Tag Archive for: david duckworth

Plantation Medical Office Park Trades

/in , /by

Avison Young’s Florida Capital Markets Group completed the $15,450,000 sale of Plantation Medical Office Park, a six-building, single-story medical office campus totaling 63,319 square feet at 6710-6834 West Sunrise Blvd. in South Florida’s Plantation submarket.

The $244-per-square-foot transaction underscores the attractiveness of medical office assets as overall office sale activity has slowed.

Avison Young Principals John K. Crotty, CCIM; David Duckworth; Michael T. Fay, who is also Managing Director of the firm’s Miami operations; and Brian C. de la Fé sold the asset on behalf of PPP Capital, LLC. The buyer was Bezrat H., Corp.

“Located in one of Broward County’s most desirable office submarkets, Plantation Medical Office Park is 98% occupied with a rent roll composed entirely of medical tenants, many of which have been there for decades and have expanded their operations and occupied additional space,” said Crotty. “The buyer will benefit from stable, long-term cash flow as the asset appreciates and the option to fulfill the property’s significant value-add potential through developing a vacant pad previously approved for a two-story 22,000-square-foot medical building.”

Plantation Medical Office Park is in a densely populated, major commerce and medical hub with over 200,000+ residents, 7,000+ businesses, and $2.3 billion in total consumer spending within a five-mile radius. With exceptional visibility from Sunrise Boulevard, the Park is strategically located just three miles from Westside Regional Medical Center, a full-service 250-bed hospital. Notable tenants include American Access Care, Dickens Sanomi Academy, and Baptist Hospital of Miami, Inc.

“Medical office is currently one of the most desirable property types among investors due to the stability of in-person doctor-patient care solidifying tenant need for physical space,” said Duckworth. “Marketing the attractiveness of medical office and the ideal location of this asset, in particular, allowed us to secure strong pricing despite market uncertainties in the financial markets.”

Avison Young insights show the latest banking crisis has led to more economic headwinds for investors, rendering it difficult to secure financing for commercial real estate transactions, particularly within the office sector. However, the greater need for physical space and high costs associated with relocations and build-outs among medical office tenants abate the concerns of investors and financiers alike and make medical assets the exception during challenging times.

 

Some South Florida Suburban Offices Will Be Redeveloped

/in , /by

South Florida’s office market will continue outperform most parts of the nation, but some buildings will fail or be redeveloped, a commercial real estate advisor said.

David Duckworth, a principal of Avison Young‘s Fort Lauderdale office, said while there are predictions of nationwide commercial mortgage backed security defaults in the office sector, quality office buildings in South Florida continue to attract companies. At least for now.

“The news is worse than the reality at the moment,” Duckworth said. “People are … anticipating that things will get pretty bad, but down here it is not that bad yet. Vacancies are in the mid-teens in the tri-county area. That’s not great. But it’s not run-for-your life terrible either.”

Duckworth said new-to-market and local businesses are still seeking office space with amenities that will encourage employees to return to work. This “flight to quality,” Duckworth said, will create a two-pronged office market.

On one side are the Class A office buildings, particularly in urban centers and downtown areas, which “will be just fine.”

On the other are suburban Class B and Class C offices that were often used as operation call centers. “Those places will be in a lot of trouble,” Duckworth said.

Lenders, though, are reluctant to back any sort of office product of any class or of any locations. “They’re lumping all office into one bad bucket,” he said.

“There are still buyers of office product, but debt is very expensive and challenging,” Duckworth said. “People who have purchased or refinanced … are having a hard time when debt comes due, and their debt will be 100 or 200 basis points higher than when they received the debt. They might have to add additional capital to refinance.”

Nationally, office transactions plummeted 58.6% in the first quarter of 2023. According to recent market reports from Avison Young, investors are buying less office product in Broward and Palm Beach counties.

In Broward, office sales volume fell 56.6% year-over-year to $107.8 million. The price per square foot also fell 6.63% from last year to $205.05 per square foot.

In Palm Beach County, office transactions totaled $100 million in the first quarter, a decline of 25.7% from the last quarter and a drop of 78.5% from last year. Price per square foot for office product fell 17.55% from last year to $230.88 per square foot.

But in Miami-Dade County, the $147.2 million in office transactions in Q1 2023 was 10.5% higher than the end of last year, Avison Young stated. Office product also sold at an average of $365.03 per square foot, a 16.34% increase from last year. However, in the second and third quarters of 2022, office product traded at rates above $270 per square foot, according to graphs from Avison Young. In short, Miami-Dade saw the first drop in price since the Federal Reserve started raising interest rates.

