SouthPark Center, a nearly 1.3 million-square-foot leading suburban office park in Orlando, has come under new ownership, courtesy of a $315 million deal that marks the largest office transaction in Central Florida’s history.
Cushman & Wakefield represented the seller, AEW Capital Management, and arranged $233 million in acquisition financing on behalf of the buyer, PPF Real Estate, the Prague-based property subsidiary of Amsterdam-based international investment company PPF Group.
“The property received good interest from a variety of capital sources,” Rick Colon, director with Cushman & Wakefield, told Commercial Property Executive.
Spanning 162 acres near Orlando International Airport and the Orange County Convention Center in the Tourist Corridor submarket, SouthPark encompasses 10 Class A buildings and 31 acres of developable land. AEW had owned the asset since 2014, when it acquired the campus—which then consisted of 1.5 million square feet and 13 buildings—from Florida East Coast Industries for approximately $274 million.
Presently, the campus, boasting a history of robust absorption that did not fail through the pandemic, counts the likes of Booking.com, Accenture, Lockheed Martin, CVS Caremark, Diamond Resorts, Jet Blue and Marriott among its tenants.
SouthPark has managed to maintain its sheen and occupancy through strong institutional ownership and amenity upgrades. “SouthPark is uniquely positioned as one of the most successful business parks in the Southeast and has outperformed the broader Orlando market as a whole, particularly post-pandemic where rents have continued to grow, and new vacancies have quickly been leased,” noted Colon.
Sunny forecast in the Sunshine State
Orlando’s office market continues to recover from the consequences of the pandemic; however, the positive indicators make for a bright outlook. At the close of the third quarter, office leasing demand totaled approximately 1.5 million square feet year-to-date, nearing 90 percent of the level of activity at the same period in 2019, according to a report by Cushman & Wakefield. Additionally, overall asking rents climbed 3.1 percent year-over-year to a historic high of $25.19 per square foot. In the Tourist Corridor, average asking rents skyrocketed 9.1 percent to $29.30 per square foot.
Colon added, “Despite the impact of COVID-19, fundamentals are expected to continue to improve as population and job growth, specifically office dependent jobs, outperform national trends due to Florida’s broad-based appeal.”