The Real Deal Miami

Delray industrial park returned to lender in deed-in-lieu

By Alexander Britell | September 09, 2011 04:56PM

Plaza One Realty has taken the Congress Park Business Center industrial complex in Delray Beach in a $16.4 million deed-in-lieu of foreclosure, according to Palm Beach County Circuit Court records.

The value of the note was $16.4 million, said attorney Richard Sollner, who prepared the deed.

Plaza One is a subsidiary of State Farm.

The 208,596-square-foot building is located at 420 Congress Avenue in Delray Beach, which has been looking to attract investors to the area as part of an initiative by Mike Malone, the president and CEO of the Greater Delray Beach Chamber of Commerce.

RREEF is a subsidiary of Deutsche Bank, based in Maryland.

Plaza One Realty’s Michael Smith could not be reached for comment, and Deutsche Bank’s corporate office did not reply to a request for comment.

The property was purchased by RREEF in 2006 for $13.2 million, and has a current appraised value of $9.6 million, according to the Palm Beach County Property Appraiser’s office.

CB Richard Ellis is currently marketing leases at the property, which is about half-full. The property is part of the so-called South Palm Beach County sector, which is performing a bit better than its northern counterpart, according to Jeff Kelly, a senior vice president at CB Richard Ellis.

“Overall, the vacancies in south Palm Beach County are in the 10 to 12 percent range, which isn’t out of hand; we just haven’t seen a lot of larger deals,” said Kelly. “This particular building we have, it does not subdivide well to accommodate smaller users — you’ve got to find somebody for about 40,000 to 50,000 square feet to fill the vacancy. We have people looking, which is a positive sign.”

The average price for Palm Beach County industrial properties is around $102 per square foot, according to data from LoopNet.

Generally, Delray’s commercial sector has shown improvement, according to broker Cecelia Boone of Southdale Properties.

“Delray, when everybody else is hemorrhaging, just gets a nosebleed,” she said. “It’s such a hot market; [the city] is trying to be more flexible with how they’re attracting commercial users.”