Still, many of the office products acquired will be repurposed for other uses, Duckworth said.

In other cases, developers will add residential and retail to an office product to make it more valuable. For example, WRC Properties plan to add up to 800 apartment units to the 250-acre Waterford Business Park in western Miami-Dade. And Pebb Enterprises and BH Group want to add residential to the 29-acre Office Depot (Nasdaq: ODP) they recently acquired for $104 million.

“It is a trend we will see more and more of, office buildings excess parking areas for other uses,” Duckworth said.

Suburban areas, such as Cypress Creek in Fort Lauderdale, also will see office product demolished and replaced with residential uses, he added.

As time goes on, Duckworth said there will be “some foreclosures” of office buildings by landlords unable to finance or sell their products. But it won’t be anywhere near as rough as it was in the economic downturn of 2008 and 2009.

“I don’t see that much doom and gloom, but six months from now that may look different, but that doesn’t feel that way right now,” he said.

 

Source:  SFBJ

 

Two-Building Boynton Beach Office Portfolio Sells

/in , /by

Avison Young’s Florida Capital Markets Group negotiated the sales of two office buildings totaling 55,000 square feet in Boynton Beach. The assets sold in two separate transactions on behalf of the seller for a combined price of $9,150,000.

Representing the seller, TP Ten LLC, Avison Young Principals David Duckworth; John K. Crotty, CCIM; Michael T. Fay, who is also Managing Director of the firm’s Miami operations; Gary Gottlieb, SIOR, RPA; Vice President Brian C. de la Fé; and Associate Berkley Bloodworth completed the transactions.

  • Congress Executive Center at 1301 N. Congress Avenue, a four-story, 40,226-square-foot professional and medical office building, sold for $6.3 million to Triple Double Investments, LLC, managed by Andrew Greenbaum.
  • Boynton Beach Promenade at 1101 N. Congress Avenue, a two-story, 15,302-square-foot office building, sold for $2.85 million to Siloam Holding Company managed by Dr. Gherghina.

Adjacent to the soon-to-be-redeveloped Boynton Beach Mall, the properties boast abundant parking, high walkability, and prominent visibility and access from Congress Avenue. The class B buildings were 50% occupied at the time of sale, and each buyer has associated businesses with plans to absorb significant portions of the vacancy.

“The demand for office properties is strengthening along with optimism regarding the COVID-19 vaccine, allowing more people to return to work safely,” said Duckworth. “Selling the assets along the highly-trafficked North Congress Avenue in two separate transactions allowed the seller to maximize the pricing.”

According to Avison Young research, first quarter 2021 posted Boynton Beach’s total office vacancy rate at 13.1%, which has remained steady throughout the pandemic. Leasing activity in 2021 is on track to outpace the previous year.

 

Weston Office Building Changes Hands

/in /by

Avison Young’s Florida Capital Markets Group closed the $8.3 million sale of the 33,720-rentable-square-foot landmark office building, Weston Commerce Center, at 1625 N Commerce Parkway in Weston.

The asset was the second of the seller’s 100% occupied, two-building portfolio to sell within three months, both sales totaling $17.2 million.

The seller, HRE/SEFIRA Weston Office, LLC, a joint venture between Highline Real Estate Capital and Sefira Capital, acquired the portfolio in 2017 for $13 million. Fox Ridge Capital, LLC was the buyer in the transaction.

On behalf of the seller, the Weston Commerce Center sale was completed by Avison Young Principals David Duckworth; John K. Crotty, CCIM; Michael T. Fay, who is also Managing Director of the firm’s Miami operations; Vice President Brian C. de la Fé; and Associates Emily Brais and Berkley Bloodworth. The team also facilitated the sale of the portfolio’s other building, a J.P. Morgan Chase Bank-anchored building at 1040 Weston Road, for $8.9 million in December 2020.

“Weston Commerce Center maintained its 100% occupancy rate during the pandemic, which is a testament to the strength of the asset and the market and what attracted strong investor interest,” said Duckworth. “Our client, with the support of the Avison Young leasing team, worked diligently to increase the portfolio’s value and led to a notable return on investment following the sales.”

At the time of the HRE/SEFIRA acquisition in 2017, the properties were 82% occupied. Over the course of three years, the ownership partners increased occupancy to 100% and grew the portfolio’s net operating income by nearly 45%.

