NYC-Based CRE Firm Expands In South Florida, Purchases Palm Beach Luxury Office Building For $720 PSF

NYC-headquartered Property Group Partners, formerly Louis Dreyfus Property Group, has expanded in South Florida through the addition of 324 Royal Palm Way, a 25,000-square-foot luxury office building in Palm Beach.
Cushman & Wakefield Director Mark Pateman and Associate Director Tara England represented the buyer in the transaction. Palm Beach-based Armata Holdings was the seller.
Also known as the U.S. Bank Building, 324 Royal Palm Way is a fully leased, multi-tenant office building centrally located on the renowned Bankers Row – a colloquial reference to the high density of financial institutions along this stretch of road. The three-story office building was built in 1960 and sits just blocks from the restaurants and shops of world famous Worth Avenue and South County Road. Its location also provides easy access to Interstate 95.
The building underwent a comprehensive exterior and interior renovation program in 2010. These renovations included a new common kitchen, new second-floor bathrooms, and updated elevator lobbies. The building also offers covered parking, surface parking, and an on-site ATM.
 

“This was a classic relationship transaction,” said Pateman, who along with England managed the building’s leasing for Armata prior to the sale. “While Armata was not actively shopping the deal, we knew they were willing and we were able to present an actionable offer.”

“We have a great relationship with the buyer,” added Pateman. “They are long-term holders and love supply constrained markets, so it was a perfect fit.”

The asset traded for $18 million, or $720 per square foot.  It last sold for $12,350,000 in October 2012, according to Palm Beach County records.
According to Cushman & Wakefield Research, the Palm Beach office market is indeed supply-constrained.
 

“The positive fundamentals for the Palm Beach office market are growing each quarter,” wrote Senior Research Analyst Lauren Pace in Cushman & Wakefield’s Q2 2015 Palm Beach County Office Marketbeat Report. “While quality available office space remains limited in the market, tenant demand remains high with product becoming scarce. Rents are trending higher due to an imbalance in supply and demand and landlords are taking advantage of limited supply in sought-after locations,” added Pace. “Cushman & Wakefield projects that by the end of 2015 robust leasing activity and investment sales will lead to solid rent growth and further declining vacancy.”

 

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