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Capstone buys office building in West Palm Beach for $19M

Capstone paid $170 psf for the building
By Keith Larsen | July 31, 2019 01:30PM

1700 Palm Beach Lakes Boulevard, and from left, Scott O'Donnell, Mike Ciadella, Dominic Montazemi, Gregory Miller and Miguel Alcivar (Credit: Google Maps)

1700 Palm Beach Lakes Boulevard, and from left, Scott O’Donnell, Mike Ciadella, Dominic Montazemi, Gregory Miller and Miguel Alcivar (Credit: Google Maps)

Capstone bought an 11-story office building in West Palm Beach for $19.35 million amid heightened demand for Class A office properties in the city.

Hackensack, New Jersey-based Capstone bought the 113,964-square-foot building at 1700 Palm Beach Lakes Boulevard for $170 per square foot, according to a release from Cushman & Wakefield. Miami-based Breakers Capital, which is managed by Miami real estate attorney Jason Haim, sold the property.

Cushman & Wakefield’s Scott O’Donnell, Dominic Montazemi, Greg Miller, Miguel Alcivar and Michael Ciadella represented the seller in the transaction.

The building was developed in 1988 and sits on a 1.24-acre site. The office building last sold for $18.5 million in 2012, records show.

The property was 89.4 percent occupied at the time of the sale. Tenants include the Internal Revenue Service, Valley National Bank, Uniters North America and Comcast Spotlight. But the IRS will soon be vacating about 32,000 square feet of office space in the third quarter of 2019, pushing occupancy down to 61.1 percent, according to the release.

Capstone secured an $18.4 million loan from Blue Vista Finance to buy the property.

The sale comes amid heavy demand and a limited supply of Class A office space in West Palm Beach.

This month, Crocker Partners and Greenfield Partners sold the Northbridge Centre at 515 North Flagler Drive in downtown West Palm Beach for $98 million to Chicago-based Vanderbilt Office Properties and New York-based C-III Capital Partners.

In August, the West Palm Beach City Commission approved the controversial Okeechobee Business District, allowing Related Companies’ 25-story Class A office building to go forward.

Capstone owns and manages over 3.5 million square feet of office and retail properties in New Jersey, New York and Ohio, according to its website.