Jose Lobon, Christian Lee and Amy Julian, with CBRE.
Jose Lobon, Christian Lee and Amy Julian, with CBRE. ()

When Colonnade Properties set its eyes on one of the largest business parks in West Palm Beach, the New York real estate company had separate plans for the east and west sides of the complex.

Colonnade purchased the nine office buildings that make up Centrepark East and West on 41 acres west of Interstate 95 and northeast of Palm Beach International Airport along with affiliates of Grace Development and Flagler Realty & Development.

The office park was built from 1988 to 2004 and range in variety from a Class A, 10-story tower to three low-rise and five single-story buildings.

Colonnade acquired the complex for $72 million with plans to hold onto the buildings on the east side of the park and sell the ones on the west side.

“The challenge was arranging two different lenders,” said Christian Lee, vice chairman of CBRE Inc.’s capital markets team in Miami. “One with fixed-rate, long-term debt and the other with the ability to sell the buildings off and pay the loan off early without major penalties.”

Lee represented the seller with CBRE’s Jose Lobon, Amy Julian and Marcos Minaya. The Miami team also arranged financing for the buyer.

The group secured a $36 million loan from Miami-based Rialto for the five buildings east of Australian Avenue. The 10-year, fixed-rate debt accommodated Colonnade’s long-term hold plans.

The second loan was provided by NXT Capital, a commercial finance company based in Chicago. Lee arranged an $18.5 million short-term, floating rate loan for the four buildings on the west side of the complex.

“The fact that the property was purchased with two separate loans is extremely unique,” Lee said. “You have to have a lot of things come together at the same time. It’s not easy.”

CBRE was tapped by JPMorgan Chase & Co. to market Centrepark last spring. The property garnered tremendous interest. The CBRE team reached out to a diverse group of potential buyers, including off-shore investors, insurance companies, pension funds, REITs and opportunity funds, among others.

“We really marketed to all investor types,” Lee said. “This is what we do. We have a very deep database of potential buyers from different pools. We really exposed the property to the full market.”

NAI/Merin Hunter Codman Inc., which handles leasing for the complex, helped the marketing efforts by touring the property with potential buyers, said firm chairman Neil Merin.

“We thought that the joint venture of marketing the property between NAI and CBRE worked tremendously well,” Merin said. “We have talked about doing that with other properties in the past and may do so again in the future.”

While 2015 was a strong year for South Florida real estate, 2016 was even better for Palm Beach County, he said. Transaction volume countywide hit $2.7 billion in the first nine months of 2016, a 12.5 percent increase from the same period in 2015, according to CoStar Realty Information Inc.

It was no surprise to Merin that the property drew in multiple bidders.

Colonnade was identified as the buyer six weeks into the marketing process, Lee said. Centrepark traded in a deal that closed Oct. 31.

The properties offer 479,145 square feet of office space, which is 82 percent occupied by 64 tenants, according to CBRE.

Lee said the asset offers great value-add opportunity for the buyer. About 86,000 square feet of space is available for lease, and rental rates are expected to grow 27 percent over the next five years.

“All nine buildings are in excellent physical condition, the property is strategically located and offers a competitive parking ratio of 4.3 per 1,000 — these factors combined will allow Centrepark to continue to attract new tenants,” Lee said.

Lee and his colleagues run a nine-person team at CBRE that advises the nation’s largest real estate investors. He has closed more than $14.5 billion in transactions during his 20-year career.

Lee guided the team that worked on the Centrepark transaction with Julian spearheading the financing and Lobon leading the sale efforts.