The sale "represents the most aggressive cap rate we have witnessed on a stabilized asset with little-to-no upside on the short- to mid-term hold period," says Scott O'Donnell, first VP in the Boca Raton office of CB Richard Ellis. He and Dominic F. Montazemi, an associate with CBRE's private client group in that office, brokered the transaction.
O'Donnell tells GlobeSt.com the cap rate was 7%. "The thing about this deal is that there are a number of fixed-rate leases in the building, so increased income is more limited than at many properties, and the cap rate will climb more slowly. Investor demand for well-located, high-quality office-warehouse assets in the $5-million range is very strong," he adds, "and exaggerated by 1031 situations." This was a 1031 exchange transaction. "Because this is a flex property, the rental rates vary, from $7 per sf to $12 per sf," O'Donnell says.
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