“When we acquired the portfolio, we recognized the strength of the Weston submarket and saw the opportunity to drive occupancy and rental rates through the completion of aesthetic improvements and proactive asset management,” said David Moret, President of Highline Real Estate Capital. With the assistance of Avison Young’s leasing team including Principal Greg Martin and Senior Associate Lisa Blumer, the buildings reached full occupancy well ahead of schedule, and we were able to substantially increase rental rates, which ultimately led to two successful sales during a pandemic after a hold period of less than four years.”

 

Class A Office Portfolio In Fort Lauderdale Hits The Market

/in /by

Avison Young’s Florida Capital Markets Group has been exclusively tapped on behalf of a fund managed by DRA Advisors LLC to sell Pinnacle Corporate Park, a two-building, class A office portfolio at 500 and 550 W. Cypress Creek Road in Fort Lauderdale.

The asset totals 259,458 square feet on 14.31 acres in Broward County’s Cypress Creek submarket.

Avison Young Principals John K. Crotty, CCIM; David Duckworth; Michael T. Fay, who is also Managing Director of the firm’s Miami operations; Greg Martin, and George Vail will lead the sale. The transaction team also includes Avison Young Vice President Brian C. de la Fé and Associates Berkley Bloodworth and Emily Brais.

Over the past 24 months, the Avison Young leasing team led by Martin completed 17 lease transactions totaling 91,000 square feet

“Pinnacle Corporate Park is the most desirable property in the Cypress Creek submarket due to its strong occupancy, rental rate growth, and immediate potential for lease-up,” said Crotty. “In addition to the existing value, the offering provides the opportunity to maximize land on the site in the coming years through residential development.”

Pinnacle Corporate Park coming to market represents the trend of large funds and institutional owners’ confidence to sell large office assets again, as sales declined immediately following the pandemic. The deal would be similar to the recent $78.42 million Plantation Crossroads three-building portfolio sale.

“We are seeing an uptick in demand for investors looking to deploy capital in well-located South Florida office assets,” said Duckworth. “Pinnacle Corporate Park is ideally situated near major expressways, transit, and amenities, and provides the perfect opportunity.”

Pinnacle Corporate Park is positioned in the heart of Fort Lauderdale’s Uptown Urban Village, a master plan that supports the development of a thriving, transit-supportive, mixed-use neighborhood. Its offices are less than a mile from Interstate 95 and directly accessible from the Cypress Creek Tri-Rail station.

 

Plantation Office Building Fetches $13.85 Million

/in , /by

Avison Young’s Florida Capital Markets Group completed the $13.85 million ($173 per square foot) sale of the 80,000-square-foot Bank of America office building at 1776 N. Pine Island Road in Plantation.

The building last sold for $10,900,000 in December 2012.

On behalf of Transatlantic Investment Management Inc., Avison Young Principals David Duckworth, John K. Crotty, CCIM, and Michael T. Fay, facilitated the disposition to the Kislak Organization, a privately held firm based in Miami. The sale represents the fifth transaction the team completed in Plantation to date in 2018 totaling more than $66 million.

“Plantation continues to see low office vacancy rates, high absorption, and impressive rent growth, solidifying it as one of the most desirous suburban submarkets in Broward County for tenants and investors,” said Duckworth. “The property was a value-add opportunity despite its high occupancy due to the below-market, in-place rents.”

For the acquisition, Kislak also engaged the Florida Capital Markets Group to secure a $12.05 million loan.

“We were pleased to work with Avison Young on the acquisition and financing of this well-located, multi-tenant office building,” said Tom Bartelmo, president and CEO of the Kislak Organization. “This investment is a great fit for our strategy of acquiring high-quality commercial real estate in top South Florida submarkets. We like the property’s strong current income and opportunity for enhancements that will draw additional professional office tenants.”

At 80 percent loan-to-value, the loan was negotiated by Avison Young Principal George Vail and financed through Popular Bank for a 10-year term with a 2-year interest-only period, after which it will transition to a 25-year amortization schedule. The interest rate was 4.6 percent.

“Due to the property, location, and the buyer’s well-regarded reputation, we created a competitive environment to get the best loan terms for Kislak,” said Vail. “After receiving multiple term sheets, we locked in a favorable loan with a rare 80 percent loan-to-value ratio, as lenders typically max out at 70 to 75 percent.”

According to research by Avison Young, Plantation is one of the tightest office submarkets in Broward County. As of third quarter 2018, the submarket saw no new construction, one of the lowest vacancy rates which posted at 7.23 percent, and the highest total net absorption level in the county with 78,350 square feet absorbed.

 

Source:  CRE-sources