Despite Challenges, SunTrust Center Trades for $90M

Located at the crossroads of the Central Business District and the mile-long stretch of commerce along Las Olas Boulevard, SunTrust Center is a rare asset to come to market.

MIAMI— Steelbridge Capital has acquired the SunTrust Center, an institutional quality two-building class A office complex, in Fort Lauderdale, FL, for $90 million. That’s the largest office building to trade in Broward County’s Downtown submarket in the past 12 months. Located at the crossroads of the Central Business District and the mile-long stretch of commerce along Las Olas Boulevard, SunTrust Center is a rare asset to come to market. The complex spans a fully city block—270,000 square feet—at 501 and 515 East Las Olas Boulevard. According to Steelbridge, it was hotly contested among local and national investors. “The acquisition of this trophy asset was a tremendous challenge with a lot of moving pieces that included conducting due diligence while simultaneously planning and budgeting for a substantial capital investment and repositioning—all while negotiating a sizable lease with the seller, SunTrust Bank,” Mike Manno , managing principal with Steelbridge Capital, tells GlobeSt.com. “But in the end, Steelbridge and our partners are ecstatic to add this landmark property to our Florida holdings.” Steelbridge Capital secure the 77% occupied office asset at a price that compares favorably to other deals in the Downtown submarket that traded within the past several years. The seller, SunTrust Banks, Inc., committed to long-term retail and office leases in both buildings as part of the deal. Steelbridge will implement a multimillion-dollar renovation plan to reposition the complex, which includes an adjoined 17-story tower and 3-story office annex, a parking garage, as well as several development parcels. Steelbridge plans to create a high-end boutique asset that offers some retail and creative office space on the 45,000-square-foot vacant parcel in early 2017. The office tower will see technology upgrades to improve efficiencies and aesthetic renovations to the lobby and common areas. “Our vision for the future of SunTrust Center goes beyond visual enhancements to include a transformation of the annex to include high-street retail to meet market demands,” says Jay Caplin , managing principal at Steelbridge . “With single digit vacancy for retail and office space on Las Olas Boulevard, SunTrust Center is well positioned to take advantage of an increasing rental rate environment while maintaining strong occupancy, particularly with the planned capital improvements.” Downtown Fort Lauderdale is one of the most stable markets in South Florida. That’s due to high supply constraints, minimal new supply since 2007, and consistent demand from the surrounding affluent communities. Downtown consistently at the top of the desirability list for large institutional and foreign investors . The Las Olas submarket, which has historically commanded the highest rents due a prominent address and prolific retail amenities, has an even higher occupancy of 93% as of the first quarter of 2016, according to Steelbridge’s research. “The short and long-term fundamentals of the region are highly compelling,” says Gavin Campbell , managing principal of Steelbridge which also owns Cypress Financial Center. Cypress Financial Center is a 200,000-square-foot class A office building the firm acquired in 2014. CBRE South Florida capital markets team of Christian Lee , Amy Julian , and José Lobón , arranged a $75.4 million loan on behalf of Steelbridge Capital through The Blackstone Group to finance the acquisition of SunTrust Center. Lincoln Harris represented SunTrust Banks, Inc.