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AEW sells West Palm office tower for $42M to Dallas investment manager and CREC

AEW sells West Palm office tower for $42M to Dallas investment manager and CREC

One Clearlake Centre, with 18 stories, is 47 percent leased

AEW Capital Management just sold a Class A office tower in West Palm Beach to a joint venture between a Dallas-based private equity real estate manager and CREC for $42.3 million, The Real Deal has learned.

Velocis and CREC acquired the 218,500-square-foot, One Clearlake Centre “at a significant discount to replacement cost,” Mike Lewis, principal of the Texas firm, said in a press release. The buyers financed the sale with a floating rate, five-year $34.84 million mortgage from Mesa West Capital, a debt fund with offices in Los Angeles and New York.

The 18-story building, at 250 South Australian Avenue, is only 47 percent leased. The property includes a five-story, 662-space parking garage. It traded for nearly $195 per square foot.

“The vacancy is really attributable not to market factors, but rather the prior ownership’s investment strategy … The prior landlord had a philosophy to not break up spaces,” Carol Brooks, president and co-founder of CREC, told TRD. “There are 7 full floors that have not been multi-tenanted. It creates a really extraordinary opportunity for us. There’s not a lot of product out there with these outsized opportunistic returns.”

The joint venture plans to start a multimillion-dollar capital improvement program to update the building, which was built in 1986. The new owners will also create a modern tenant lounge and conference center and spec office suites. CREC will handle leasing and management.

Current rents are in the low $30s per square foot, gross, said Andrew Remick, CREC vice president of acquisitions. The firm aims to push rents up about $5 per square foot. Class A trophy buildings that are more than 95 percent leased sign deals between $60 per square foot and $70 per square foot, he said.

Current tenants include Rosenbaum Mollengarden PLLC, BB&T, Keyes, Prudential, Robert Half International and Northwestern Mutual.

A majority of the leasing in downtown West Palm is by smaller tenants, CBRE’s José Lobón said.

Lobón and Chris Lee represented the seller, and Amy Julian arranged the financing. CBRE began marketing the property without an asking price a little more than three months ago. Lobón said the value-add opportunity brought in “a plethora of offers.”

Property records show AEW affiliate One Clearlake Centre LLC paid $38.6 million for the building in 2005. It’s fronts the Clear Lake on the west side of the city’s central business district. The glass office tower is also near All Aboard Florida’s Brightline station and the Tri-Rail station.

Velocis, created in 2011, owns 24 properties in Texas, Colorado, Georgia, Florida, Arizona, Virginia and North Carolina.

AEW manages investments primarily on behalf of institutional and private investors with about $64 billion worth of assets around the world, including properties in South Florida, according to its website.

CREC, Lubert Adler sell Coral Springs shopping center for $48M to Zurich Insurance asset manager

CREC, Lubert Adler sell Coral Springs shopping center for $48M to Zurich Insurance asset manager

Sellers raised occupancy of Royal University Plaza from 45% to 98%

By Katherine Kallergis

June 2, 2017

Royal University Plaza, Warren Weiser, Andrew Remick and Alan Esquenazi

A joint venture between CREC and Lubert Adler Real Estate Funds just sold a shopping center in Coral Springs for $48 million, nearly double what the venture paid in 2015.

Property records show CPAC Royal University sold the Royal University Plaza at 2556 North University Drive to New York-based Zurich Alternative Asset Management, a subsidiary of Zurich Insurance Group.

The CREC-Lubert Adler joint venture bought the 10-acre property in February 2015 for $26 million with plans to renovate and lease the then 100,000-square-foot shopping center. It was 45 percent leased when it last sold, and is now 98 percent leased.

CREC and Lubert Adler also expanded Royal University Plaza for Orchard Supply, which has about 37,000 square feet, and brought in Total Wine & More to lease about 25,000 square feet.

The 115,000-square-foot center just sold for more than $415 per square foot. Other tenants include Pet Supermarket, Jimmy John’s and Brooklyn Water Bagel Co.

