Supporting growing confidence in market recovery, 9600 West Sample Road, was purchased by Bank Street Realty at an 11.98% rate of capitalization based on the current net operating income (NOI). Additionally, the purchase included the assumption of $1.75 million in existing debt with just five years left to maturity and a very small balloon at the end of the amortization period. This translates into almost all of the annual debt service reducing principal balance, not interest, further increasing the buyer’s returns. The high capitalization rate is justified by the high occupancy, short term nature of the tenants and increasing operational efficiency.
“The high yield on NOI and the ability to increase operational efficiency through active management made this an irresistible investment,” said Marty Busekrus who represented Bank Street Realty in the purchase. “This was a rare opportunity.”
The BB&T Building was traded in an off-market transaction. At the time of closing, occupancy was at 91%.
“These types of buildings comprise many smaller tenants with short-term leases. Frequent roll-over is normal,” said Busekrus. “Rental rates were nearly five dollars below market in some cases. Projected rents and improved operational expenses will be the factors driving returns for the buyer.”
Busekrus, a sales professional with CB Richard Ellis, was joined by Scott O’Donnell and Dominic Montazemi in negotiating the sales transaction on behalf of the buyer. John Rapp represented the seller, Andy Sneider.
The BB&T Building is a 35,504-square-foot, 5 story, Class B office property built in 1974. The property is less than a half a mile west of the Sample Road-University Drive intersection, in the Northwest Broward/Coral Springs submarket.
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