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(This story, in slightly different form, originally appeared in Incisive Media’s Daily Business Review.)

BOCA RATON, FL-In a sign of the economic times, a Boca Raton office building has been sold for $20 million, or $213 per square foot, after the buyer assumed the mortgage. The 94,000-square-foot Compson Financial Center changed hands when buyer 980 North Federal Acquisition Group took over an $18.7-million note from Bank of America at 5.28% interest, a low rate compared to what’s currently offered.

Seller 980 North Federal LLC, whose principal is Stuart Gilbert of New York, paid $26.5 million for the property in 2006. In addition to access to financing, the buyer got an added benefit: The loan is interest-only for its first three years. Amortization didn’t begin until the fourth year of the loan, shortly before the new owners acquired the four-story building at 980 N. Federal Highway.

“So we have six and a half years left on the loan at that interest rate,” says Alan Gross, president of Gross Mortgage Finance in Davie. Gross and partner Mark Osheroff of the Osheroff Group in North Miami are managing members of 980 North Federal.

“The whole deal was driven by assumable financing being in place,” adds Scott O’Donnell, senior vice president with CB Richard Ellis in Miami, who marketed the property. “And this is a [securitized] loan. You can’t get this type of financing right now.”

Compson Financial Center was built in 1987 and is 88% occupied. The buyers expect 42% of the class B building’s tenants to leave this year. “Many tenants have already indicated an intent to vacate or aren’t paying their full rent,” O’Donnell says. “We had to find a buyer who was able to accept that.”

Gross isn’t concerned about the upcoming defections: “We have 37 tenants and most leases are for three to five years, so we’re always going to have a 20 percent rollover per year,” he says.

He hopes to cut operating expenses 5% to 10% within two years. The building’s triple-net lease rate of almost $20 per square foot triple net is expected to remain at that level, Gross says.

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