On Thursday, CRE-sources reported the $208 million trade of 350/450 East Las Olas, the largest transaction in a decade… until Friday.
On Friday, Lone Star Funds announced that an affiliate of Lone Star Real Estate Fund VII, L.P., along with an affiliate of Highline Real Estate Capital LLC and Square2 Capital LLC, has acquired 401 East Las Olas Boulevard, marking the most significant office acquisition in Broward County in the past decade.
CBRE’s Institutional Office Group, led by Vice Chairman Christian Lee and Vice President Sean Kelly, represented the seller, a global investment manager. CBRE’s Debt & Structured Finance Group, led by Vice Chairmen Tom Traynor and Tom Rugg, Senior Vice President Amy Julian, and First Vice President Andrew Chilgren, represented the buyer in sourcing acquisition financing. The CBRE team also included Director Adam Spengler, Senior Associate Tom Rappa, Associate Henry Fenmore, and Financial Analyst Matthew Lee.
“Office properties in Fort Lauderdale’s CBD have thrived in the 2020’s, with strong absorption, sharp rent growth and declining vacancies. This is particularly true for top tier assets, which have outperformed because of an escalating flight to quality,” said Lee.
“With soaring construction costs and a dearth of remaining development sites in the Las Olas corridor, future supply will be tightly constrained and will result in continued strong rent growth for the area,” added Kelly.
The transaction closed February 13. While the terms were not disclosed, sources close to the deal reported the sale price to be in the neighborhood of $220 million, equating to more than $535 per square foot.
The 23-story, 410,561-square-foot Class AA office and retail tower—also known as Bank of America Plaza at Las Olas City Centre—sits on a full city block in the heart of Fort Lauderdale’s Las Olas Financial District. The property is home to a premier tenant roster, including Bank of America, Greenberg Traurig, Boies Schiller Flexner, Motorola Solutions, and UBS.
“We see a unique opportunity to invest in high-quality office assets that are among the best in their competitive set,” said Jérôme Foulon, Global Head of Commercial Real Estate at Lone Star. “The South Florida office market has strong underlying fundamentals, driven in part by in-migration trends and return-to-work mandates. At the same time, since new developments have all but stopped in recent years, some markets are experiencing shortages of office space in quality assets.”
“This acquisition represents our confidence in high-quality, well-located office assets that continue to demonstrate strong leasing fundamentals,” said David Moret, President of Highline Real Estate Capital. “401 has maintained an average occupancy of 94 percent since its inception and is positioned to continue to benefit from the evolving office market.”
Jay Caplin, Principal at Square2 Capital, added “with our previous repositioning success at 501 & 515 Las Olas Boulevard, we are confident we can amplify 401’s position as one of the most sought-after office towers in the state. Planned improvements will build upon 401’s status as the most amenitized office property in downtown Fort Lauderdale, featuring six on-site restaurants, a fitness center, and full-service banking.” Square2 Capital will manage the property for the new owner under the direction of Principal Mike Manno.
