PALM BEACH GARDENS, Fla., Oct. 30, 2019 /PRNewswire-PRWeb/ -- A Massachusetts based value-add buyer has acquired Village Square Crossing in Palm Beach Gardens, Florida, with plans to upgrade and hold the building as a long term asset accumulation strategy.
The multi-story building at 300 Village Square Crossing in prestigious Eastern Palm Beach Gardens was 100 percent occupied by Northrop Grumman Corporation at the time of the sale to Skin Workin LLC.
"The building offers an excellent opportunity to add value through repositioning rents to align with the tremendous upward pressure in upscale Palm Beach Gardens office and professional retail space," according to Brad Kuskin, founding principal at Compass Commercial Group.
"Village Square provides a significant opportunity with an S&P Triple B credit rated corporate tenant, with current lease rates as much as $8 per square foot below market," Kuskin continues. "If Northrup Grumman vacates the building upon lease expiration, the well-positioned property appeals to a wide range of tenants attracted to an upscale suburban location within one of Palm Beach County's core northern neighborhoods."
Ghada Dergham, of Liebowitz Realty Group, represented 300 VSC LLC, which sold the 8,629-SF building for $1.65 million, or $191.22 per SF. 300 VSC LLC has owned Village Square Crossing for approximately five years and chose to liquidate the property due to non-asset related matters.
"This building is positioned very well in the market. The price point and corporate credit tenant made it very difficult to pass up," said Dan Hostetter, Managing Principal of Skin Workin. Hostetter has been targeting Northern County suburbs like Palm Beach Gardens as an expansion from downtown West Palm Beach shifts northward. "Northrup Grumman has been in the building for nearly a dozen years, and the new owner is protected whether they decide to renew or expand into another larger footprint in Palm Beach County," said Kuskin.
The acquisition represents Skin Workin's first purchase in the Palm Beach market. The company typically buys properties in the $3 million to $15 million range, where it sees an opportunity to add value.
"The Managing Principal, Dan Hostetter, has a great vision for what properties could and should be," Kuskin said. "A lot of what you're missing in a typical building is life, character, something that feels clean and comfortable," he said, adding that "staying nimble and conducting expedited due diligence is a primary value driver for the company."
Village Square Crossing was built as a multi-tenant professional office building, and one of its attributes is that it has balconies on one side. With 4,200-SF floor plates, it also has abundant parking, accessibility, and extremely versatile zoning, including the allowance for full medical operations catering to nearby Palm Beach Gardens Medical Center.
The building was constructed in 2004 and underwent continual upgrades to accommodate Northrup Grumman as the sole tenant. In addition to ample field parking, the property offers easy access to the array of dining and shopping on PGA Boulevard and I-95 via access points on Prosperity Farms Road and RCA Boulevard. The Gardens Mall, Downtown at the Gardens, and Legacy Place are all within two miles from the site.
Skin Workin plans to upgrade the building with the expectation of increasing value and lease rates. There will be interior, cosmetic, and system upgrades throughout the building. The new owner is working to maximize energy efficiencies, which will include LED lighting in the tenant spaces. It also is looking at entryway improvements and overall curb appeal upgrades.
Hostetter's affiliated companies currently own properties in Massachusetts and made a strategic decision to start expanding into Florida, with a focus on Palm Beach and Martin County-based properties.
"So many of our clients have realized success in the Florida market, which continues to act as a magnet for capital from other states. Full-time residential growth and accompanying millennial-minded locals press demand on Palm Beach commercial space," he said. "It's gratifying to bring investors into the area, who ultimately follow investment assets with residential property," Kuskin states, adding South Florida also is better positioned than some markets to weather economic downturns.
"We follow larger economic trends in terms of specific asset class growth and pockets of Florida that are stronger than others. We feel that most South Florida markets are going to maintain a higher level of growth when compared to other regions of the country," he said.
Brad Kuskin is a Founding Principal of Compass Commercial Real Estate in Palm Beach, Florida.
For more information, please visit compass.flcre.com, email [email protected], or call (561) 264-5343.
SOURCE Compass Commercial
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