Real Capital Solutions Pays $95M for Jacksonville HQ
The newly completed building serves as the headquarters for the city’s electric utility.
The JEA headquarters building in Jacksonville, Fla., newly developed at a cost of approximately $72 million, has come under new ownership. Ryan Cos., developer of the 153,000-square-foot tower, sold the asset to Real Capital Solutions in a transaction valued at just under $95 million, according to Duval County property records.
The office sector may not be the investment community’s darling right now, operating in the shadows of a robust industrial sector, but premier office assets still attract eager buyers. “We received considerable interest in the building and decided Real Capital Solutions would be a great partner for the JEA headquarters,” Doug Dieck, president of the Southeast Region with Ryan Cos, told Commercial Property Executive.
The JEA headquarters building stands at 225 Pearl St. in Jacksonville’s central business district and holds the distinction of being the first new-build office tower to sprout up in the city’s downtown core in nearly 10 years. Having acquired the 1.5-acre site for $2.6 million in 2019, Ryan commenced the development of the seven-story structure as a build-to-suit for the not-for-profit utility in 2020, relying on the assistance of $62.9 million in construction financing from Wells Fargo. The company topped out the building in April 2021.
JEA’s home has multiple workspaces that foster employee collaboration, outdoor spaces, approximately 10,000 square feet of activated ground-level retail space and an adjacent 657-space parking facility. The headquarters is also highly sustainable, having been built to qualify for LEED Gold certification.
State of the sector
The sale of the JEA headquarters building at roughly $620 per square foot speaks to the property’s quality and key location, as the average sale price for office assets in metropolitan Jacksonville in the third quarter was approximately $160 per square foot, according to a report by Colliers. Pricing guidance and expectations are at odds in Jacksonville—and elsewhere.
“The national office sector cycles just like all types of real estate. Real estate values are sensitive to interest rates, and we are in a rising interest rate environment,” Dieck noted. “Office properties with great amenities inside the building and in the adjacent surrounds will continue to attract great tenants. Since the COVID-19 pandemic, suburban office buildings have seen rising vacancy. Like most cycles, 2023 will be a case of the haves and have-nots when it comes to specific buildings.”
JEA plans to move into its new home at 225 Pearl St. in phases over the next few months. Ryan will retain a relationship with the building, having signed on to serve as property manager on behalf of the new ownership.