Financial Center at the Gardens was purchased for $71.8 million by New York Life Insurance Company, one of the largest life insurers in the world. KBS originally purchased the property in 2015 in a joint venture with a sovereign partner.
Located along the PGA Boulevard micro-market, Financial Center at the Gardens is within walking distance to the 1.4 million sf Gardens Mall and is adjacent to Downtown at the Gardens, a lifestyle center that includes numerous restaurants, retail, entertainment venues, country clubs and golf courses, providing an excellent walkable amenity base for tenants. Financial Center at the Gardens offers easy access to Interstate 95 and the Florida Turnpike. Tenants will also have easy access to Orlando with the pending Tri-Rail station which will sit near the Florida East Coast tracks at PGA Boulevard. Over the past few years, KBS spent more than $1 million to renovate the property including a main lobby renovation with a new lounge and wine bar as well as upgrades to the café, restrooms, corridors and elevators.
“Targeting growing cities, such as Palm Beach Gardens is an explicit part of our investment strategy,” said Allen Aldridge, senior vice president for KBS and asset manager of the property. “Palm Beach Gardens has proven to be a developing market with positive real estate dynamics which has made it easy to keep the building nearly 100 percent leased.”
During the first quarter, the overall vacancy rate for office space in Palm Beach County remained near historic lows at 13.3 percent, down 81-basis-points year-over-year, according to Cushman and Wakefield’s Q1 2019 Palm Beach County Report. Overall absorption exceeded 78,000 sf in Q1 2019, the highest Q1 absorption recorded in nearly 5 years.
Palm Beach Gardens is the largest municipality in North Palm Beach County and the center of commerce and population density. Home to the Benjamin School, one of the country’s elite private schools which attracts many wealthy executives and high-profile families, alumnae include Tiger Woods and Jack Nicklaus.
“KBS is extremely deliberate in implementing our real estate strategies and selling assets at an opportune time,” added Marc DeLuca, regional president, Eastern United States for KBS. “As demand rises in these secondary and tertiary markets, we continue to attract a highly competitive field of potential buyers and secure pricing levels that deliver strong overall returns, in excess of our underwriting, for our investors.”
“Investor interest in this uniquely positioned premier asset was robust,” said Mike Davis, vice chairman for Cushman & Wakefield who led the sales team. Mike Davis, Dominic Montazemi, Rick Brugge and Scott O’Donnell of Cushman & Wakefield represented KBS in the transaction.