Harbor Group Buys Highwoods' Office Park for $22M

ORLANDO-Harbor Group International of Norfolk, VA has picked up its sixth major acquisition of the year in the purchase of the five-building, 95%-leased, 315,515-sf Oakridge Office Park within the 4,000-acre Orlando Central Park enclave at Oakridge Road and Rio Grande Avenue in south Orlando.

The Virginia investor, through its Oakridge Financial Associates LLC affiliate, paid Raleigh, NC-based Highwood Properties Inc. $22.18 million or about $70.28 per sf for the 21.7-acre property anchored by AT&T in a seven-story, 186,275-sf building.

Other Oakridge Park tenants are Florida Southern University, Stenotype Institute of Jacksonville, FL, and Broadwing Inc. The five buildings were constructed between 1966 and 1983.

“The acquisition of Oakridge Office Park is a key component of our strategy,” HGI chairman Jordan E. Slone says in a prepared statement. “It is a prominent office park, primarily occupied by AT&T on a long-term lease.”

The average quoted rent is $8.50 triple net. “In reviewing the competitive market, it’s important to note that Oakridge leases space for $8.50 psf on a net basis, so operating expenses have to be considered to provide a better comparison to the area’s quoted gross lease rates,” Sidney Bridge, Harbor Group’s marketing and E-commerce manager tells GlobeSt.com.

Bridge says that “with tenants paying their own cleaning, utilities and maintenance, we estimate the comparable rate at $14.60 psf, which is directly competitive with the five comparable buildings in the market.”

The Harbor Group executive puts the existing Orlando office market at 28.8 million sf, “with the majority being comprised of suburban products, which represents 78% of all office space.” Bridge says the direct vacancy rate of Orlando office space in the second quarter was 14.9%.

HGI’s purchase of Oakridge Office Park was part of a 1031 tax-deferred exchange. The proceeds from the October sale of Royal Oaks Shopping Center in Brandon, FL were reinvested in the new property.

The acquisition brings Harbor Group’s investment total for the year to $200 million. The company’s portfolio comprises 800,000 sf of office and 2,000 multifamily units valued at $800 million in 15 states and three countries. Harbor owns office parks in Boca Raton, FL; Nashville, TN; Columbia, SC; Norfolk, VA; and El Paso, TX.