Is this the year of the office condominium?
Investors in Florida continue to gobble up the properties, which proliferated much to many of their owners’ later chagrin during the real estate boom. Many of the properties now changing hands are doing so at discounts and are being bought of out foreclosure.
Most recently, recent sales at Boca Raton’s Sanctuary Centre have brought the 180,442-square-foot business center’s available condo office space close to sell-out.
“As local market inventory steadily shrinks, we’ve found renewed interest in condo office space from professional firms and regional companies that want an east Boca Raton presence, without top-tier pricing,” said Commercial Florida Realty Services Managing Principal George Sacks. Closing five sales since December, with two additional sales under contract, has reduced available Sanctuary Centre condo office space to under 10,000 square feet.
Sanctuary Centre, located at North Federal Highway and Yamato Road, was built in the mid-1980s, and its previous owner later converted the complex to condominium. GS Sanctuary Financial Investors Principal George Sacks purchased the 80,000 square feet that remained unsold in 2007, shortly before the weak economy and zoning changes dramatically impacted Boca Raton’s office absorption trends.
“It’s been a wild ride,” Sacks said. “We knew we had a great asset in a prime location, and by staying agile, we’ve kept Sanctuary Centre successful. When the economy turned in 2008 – and as relaxed zoning shifted momentum away from Federal Highway to Boca’s northwest section — we converted the remaining space to a lease program,” he added. “Now, with resurgence of Federal Highway’s business corridor well underway, we’ve reverted back to a sales focused campaign.
“We’re seeing demand from buyers with stable office space needs, who recognize that timing is everything,” Sacks said. “They compare buying vs. leasing, and look to lock in space costs at today’s low interest rates, before area rents start climbing.” Availability of 90 percent SBA financing limits the up-front investment companies need to make. The Sanctuary Centre office suites range from 850 to 8,500 square feet.
Golden Key Properties LLC, a Port Charlotte company managed by Andreas Kirchberger, bought 34,000 square feet of office condo space at 2555 N. Toledo Blade Blvd. and 2580 Commerce Parkway in North Port for $1.15 million. The buildings previously belonged to North Port Park of Commerce LC, a Naples company managed by Donald Arnold. Arnold’s company erected the complex in 2006 and 2007 and lost a $7.8 million foreclosure judgment in June 2012.
For Kirchberger, it was was his second distressed property purchase of the month. Earlier in April, he laid out $825,000 to buy a 24,000-square-foot office condo complex at 31 Chailett Road in Rotonda. That property previously belonged to Doug and Marsha Needham, who bought the land for $225,000 in April 2004 and built the condos two years later.
Other recent deals:
A 5,000-square-foot office condominium at 1499 E. Venice Ave. in Venice was bought by Pacifico Enterprises Inc. for $350,000. The seller was Twin Tower Trading Realty LLC. That company bought the entire five-building complex in July 2012 for $1.1 million. This is the second individual building sold from the complex.
A Sarasota company bought four office condominium buildings on Fruitville Road from three different owners for $920,000. Brink Avenue Invest LLC, a company managed by Andrew L. Lazin, bought the properties at 2989 Fruitville Road with a $732,000 loan from Regions Bank, records show. Two of the buildings, totaling 5,676 square feet, were sold out of foreclosure by Fifth Third Bank, which foreclosed on the previous owner — a subsidiary of the Suncoast Center of Independent Living — in January 2012. Suncoast paid $550,000 for the buildings in August 2003, records show. Brink Avenue bought the third building, from IME Developments Inc., a Sarasota company managed by David and Maureen Nash, for $145,000. IME Developments paid $394,100 for the 826-square-foot space in November 2006. The Sarasota company bought the fourth building, measuring 856 square feet, from Shao Xi Chen for $275,000. Chen paid 260,000 in January 2008.
SLS Holdings IV LLC, a Sarasota company managed by Sam M. Sciturro, bought 26 office condo units in the Mediterranean Professional Park off Tamiami Trail in Osprey out of foreclosure from First America Bank for $3.2 million. SLS financed the purchase with a $2.2 million loan from the same bank.
The office condos at 674 S. Tamiami Trail total 31,500 square feet and were built in 2009 by Osprey Business Park LLC, a Sarasota company managed by David and Devon Shepherd. Osprey Business Park paid $2.995 million for the land in July 2006 and borrowed $3.5 million that it defaulted on in January 2012.