One office landlord betting on the market’s upside is Boca Raton-based Omicrom Development, which recently landed a $99 million CMBS loan from Citi Real Estate Funding and Bank of America for a four-property mixed-use portfolio in suburban Boca Raton.
In addition to paying off prior debt, the new loan allowed an Omicrom-led group to acquire a majority stake in the portfolio, which has undergone $52.5 million worth of renovations and repositioning in recent years.
Documents associated with the securitization of the debt provide an inside look at the properties’ finances.
As of January, the 515,000-square-foot Boca Office Portfolio was 90 percent leased to about 150 office and retail tenants, with no single tenant accounting for more than 3.5 percent of the rentable area.
The four office complexes, which consist of about 20 office, medical and retail buildings in total, are all located within 10 minutes of each other along Powerline Road.
The portfolio includes the seven-building Fountains Center at 7000-7700 West Camino Real, the two-building Grove Centre at 21301 Powerline Road, the City National Bank Plaza complex at 7000 West Palmetto Park, and the lakeside Boardwalk at 18th at 6853-6909 Southwest 18th Street.
Within the portfolio, the landlord manages about 12,000 square feet of “executive suites” — small units leased on six-month and annual terms “mostly to sole practitioners in professional fields,” according to an S&P report.
The prior owners of the portfolio, a joint venture between Boston-based TJAC Development and Kireland Equity Investments, acquired the properties between 2012 and 2016 for a total of $78 million.
At the time of acquisitions, one of the properties was just 30 percent occupied and in receivership, “while the other properties suffered from minimal investment, low occupancy, and low quality tenancy,” according to S&P.
As part of the recent recapitalization, Bahamas-based investment manager Holdun Family Office also acquired a stake in the portfolio alongside Omicrom. Four Omicrom principals are named as guarantors for the CMBS loan.
The properties have weathered the pandemic quite well, and have remained open throughout the past year. According to S&P, about 50 tenants received one- to three-month rent deferrals in 2020, most of which was paid off by year’s end.