Singaporean REIT sells Boca Raton office building for $82M –– an 18% discount from 2021

A Singaporean real estate investment trust sold the One Town Center office building in Boca Raton for $82 million, marking a 17.6 percent discount from its purchase price three years ago. 

Prime US REIT, which is publicly traded on the Singapore Exchange, sold the 10-story, 201,000-square-foot building and attached five-story garage at 1 Town Center Road to Gatsby Enterprises, according to records and real estate database Vizzda. The buyers took out a $51 million loan from Wells Fargo. 

Gatsby is a New York-based investment firm with its Florida arm called Gatsby FL. Led by Nader Ohebshalom and Babak Ebrahimzadeh, Gatsby has invested in some trophy South Florida properties. This includes the 800 Brickell office tower in Miami, which Gatsby bought for $125.5 million in 2019. 

One Town Center was completed in 1990 on nearly 10 acres, records show. Prime US REIT bought the property in 2021 for $99.5 million.

The recent sale was completed as part of Prime US REIT’s strategy to bring down its debt and maximize its liquidity to pare down interest rate costs and finance capital improvements at other properties, according to the seller’s filing in May to the Singapore Exchange. One Town Center’s sale price is slightly less than the property’s $84.8 million valuation as of December, according to the seller’s filing. 

The property’s discounted sale comes amid a gloomy nationwide outlook for the office market due to remote work and elevated interest rates that have led to financing woes for investors. While some owners are having a hard time refinancing maturing loans, others are struggling to pay the much higher interest rates for floating-rate debt. 

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South Florida became a magnet for out-of-state firms over the past four years, leading to industry hype over the local office market’s resilience to vacancy and financial woes. Yet, several South Florida office properties have traded at discounts. 

This month, Bridge Investment Group sold Sawgrass Technology Park at 1601-1699 Northwest 136th Avenue in Sunrise for $49 million, marking a 34 percent discount from five years ago. In April, Starwood Capital Group sold an office portfolio in Miramar consisting of Miramar Centre I and III buildings at 3401 and 3601 Southwest 160th Avenue, as well as Huntington Centre I and II buildings at 2901 and 2801 Southwest 149th Avenue, for $45 million. The deal marked a 45 percent discount from Starwood’s portfolio purchase price nine years ago.