Miami Dolphins Owner Buys Downtown West Palm Beach Office Jewel for $282M
This likely is the biggest South Florida office transaction since the onset of the coronavirus pandemic.
The Related Cos., founded and led by Miami Dolphins owner Stephen Ross, bought downtown West Palm Beach waterfront office jewel Phillips Point for $282 million.
This likely is the biggest office transaction since the onset of the coronavirus pandemic and shows Ross is bullish on the market and downtown West Palm Beach, where he owns some of the most significant assets.
The Related affiliate 777 South Flagler Associates LLC bought Phillips Point from affiliate of Boston-based AEW Capital Management LP, CPT Phillips Point LLC, for $281.85 million, according to a Palm Beach County deed.
Phillips Point, developed in the 1980s, has 460,080 rentable square feet between two towers as well as a six-story parking garage to the west, altogether on a 4.2-acre property.
The 11-story West Tower includes six stories for a garage and mechanical equipment, while the East Tower, which is closest to the Intracoastal Waterway, is 13 stories.
The complex is at 777 S. Flagler Drive in the Central Business District.
The transaction breaks down to $613 per square foot.
The acquisition gives Ross and The Related another significant foothold in West Palm Beach where he embarked on reinventing CityPlace retail destination, rebranding it as Rosemary Square. The real estate firm also is revamping the public plazas and adding restaurants.
Next door, The Related is building 20-story 360 Rosemary, a 300,000-square-foot office tower to be finished this year. It’s near the downtown West Palm Beach for Brightline passenger trains, which have suspended service during the pandemic.
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Also later this year, The Related will start building 25-story One Flagler, a 270,000-square-foot office tower near the foot of the Royal Park Bridge connecting West Palm Beach and Palm Beach.
The Related focuses on all asset classes, from condominiums to offices across the U.S., including New York, where it’s developing the enormous mixed-use Hudson Yards complex across 28 acres.
Seller AEW, based in Boston, is one of the biggest real estate investment managers with roughly $80.9 million of assets under management, according to its website.
It bought Phillips Point in May 2015 for $245.5 million, county records show.
The pandemic has thrown into question the viability of the office market as millions of Americans continue working remotely and glitzy office high-rises in central business districts remain mostly empty. The rollout of the vaccine still has made some bullish.
For its part, South Florida is proving attractive to financial firms as multiple are either opening an office here or are relocating altogether.
Global investment behemoth Blackstone leased a 41,000-square-foot space at 2 MiamiCentral, the office building rising above downtown MiamiCentral Brightline station. This will be a more tech-focused office with plans to hire 200 employees.
The latest to bet on the Sunshine State are Elliott Management Corp., with talks that it will open at Phillips Point while keeping its New York headquarters, and Goldman Sachs Group Inc.
Phillips Point already has a strong tenant roster, including Big Law.
Holland & Knight moved its West Palm Beach office last year to the West Tower. Akerman, Gunster, Greenberg Traurig and Fox Rothschild also have a Phillips Point office.
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