New York Life Pays $72M for Florida Office Building

WEST PALM BEACH GARDENS, FL—New York Life Insurance Co has acquired the Class A Financial Center at the Gardens office complex here from KBS for $71.8 million.

KBS of Newport Beach, CA, acquired the 10-story 188,950-square-foot office property in 2015 in a joint venture with a sovereign partner.

“Targeting growing cities, such as Palm Beach Gardens is an explicit part of our investment strategy,” says Allen Aldridge, SVP for KBS and asset manager of the property. “Palm Beach Gardens has proven to be a developing market with positive real estate dynamics which has made it easy to keep the building nearly 100 percent leased.”

During the first quarter, the overall vacancy rate for office space in Palm Beach County remained near historic lows at 13.3%, down 81-basis-points year-over-year, according to Cushman and Wakefield’s first quarter 2019 Palm Beach County Report. Overall absorption exceeded 78,000 square feet in the first quarter of 2019, the highest first quarter absorption recorded in nearly five years.

Located along the PGA Boulevard micro-market, the Financial Center at the Gardens is within walking distance to the 1.4 million -square-foot Gardens Mall and is adjacent to Downtown at the Gardens lifestyle center.

The property offers access to Interstate 95 and the Florida Turnpike. Over the past few years, KBS spent more than $1 million to renovate the property including a main lobby renovation with a new lounge and wine bar, as well as upgrades to the café, restrooms, corridors and elevators.

Mike Davis, Dominic Montazemi, Rick Brugge and Scott O’Donnell of Cushman & Wakefield represented KBS in the transaction.

“Investor interest in this uniquely positioned premier asset was robust,” says Davis, vice chairman for Cushman & Wakefield who led the sales team.

“KBS is extremely deliberate in implementing our real estate strategies and selling assets at an opportune time,” notes Marc DeLuca, regional president, Eastern United States for KBS. “As demand rises in these secondary and tertiary markets, we continue to attract a highly competitive field of potential buyers and secure pricing levels that deliver strong overall returns, in excess of our underwriting, for our investors.”

The sale comes on the heels of KBS’s disposition of an 11-asset office portfolio for $1.2 billion earlier this month.

The 11-property portfolio includes Tower I at Emeryville in Emeryville, CA; 222 Main in Salt Lake City, UT; Village Center Station in Greenwood Village, CO; Village Center Station II in Greenwood Village, CO; 101 South Hanley in St. Louis, MI; Tower on Lake Carolyn in Irving, TX; Promenade I & II at Eilan in San Antonio, TX; CrossPoint at Valley Forge in Wayne, PA; One Washingtonian Center in Gaithersburg, MD; Reston Square in Reston, VA and171 17th Street in Atlanta.