The Capstone Group has acquired 1700 Palm Beach Lakes, a 113,964-square-foot, Class A office building in West Palm Beach, Fla. Breakers Capital Partners sold the asset for $19.4 million. Capstone also secured an $18.4 million acquisition loan from Blue Vista Finance. Cushman & Wakefield assisted the seller in the deal and procured the financing for the buyer.
Located at 1700 Palm Beach Lakes Blvd., the office building is near the Interstate 95 interchange, roughly 8 miles northwest of downtown West Palm Beach. The location offers good connectivity to both metro Miami and the central business district. Palm Beach International Airport is 5 miles south of the property.
Developed in 1988, the 11-story office tower features floorplates with 14,092 square feet and structured parking with a parking ratio of 3 spaces per 1,000 square feet, per Yardi Matrix data. Breakers Capital recently invested almost $2 million in property upgrades. Improvements included a complete elevator modernization, complete lobby and garage restorations as well as a full-building generator replacement.
Future value-add opportunity
The property was 89.4 percent leased at the time of sale, with a tenant roster that includes the Internal Revenue Service, Valley National Bank, Uniters North America and Comcast Spotlight. The IRS lease will end in the third quarter of 2019. The government agency will vacate more than 32,000 square feet, dropping occupancy to 61.1 percent and creating a value-add opportunity for the new owner.
The Cushman & Wakefield Capital Markets team of Scott O’Donnell, Dominic Montazemi, Greg Miller, Miguel Alcivar and Michael Ciadella, along with Agency Leasing Specialist Anthony Librizzi, negotiated the deal on behalf of the seller. Jason Hochman of Cushman & Wakefield’s Equity, Debt & Structured Finance team secured the acquisition financing.
Earlier this month, the Class A, 294,000-square-foot office tower locally known as the “Darth Vader Building” changed hands. A joint venture purchased the West Palm Beach asset for almost $100 million.