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Fort Lauderdale Office Tower Fetches $108.5M

1 East Broward in Middle of Downtown Revitalization (Update)
October 2, 2018

A prominent office tower in downtown Fort Lauderdale, Florida changed hands late Wednesday, and the new owner says the asset stands to benefit from the city’s transformation to an emerging destination for young professionals and employers.

A group that includes institutional investor PCCP LLC and the NAI/Merin Hunter Codman brokerage in West Palm Beach, Florida bought 1 E. Broward Blvd. for $108.5 million, or about $308 per square foot. The sale closed at more than double its previous sale price of $42 million in an August 2011 distress sale.

“Our plan is to hold on to it for seven or 10 years, and we think it will go up [in value] with the rising Fort Lauderdale renaissance,” Neil Merin, chairman of Merin Hunter Codman, told CoStar News.

In recent years, Fort Lauderdale officials have approved thousands of apartments, condominiums, shops and restaurants in the downtown corridor in an effort to attract millennials and make the area a “24-hour city.”

Many downtowns across the country are undergoing similar conversions, decades after department stores fled the urban core for shopping malls on large land tracts near freeways.

As downtowns become more popular places to live, many employers are eager to set up operations there. KEMET Corp., a technology manufacturer, moved its U.S. headquarters into 64,000 square feet at 1 E. Broward Blvd. this year.

The 19-story tower is the closest office building to the new Brightline commuter train service’s Fort Lauderdale station, making it an ideal location for tenants attracting employees who live in neighboring counties, brokers say.

“It’s certainly going to be a marketing tool for that property,” said Peter Reed, principal at Commercial Florida Realty Services in Boca Raton. “You can literally pull people from the tri-county now. And you can get to your customers more easily.”

The seller is Montvale, New Jersey-based Ivy Realty Services LLC, which bought the 351,705-square-foot building seven years ago from One Broward Blvd Holdings LLC, a multi-member tenant-in-common (TIC) investor, according to CoStar data. At the time the asset was just 52 percent leased.

See CoStar COMPS #2186129.
Aside from KEMET Corp., the largest tenants in the building today are two law firms: Becker & Poliakoff and Quintairos Prieto Wood & Boyer.

During its ownership, Ivy has spent millions on renovations and raised rents from $15 per square foot to nearly $27 or $28, brokers said.

Christian Lee and Jose Lobon of CBRE brokered the deal. CBRE also arranged $77.4 million in financing with SunTrust Bank for future upgrades.

NAI/Merin Hunter Codman will manage and lease the property.

Editor's Note: The sale has now closed. This news story was updated to include additional commentary on the deal from Merin.

Paul Owers, South Florida Market Reporter  CoStar Group   
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