In a significant transaction that reflects the evolving landscape of the commercial real estate market, Galium Capital recently purchased the Lakeshore Plaza II office building in Sunrise, Broward County, for $17 million. This sale comes at a steep discount, as the property’s value has dropped nearly 50% from its last sale price of $32 million in 2013. The deal highlights the challenges suburban office buildings face as remote and hybrid work models become more prevalent, but it also underscores the potential for recovery through strategic investment.
A Closer Look at the Transaction
The seller, TR Lake Shore Plaza LLC, an affiliate of Charlotte-based Barings Real Estate, was represented by a team from CBRE and Blanca Commercial Real Estate. The 128,550-square-foot building located at 1300 Concord Terrace was sold for $132 per square foot, a significant markdown compared to its 2013 value.
The buyer, North Miami Beach-based Galium Capital, financed part of the purchase with a $5.5 million mortgage from New Wave Loans Residential. This purchase price reflects a staggering 47% decrease from the previous sale and highlights a broader trend of declining values for suburban office properties, particularly in markets where remote work has reduced demand for physical office space.
The Remote Work Effect on Office Spaces
The decline in value for Lakeshore Plaza II is not an isolated case. Many suburban office buildings have seen reduced demand and occupancy as companies continue to embrace remote and hybrid work models. Fewer employees commuting to offices means less need for expansive office spaces, and landlords are facing reduced occupancy rates as a result. At the time of the sale, the occupancy rate for Lakeshore Plaza II was just 50%, with tenants including New York Life, Copeland, Farmers Insurance, and the Florida Bar.
With only half of the building currently leased, it’s clear that the office sector in suburban areas is still grappling with the shift in workplace dynamics. However, Galium Capital sees an opportunity to turn things around through strategic upgrades and improvements.
Galium Capital’s Vision for Lakeshore Plaza II
Despite the challenging market conditions, Galium Capital is optimistic about the potential of Lakeshore Plaza II. Jonathan Slomianski, Director of Acquisitions at Galium Capital, highlighted the high quality of the office building and the attractive pricing as key factors in the decision to invest. Slomianski sees significant potential for growth once the property is upgraded to meet modern standards and better cater to the needs of today’s tenants.
“We believe that after investing in upgrades, Lakeshore Plaza II will be a premier property in the Sawgrass Corporate Park area,” Slomianski stated. “We see this as a great opportunity to elevate the tenant experience and position the building as a standout asset in the market.”
Plans for the building include improving tenant amenities, enhancing the common areas, and potentially increasing the energy efficiency of the building, which is already LEED Silver certified. This focus on modernization is part of a larger trend among South Florida office owners who are investing in building upgrades to attract new tenants and compete in a market that is becoming increasingly selective.
Blanca CRE Remains Leasing Agent
Blanca Commercial Real Estate will continue as the leasing agent for Lakeshore Plaza II. The firm is eager to partner with Galium Capital to breathe new life into the property.
“We are thrilled to be retained as the leasing team for Lake Shore Plaza II, Sawgrass’ newest and most distinguished office asset,” said Chris Gallagher of Blanca CRE. “By partnering with Galium Capital, whose capital and strategic expertise will enhance the property, we are eager to showcase this premier building as the standout asset in the Sawgrass Corporate Park.”
With improvements on the horizon and a new owner committed to elevating the building’s appeal, Lakeshore Plaza II may well attract more tenants, increasing its occupancy and overall value.
The Future of Office Real Estate in South Florida
The sale of Lakeshore Plaza II and its nearly 50% reduction in value sheds light on the current state of the office real estate market, particularly in suburban areas like Sunrise. As more companies allow employees to work from home or adopt hybrid schedules, demand for large office spaces has declined. This trend has forced property owners to rethink how they can make office buildings more attractive, often through modern upgrades and increased amenities that cater to today’s workforce.
While some might view the drop in value as a sign of long-term decline, Galium Capital’s purchase represents a growing trend among developers and investors who see opportunity in the current market. By investing in strategic upgrades, companies like Galium aim to reposition suburban office properties as competitive, high-value assets that can meet the evolving needs of businesses in the post-pandemic world.
Explore Real Estate Opportunities in South Florida
As the commercial real estate market continues to shift, there are still exciting opportunities for those looking to invest or lease space in South Florida. Whether you're seeking a commercial property with growth potential or interested in finding the perfect office space for your business, the Mastropieri Group is here to help.
Contact the Mastropieri Group today at 561-544-7000 to explore your real estate options and learn how we can assist you in navigating South Florida’s dynamic real estate market.
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