BOCA RATON, FL—As Palm Beach County's office market starts gaining more traction, 595 Financial Center has traded hands. Pinnacle Holdings acquired the office portfolio for $33 million.

Avison Young principal Keith O'Donnell and associate Jonathan Senn represented Pinnacle in fulfilling a 1031 Exchange requirement. Charles Shane, president of Bryason Realty, represented the seller.

“Due to the time constraints of investment requirements, 1031 buyers typically prefer off-market transactions in order to avoid the auction bid process,” says O'Donnell. “With a strong corporate tenancy anchored by Morgan Stanley and top-tier building amenities, 595 Financial Center is one of the premier office buildings in Boca Raton, and represents an excellent long-term investment for our client.”

The two-building class A office portfolio spans 116,000 square feet. It sits at 555 & 595 South Federal Highway in Boca Raton, FL in the heart of Boca Raton's business district. It's also near shops, dining, Mizner park and several new residential projects and overlooks the Boca Raton Resort and Golf Course.

“Property performance and investment activity in South Florida's office sector is heating up across the board,” says Senn. “In the Downtown Boca Raton submarket, rents have increased over 6% in the last 12 months and Pinnacle's timing could not be better to take advantage of this upswing.”

Indeed, the economic rebound of the last three years has validated the attractiveness South Florida has for domestic and international investors. Nearly all real estate sectors have stabilized and prospered, setting the stage for investors to take money that was sitting on the sidelines and bet on profitable assets in the area.

Brad Capas, president of CapasGroup, tells GlobeSt.com the performance and fundamentals are also strong a little further north in Palm Beach County. He points to the three true class A buildings in Downtown West Palm Beach are now 95% occupied so new tenants seeking large blocks of class A space are being turned away. 

“If a new building were available, sufficient demand exists to secure at least one or two new market entrants with sizable office space requirements,” Capas says. “Additional preleasing activity would be driven by tenants relocating locally from other older class A and B buildings as several hundred thousand square feet of existing office leases in around the urban core are scheduled to expire during the next five years.”