Asking rents are in the low $30s per square foot. “We pushed rents, but we really did was push occupancy and now we have a waiting list of tenants,” Warren Weiser, CREC chairman and partner, said. Weiser, CREC partner Alan Esquenazi and vice president Andrew Remick said the commercial real estate firm is looking to acquire more value-add properties like Royal University Plaza.

While the deal was off-market, Weiser said the firms were eventually planning on selling the shopping center.

Esquenazi and Sabrina Meerbott, director of retail leasing, handled leasing. Renovations included painting, landscaping, new lighting, adding an access turn lane and other facelift-type upgrades.

The $48 million sale is the second largest for a shopping center in Broward County so far this year, a spokesperson for CREC said. In February, InvenTrust Properties Corp. paid about $163 million for two shopping centers in Pembroke Pines, Paraiso Parc and Westfork Plaza, both on Pines Boulevard.

The asset manager arm of Zurich Insurance Group targets commercial real estate markets like Boston, New York, Los Angeles and Miami, according to its website. The asset manager’s real estate portfolio includes more than 20 million square feet of space in more than 200 properties.

Pollo Tropical spreads its wings to new HQ near Miami airport

Pollo Tropical spreads its wings to new HQ near Miami airport

Fast-casual chicken restaurant group reduced its footprint from 17,000 sf to 10,000 sf
March 03, 2017 12:45PM
By Katherine Kallergis

Pollo Tropical office (Credit: Gigi Alvarez) Inset: CREC’s Carol Brooks and Glenn Rozansky, vice president of real estate for Pollo Tropical

After nearly 20 years spent in fragmented office space in Dadeland and a test kitchen in Doral, Pollo Tropical has moved into a newly built-out space near Miami International Airport. 

Pollo Tropical, a subsidiary of Fiesta Restaurant Group, is leasing a 10,000-square-foot building at 7255 Corporate Center Drive, Carol Brooks told The Real Deal. Brooks, president and co-founder of CREC, represented Pollo Tropical in the lease along with senior leasing associate Katie Fernandez-Espinosa. Diana Parker, CBRE senior vice president, represented the Landing at MIA.

The new regional headquarters for Pollo Tropical includes an open floor plan of offices and conference space surrounding a roughly 1,100-square-foot test kitchen. The company went from leasing about 17,000 square feet on noncontiguous floors in an older building in the Dadeland area, plus a test kitchen in Doral, to a smaller and centralized space.

“They had grown over decades into a space that was no longer efficient and it didn’t accommodate their culture. They wanted to consolidate offices, their training facility and test kitchen under one roof with ease of access, abundant onsite parking and onsite amenities,” Brooks told TRD. “Those requirements – the parking and test kitchen – were inherently limited and that pushed us geographically.”

The building is within the Landing at MIA office park, which recently underwent a $17 million renovation, according to a press release. Records show SPUS7 Miami ACC Land LP owns the 50-acre complex. The limited partnership, which is controlled by CBRE Global Investors principal Claudia Walraven, paid $129.25 million for the office community in 2014.

Brooks declined to provide terms of the lease, including rents, but said that in general rents are lower in the Dadeland submarket, and that it’s difficult to compare rent within the airport submarket because of the kitchen and training facilities.

The popular fast-casual chicken restaurant chain added skylights to the building as part of the extensive build-out. Gigi Alvarez of G. Alvarez Studio designed the new headquarters.

“It’s so cool. We really talked a lot about culture; food is what they do, so the kitchen now is exposed to the central work area. Everybody has a view,” she said.

Swiss insurer makes landfall in Coral Gables with $58M investment pay

Swiss insurer makes landfall in Coral Gables with $58M investment play

Sellers more than doubled their money after 10 years of holding the property

June 06, 2016 03:45PM
By Sean Stewart-Muniz

2121 Ponce De Leon Boulevard

It looks like there’s still plenty of foreign investment to go around for Miami’s office market.

