Princeton International Properties dropped $90 million for a Coral Gables building, marking the second office building sale in the city in the past two months.
New York-based Princeton bought the building at 355 Alhambra Circle from PGIM Real Estate, according to news releases from Princeton and the seller’s broker.
Mike Davis and Dominic Montazemi were part of a Cushman & Wakefield team that represented PGIM.
The deal marks Princeton’s debut in South Florida real estate, after the private equity firm for years tried expanding to the market, CEO David Tawfik told The Real Deal. Princeton didn’t finance the deal, and Tawfik declined to disclose the firm’s capital structure or investors. Founded in 1978, Princeton focuses on office, medical and retail real estate in New York, according to its website.
Completed in 2001, the 16-story building has roughly 225,000 square feet of offices on nine levels and retail space. PGIM Real Estate, the asset management arm of Prudential Financial, had paid $83.1 million for the property in 2015, according to records.
The building is roughly 85 percent leased, according to Cushman & Wakefield’s Brian Gale, who handles its leasing. Asking rates are about $60 per square foot. Tenants include law firm Halpern Rodriguez, National Insurance, stone supplier Cosentino and Merrill Lynch Wealth Management.
Coral Gables is catching the eyes of tenants who are priced out of Miami’s urban core, Gale said.
In the Brickell Financial District, asking rates at new office towers reached a record of more than $100 per square foot following the influx of out-of-state businesses that took hold from late 2020 to early last year. But in Coral Gables, rents are less than Brickell by an average of $50 a square foot, Gale said. As tenants turn to Coral Gables for its more affordable offices and proximity to residential areas, the city’s office rents are expected to rise, he said.
“That spread is getting smaller now. … [Already,] rents in Coral Gables are up $12 a foot in the last 12 months,” Gale said. “Investors see the upside.”
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In August, Torose Equities, Terranova and Alex Karakhanian’s Lndmrk Development bought the 255 Alhambra Circle office building for $54.4 million, records show. The 13-story building with 220,000 square feet of offices is down the street from 355 Alhambra.
This year, homegrown logistics firm Ryder System leased two floors for its headquarters at the Colonnade office building at 2333 Ponce de Leon Boulevard in Coral Gables. The firm, founded in Miami over 90 years ago, downsized its space due to the remote work shift and sold its longtime base at 11690 Northwest 105th Street in unincorporated Miami-Dade for $42.1 million in May.