in with fresh capital and be more successful on the leasing side than the previous owner.”
The property’s rent roll includes both national and regional tenants such as Sun American Bank, National Holdings Corporation, Perr & Knight and Striano Financial Group. Lee says Keystone plans to freshen up the common areas, work closely with the tenant rep community in the local market and try to “steal tenants from other buildings.”
Lee is bullish on the opportunities for Keystone in Boca Raton. “We certainly say that the market has picked up,” he says. “There was positive absorption in the most recent quarter. The dial seems to be headed in the right direction.”
Palm Beach County fared relatively well during the first quarter of the year with a drop in vacancy rates, according to Cushman & Wakefield. However, the firm reports rental rates also decreased as a result of aggressive landlords looking to increase occupancy. During the first three months of the year, office tenants restructured existing lease terms, downsized and moved horizontally within the county, which kept the market active in key regions.
The first quarter overall vacancy rate in Palm Beach County’s office market decreased 2.5 percentage points to 22.0%, compared to first quarter 2010, according to CushWake. The class A office product experienced a significant improvement in the overall vacancy rate from 20.8% a year ago to 18.8%.
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