Clean Class B Trade Shows Diverse Investor Interest

FORT LAUDERDALE, FL—In a deal that traded under the radar screen, the Arbour Building fetched $1.33 million. CBRE classifies the trade as an example of a changing trend in the asset category of actively trading properties.

Located at 440 East Sample Road in Pompano Beach, Marty Busekrus, a senior associate with CBRE, tells GlobeSt.com the sale is different than most of the deals he’s done in the past 24 months. Most of the sales have been either core Class A or distressed assets. The Arbour Building, a stabilized class B office building, lies between these two opposite ends of the spectrum for investment sales.

“We are marketing several assets that are not distressed,” Busekrus says.  “We are starting to see more deals come to market where somebody bought at the bottom a couple of years ago and now they’ve repositioned the property and are trying to recapture the value. I think we are going to see more of that in the next four or five years as these buildings get filled back up.”

Built in 1980, the 26,197-square-foot, two-story suburban property traded at an 11.3% capitalization rate. CBRE represented the buyer, Coral Gables-based KAS Partners in the acquisition. The seller, Andy Sneider, was represented by John Rapp of Rapp Realty. The property was 90% occupied at the time of closing.

“The price point is typical of the latest trends in the market with stabilized class B buildings trading above a 10% cap rate,” says Busekrus. “With respect to this particular sale, the buyer saw a property that had historically performed well, with rents at or slightly below market. These conditions should allow for a steady increase in income as the market returns.”

Busekrus is part of CBRE’s Private Capital Group in the Palm Beach County office. CBRE vice presidents Scott O’Donnell and Dominic Montazemi, along with associate Miguel Alcivar, worked with Busekrus on the sale.