A $200 million mortgage for a luxury apartment complex led a ranking of the biggest loans to close in Palm Beach County in the third quarter of this year, according to The Real Deal’s analysis of county records.
Only one office property made the cut – the Golden Bear Plaza in Palm Beach Gardens. The majority of the biggest mortgages were for multifamily properties, both under construction and newly acquired.
“We’re in the late stage of the current real estate cycle, so we have to be a little bit more careful,” said Ruben Pedron, senior vice president and Florida market manager for commercial real estate at SunTrust Bank. SunTrust, which has worked on retail and office deals, is still financing construction loans and mortgages for value-add properties but is looking to finance more stabilized properties at this stage in the cycle.
This year, the county has seen a few value-add deals, especially in the retail and office sectors. The seventh largest loan to close in the third quarter was the $62.3 million sale of Golden Bear Plaza, which was financed with a $44.3 million mortgage from Värde.
Mutifamily and industrial have been the strongest asset classes this year, said David Wigoda, senior vice president at CBRE Capital Markets. He expects that to continue into next year.
While fewer hotels have traded, Wigoda said “non-essential retail is probably the weakest” sector of the commercial real estate market in Palm Beach County. “Secondary centers that don’t have much of a draw for shoppers are going to continue to suffer,” he said, excluding grocery store-anchored properties.
Here are the top 10 loans to close in the third quarter:
#1 Monogram Residential Trust closed on a $200 million loan in September for the Mark at Cityscape, a 208-unit building at 9 Plaza Real South in Boca Raton. Walker & Dunlop is the lender. Property records show Monogram, which announced it was being acquired by Greystar Growth and Income Fund this summer, paid nearly $82 million for the property in 2015, the year it was built.
#2 In August, Bainbridge Companies paid $102.5 million for a multifamily property in Delray Beach and financed the purchase with a $66 million mortgage from New York Community Bank. Bainbridge paid about $210,000 per unit at Delray Verana, 1495 Spring Harbor Drive.
#3 Bridge Investment Group took out a $55 million mortgage for a property it acquired in Lantana in September. The real estate investment and property management firm paid $77.2 million for the Carlisle Palm Beach, a luxury senior living community at 450 East Ocean Drive in Lantana. Wells Fargo is the lender.
#4 North American Development Group secured a $53.4 million construction loan for Alton Town Center, a retail project in Palm Beach Gardens. PNC Bank is the lender.
#5 In August, the Related Group scored a $52.8 million mortgage for Town Southern Apartments, a rental development at 10823 Acme Road in Royal Palm Beach. JP Morgan is the lender. The Miami-based developer is building a garden-style, 392-unit apartment project on the 29-acre site.
#6 Northland Investment Corp. financed the purchase of a Jupiter apartment complex in August with a $46.4 million loan from CBRE Capital Markets. Northland paid $56 million for the Mallards Cove and Shell Trace Apartments at 6705 Mallards Cove Road.
#7 An office deal made the top 10 list with a $44.3 million mortgage for Golden Bear Plaza in Palm Beach Gardens. Pennsylvania firm Alliance Partners HSP paid $62.3 million for the three-tower office park at 11760 U.S. Highway 1 in July. Värde, a Minneapolis-based debt fund, provided the financing.
#8 Also in July, Castle Lanterra Properties picked up the 259-unit Loftin Place apartment complex in West Palm Beach, and financed the acquisition with a $43.7 million mortgage from Berkeley Point Capital.
#9 The Related Companies closed on a $43 million loan for the convention center hotel property it owns at 600 Okeechobee Boulevard in West Palm Beach. Related said earlier this year that it was considering a second, 200-room hotel on an adjacent lot. Related spent roughly $110 million on the 12-story, 400-room hotel. Israeli lender Bank Hapoalim is provided the mortgage in July.
#10 DRA Advisors financed the purchase of a shopping center in Boynton Beach, marking the 10th biggest loan to be recorded in the county during the third quarter. DRA paid $47.3 million for the Fountains of Boynton Beach in September. PGIM Real Estate US Debt Fund REIT provided the nearly $39 million mortgage.
Harunobu Coryne contributed reporting.