Zurich North America, an affiliate of a major Swiss insurance company, just closed on its $57.5 million purchase of the 2121 Ponce office tower in Coral Gables.

The deal was announced Monday by real estate companies Greenstreet Partners and CREC, which formed a joint-venture back in 2005 to buy the 13-story office building for $27.1 million.

Through the years, Greenstreet and CREC started renovating the common areas for 2121 Ponce, which was built in 1970. The companies brought the building up to 95 percent occupancy with an eclectic mix of tenants like the Consulate General of Barbados, Fox Latin America and Valley National Bank. CREC itself even took space in the building, and plans to stay even under the new ownership.

After roughly a decade of holding the property, Warren Weiser, chairman of CREC, told The Real Deal that the partners decided it was a good time to sell amidst a tightening office market.

“The asset performed pretty darn well even through the recession,” Weiser said. “It’s a very good market for both buyers and sellers right now.”

Weiser said the partners had an established relationship with Zurich, which keeps a U.S. office in New York. After touching base in February, the two parties “shook hands” in March and closed the deal last week.

“[Zurich] knows this market,” Weiser told TRD. “They made a very smart purchase because you can’t reproduce this building for the price they paid.”

The most recent sale of 2121 Ponce, which measures 164,848 square feet, breaks down to nearly $349 per foot. That’s more than double the $164 per foot that CRED and Greenstreet paid in 2005.

One explanation for that price explosion can be found in the latest market numbers from brokerage JLL. Although net absorption in Coral Gables was down by a fraction of a percentage point during the first quarter, there was no new office space under construction in the city at that time. Giralda Place has since broken ground with 58,000 square feet of offices. Meanwhile, office vacancies stood at 10.6 percent and rents were asking an average of $38.18 per square foot annually, according to JLL.

The deal was brokered by CREC’s Weiser, Harry Blyden and Andrew Remick, along with CBRE’s Christian Lee, Jose Lobon and Andrew Chilgren. On Zurich’s side, the firm was advised by its “alternative investment management” division. The Swiss insurance carrier has roughly 55,000 employees worldwide, and its North America division specializes in property-casualty coverage, according to its website.

It’s not unusual for insurance giants like Zurich to diversify into real estate: among U.S. firms, Prudential Financial boasts a thriving real estate arm that’s also bought into the Coral Gables office market.

Bulk Condos in Sunrise sell for $17M

Nearly 40 percent of a condominium complex in Sunrise sold for $17.13 million, CREC announced on Monday. The 141 units sold for an average of $121,450 or nearly $140 per square foot.

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Regency Manor apartments near MIA sell for $17.5M

A low-rise apartment complex just south of Miami International Airport has traded hands for $17.5 million or $118,000 per unit, Miami-Dade County records show.

A company tied to RAIT Financial Trust, a real estate investment trust based in Philadelphia, sold the 148-unit multifamily property in unincoporated Miami-Dade. CFO and treasurer James L. Sebra signed the deed transfer of ownership. Regency Manor Residences LLC is the buyer.

The 4.2-acre site, at 1102 Northwest 43rd Avenue, is near the Dolphin Expressway. It was built in 1969, according to county property records. The complex has seven buildings and a community pool. It includes 26 one-bedroom, one-bathroom apartments and 122 two-bedroom, one-bathroom apartments.

CREC Senior Vice President Peter Mekras represented the seller and worked with CREC’s Multifamily Transaction Analyst Chris Bate on the sale.

“The sale of Regency Manor speaks to the market’s vast demand for stable cash flow generated from apartments. Miami’s vibrant economy will allow for continued rent growth as development sites remain scarce,” Mekras said in a press release. “Apartment communities of scale in South Florida are primarily being acquired by institutions who recognize the discount to replacement cost and sustainable cash flow yield benefits for owning multifamily in a growing and high barrier to entry market like Miami.”

The buyer also obtained a $10.5 million mortgage from Banco Popular North America, records show. John Sismanoglou and Anthony Roussos are listed on the buyer’s corporate records.

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