Steelbridge Capital, a value focused real estate investor, completed the acquisition of SunTrust Center, an institutional quality two-building Class A office complex spanning 270,000 square feet at 501 and 515 East Las Olas Boulevard in Ft. Lauderdale, for $90 million.
This transaction is the largest office building to trade in Broward County’s Downtown submarket in the past 12 months, according to a release.
Prominently located at the crossroads of the Central Business District and the mile-long stretch of commerce along Ft. Lauderdale’s famed Las Olas Boulevard, SunTrust Center is a rare asset to come to market, and as such, was hotly contested by prominent local and national investors. Despite the competition, Steelbridge Capital was able to secure the 77 percent occupied asset at a price that compares favorably to other deals in the Downtown submarket that have traded within the past several years. As part of the transaction, the seller, SunTrust Banks, Inc., committed to long-term retail and office leases in both buildings.
“Iconic is a term that is often thrown around, however, in this case, we could not be more pleased to have this truly iconic asset under our ownership,” said Mike Manno, Managing Principal at Steelbridge Capital. “We are pleased to partner with SunTrust Bank, our lead tenant and an established financial brand within the Southeast, to elevate this asset to compete at the highest level within the Downtown submarket.”
Steelbridge Capital will implement a comprehensive multimillion-dollar renovation plan to reposition the complex, which encompasses an entire city block and includes an adjoined 17-story tower and 3-story office annex, a parking garage, as well as several development parcels. Plans for the annex, of which its 45,000 square feet will be largely vacant in early 2017, include creating a unique high-end boutique asset that offers some of the most prominent and visible retail and creative office space on Las Olas Boulevard. Furthermore, the office tower will undergo technology upgrades to improve efficiencies and aesthetic renovations to the lobby and select 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,” said Jay Caplin, Managing Principal at Steelbridge Capital. “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.”
The acquisition of SunTrust Center comes less than 90 days since the firm closed on 500 Davis Street, a 126,000 square foot office property located in the prominent Chicago suburb of Evanston, and brings Steelbridge Capital’s properties under ownership and management to 1.8 million square feet.
“We are delighted to make our second investment in the Ft. Lauderdale market,” said Gavin Campbell, Managing Principal of Steelbridge Capital, which also owns Cypress Financial Center, a 200,000 square foot Class A office building the firm acquired in 2014. “The short and long-term fundamentals of the region are highly compelling.”
One of the most stable markets in South Florida due to high supply constraints, minimal new supply since 2007, and consistent demand from the surrounding affluent communities, the Downtown Ft. Lauderdale submarket consistently ranks at the top of the desirability list for large institutional and foreign investors. Even more, 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 percent as of Q1 2016.
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 the seller, SunTrust Banks, Inc.
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