New York-based C-III Capital Partners and Chicago-based Vanderbilt Office properties teamed up in purchasing the Northbridge Tower, located in West Palm Beach, Florida for $98 million. The Northbridge tower, referred to by locals as the “Darth Vader” tower due to its dark windows, is a 294,000-square-foot building full of Class A office space that is currently inhabited by tenants such as Wells Fargo and Qwest.
The building was previously purchased in 2016 through a joint venture by Boca-Raton based Crocker Partners and Westport, Connecticut-based Greenfield Partners in 2018 for $68 million. An additional $15 million was put into property renovations to upgrade existing features and to add a barista bar, cafe, and conference center.
Brett Reese of Crocker Partners comments that since the renovations, rent per square foot has increased by a total of $22, from $20 when the building was purchased in 2016 to the current price of $42. Along with this increase in value per square foot, Reese says that West Palm Beach is becoming a destination for tenants in investment management and private equity, noting that there is a demand from investors for class A office space.
“Since we renovated, we brought in over ten new family offices and private equity [firms] to the building,” Reese said. “Historically it has been a building where lawyers have gravitated to given its proximity to the courthouse. It’s now changed. We are seeing more financial services.”
At the acquisition of the Northbridge Tower by C-III Capital Partners and Vanderbilt Office Properties, the building was 60% leased, according to Reese, leaving office space for more financial services companies and other potential employers to inhabit in the future.
C-III Capital Partners is one of the largest firms specializing in CMBS in the United States. Andrew Farkas is the CEO and Chairman of the investment management and commercial real estate services company, an affiliate of Island Capital Group LLC.