GE Sells Half-Empty Office Portfolio

PALM BEACH, FL—An office portfolio with six single-story medical and professional buildings in West Palm Beach, FL has traded hands. General Electric Credit Equities sold the assets to Grover & Corlew for $8.825 million.

CBRE arranged the sale and financing of Metrocentre Corporate Park at 2500-2581 and 2440-2478 Metrocentre Boulevard. CBRE marketed the property on behalf of the seller and arranged a $7 million non-recourse bridge loan from a mortgage REIT in excess of 75% of cost at a low interest rate, for the buyer.

“Located in a meticulously groomed business campus, this 55%-occupied property presented investors with a value-add opportunity to own a critical mass of strategically located, high-quality, single-story office product below replacement cost,” says Scott O'Donnell, senior vice president of CBRE Investment Properties. O'Donnell, Jason Hochman, Dominic Montazemi, and Miguel Alcivar of CBRE Investment Properties worked on the deal.

“From 2003 to 2006, prior to the recession, the property had an average year-end occupancy rate of 95.7%,” O'Donnell says. “With recent gains in housing prices and employment, the economy is positioned to further improve and there is a tremendous value-add opportunity to lease up the vacant suites and benefit from the impressive market rental growth projected by economists.”

The office portfolio spans 105,159 square feet in a master-planned corporate park setting in central Palm Beach County. It is located immediately west of an Interstate 95 interchange, with frontage and visibility along heavily traveled 45th Street.

“The lender we chose worked closely with our client to maneuver the intricacies of this transaction and close on time,” says Hochman of CBRE's Debt & Structured Finance group. “They had underwritten the property while it was marketed and were prepared to move quickly when selected as a lender for the acquisition. Proceeds were provided for the acquisition with future funding for leasing and improvement costs.”