Black Lion Investment Group just bought the Crystal Tree Retail/Office Center, a mixed-use property in North Palm Beach, for $14 million.
Chesser Group, a real estate conglomerate based in Rancho Cucamonga, California, is the seller. Crystal Tree is a four-story commercial complex with ground floor retail and office space, totaling 116,625 rentable square feet. The deal breaks down to about $120 per foot.
This is Black Lion’s second property purchase in South Florida, following the private equity firm’s $10 million buyout of the restaurant space at Brickell’s Four Ambassadors condominium in January.
Colliers International’s Ivo Tsinev brokered the deal, which almost fell apart when Hurricane Matthew came barreling toward South Florida and put North Palm Beach directly in its impact zone. Ultimately, Tsinev told The Real Deal, Crystal Tree suffered little to no damage, leaving no concern over whether Chesser or Black Lion would have to pick up a repair tab.
Black Lion’s strategy is to pick up commercial properties in upper-class neighborhoods with upside potential, Tsinev said. For Crystal Tree, located at 1201 U.S. Highway 1, Black Lion found it an attractive purchase because North Palm Beach has plenty of luxury condos, but not a lot of retail space.
Tsinev said the 1980’s-era shopping complex had also been passed up by national tenants in recent years because it hadn’t been well maintained.
“When I first started dealing with the property [in January 2015,] it was known by the locals as a dinosaur, he said.
Black Lion now plans to significantly renovate the complex, raise rents and bring in new tenants.
Data from the CoStar Group shows the complex is 89 percent leased, leaving some room to bring in more tenants. Stats on asking rents were not available. Its largest tenant is the Patio Shoppe of Coral Springs & the Palm Beaches, an outdoor furniture retailer that occupies 9,003 square feet.
Crystal Tree was last purchased in 2005 by Chesser for $16 million, or roughly $137 per rentable foot. The commercial center’s latest trade came at a significantly cheaper price per square foot than Martin and Irving Osher’s $19 million purchase of a similarly sized retail complex in North Palm Beach, which equated to $190 per rentable foot.
The deal was financed with a $10.22 million loan from the First National Bank of South Miami, according to county records.