Banyan Secures $20.9M for Purchase of Ft. Lauderdale Office Building
- Aug 22, 2012
Banyan Street Capital has secured financing for the $28.4 million acquisition of Tower 101, a 238,000-square-foot office tower in downtown Fort Lauderdale, Fla. Sabadell United Bank provided Banyan with a $20.9 million loan for its purchase of the property in a joint venture with PCCP L.L.C.
Carrying the address of 101 NE Third Avenue in Fort Lauderdale’s central business district, Tower 101 is of a unique design — consisting of two separate but connected buildings. The 11-year-old tower featuring 10 stories of office space atop a nine-level parking facility is linked to a 26-year-old, six-story structure. Banyan and PCCP purchased the note and secured fee title on Tower 101 via a deed-in-lieu of foreclosure transaction with the original borrower.
Lenders have certainly loosened their grip on credit, but they are hardly doling out real estate acquisition loans like candy, as they did five years ago. Scrutiny and caution are the order of the day and Banyan ticked all the boxes on Sabadell’s list.
“The sponsorship involved in the transaction, first and foremost,” was the key in the bank’s decision, Kevin Miliffe, an assistant vice president with Sabadell, told Commercial Property Executive. “Rudy [Touzet], the principal behind Banyan, is a very, very strong sponsor. He’s repositioned so many office assets, he knows how to run a building well, and he knows how to treat tenants right and find new tenants for a building.”
The property itself also buoyed Sabadell’s confidence in the deal.
“At its core it’s a great asset,” said Miliffe. “The smaller part of the building hadn’t been cared for; it hadn’t seen the dollars, the capital expenditures or TILC money in a while. So having new management come in there, put the money where it’s needed and get the building back up to being one of the premier buildings in the downtown Fort Lauderdale office market is going to be a very successful project for Banyan Street.
Banyan, which relied on commercial real estate services firm CBRE to broker the transaction, plans to capitalize on the value-add opportunity at Tower 101 through leasing activities. The property’s 19-story building is 80.3 percent occupied and the tenant roster at the smaller structure is only 12 percent full. In the second quarter, the average total office vacancy rate in Fort Lauderdale was 23.4 percent, as per a CBRE report, but Sabadell was not dissuaded by the lackluster numbers.
“We’ve actually seen a huge movement from suburban office markets to the core and that’s another reason the timing of this transaction was perfect from a risk perspective,” said Miliffe. “We’re seeing more and more tenants wanting to move back into the urban core and a lot of their employees are following, they’re moving back into the urban core into Fort Lauderdale.”