13450 W. Sunrise Blvd. (Melanie Bell)
Orlando-based CNL Commercial Real Estate Inc. is so confident in Broward County’s rebounding market that it plunked down more than $45 million for an asset on the outskirts of Sunrise’s office district.
CNL in a joint venture with Boston-based Long Wharf Real Estate Partners LLC paid $45.2 million for its first Broward acquisition. The Sawgrass Lake Center is a six-story office complex at 13450 W. Sunrise Blvd.
“In general Broward County is coming back pretty strongly,” said JLL senior vice president Jonathan Kingsley, who specializes in South Florida office space.
The office center has an average triple-net asking lease rate of $18.50 per square foot, according to CBRE data published March 19. Operating expenses are around $11.07 per square foot, according to marketing information. Major tenants include AT&T and JP Morgan.
The 240,000-square-foot mixed-used complex includes offices, bank, a convenience store, fitness center and restaurants on 6.9 acres across from the Sawgrass Mills mall southeast of Northwest 136th Avenue and Sunrise Boulevard.
Persistent rumors about AT&T’s shrinking presence in Sunrise sprouted speculation about Sawgrass Lake Center’s leasing outlook and the overall prospects of the Sunrise-Weston office market. The center’s vacancy rate was 22 percent, according to information CNL released Wednesday.
CNL Financial might be banking on the complex’s position within walking distance of American Express’ recent acquisition adjacent to Sawgrass Lake Center.
In a $21.5 million deal with Flagler Development Group, American Express bought a 40-acre Sunrise site in December with plans to develop a major corporate complex.
“This could be a good thing in terms of the of the Sawgrass Lake site,” Kingsley said. “That factor would certainly be a business driver. It would be a positive for the owner of the Sawgrass Lake Center because companies that do business with American Express would want to relocate to be as close as possible to American Express.”
For a provider of premium office space, the influx of new businesses would represent a spike in demand and leasing rates in a market where brokers say tenant confidence is increasingly on the rise with companies extending their leases.
“Sawgrass Lake is in a great location and has strong value-add upside and is well-positioned for future absorption,” said Pryse Elam, CNL Commercial Real Estate’s president of development and investments. “We’re very pleased with this acquisition and look forward to expanding our portfolio across the Southeast.”
CNL Commercial and Long Wharf, a private equity real estate manager, are targeting additional investments in office, industrial and retail across the southeastern United States.