Flagler Sells Jax Office for $130M

MIAMI—An eight-building office portfolio has traded hands in Jacksonville for $130 million. CBRE closed the sale and secured $84.5 million in financing on the 1 million-square foot office portfolio.

CBRE represented Flagler, the seller of Deerwood North and Deerwood South. CBRE also arranged financing for the buyer, PKY Deerwood, LLC, an affiliate of Parkway Properties, Inc.

“Deerwood North and South provided the opportunity to achieve critical mass in the Deerwood submarket with a stable rent roll and quality tenancy,” says Christian Lee, vice chairman and lead CBRE broker on this transaction. Deerwood North and Deerwood South consist of eight office buildings developed from 1996 to 2005.

Current occupancy at the office portfolio is more than 90%. Major tenants include JP Morgan Chase, Fidelity, Comcast, Adecco, Main Street America, Fortegra, Carolina Casualty, and Arizona Chemical.

“Deerwood is one of the tightest submarkets in the state and is expected to see strong rent growth, says Michael Harrell, a senior vice president in CBRE's Jacksonville market expert. CBRE also sourced and arranged for the $84.5 million acquisition financing with a fixed interest rate of 3.9% for a 10-year term.

“The rate and terms are exemplary which demonstrated both the quality of the asset and its position in the market as well as the acumen of a highly skilled sponsor who moved swiftly through the lender and buyer due diligence to lock up a historically low rate without hesitation,” says Charles Foschini, a vice chairman at CBRE.

CBRE's Miami Institutional Group members Lee, Foschini, Christopher Apone, and Amy Julian, with regional support from vice chairman Will Yowell and Harrell, collaborated to market the asset for sale and negotiate the transaction on behalf of the seller.