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Built in 1983, the building sits on 8.6 acres and has been institutionally owned and operated since 2007.
Built in 1983, the building sits on 8.6 acres and has been institutionally owned and operated since 2007.

TerraCap Management is investing in yet another Maitland Center office property, this time paying $13.8 million for the 850 Trafalgar building just west of North Lake Destiny Road.

Matthew Hart, director of investment analytics at TerraCap, said the firm specializes in value-add opportunities and will mirror something akin to what they did with the Keller Center building at 101 Southhall Lane about eight months ago.

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TerraCap sold the 160,000-square-foot Keller Center for a recorded price of about $23 million. Including additional costs, the overall price tag tallied up to roughly $28 million.

Prior to that sale, the firm had pumped $7 million into renovating the building and pushed occupancy levels up to 100 percent from 26 percent after acquiring it in 2014 for $9.3 million.

In the most recent deal, TerraCap paid about $92.57 per square foot for the 149,000-square-foot, four-story office building at 850 Trafalgar Court.

The 149,000-square-foot, four-story office building traded hands for $92.57 per square foot.
The 149,000-square-foot, four-story office building traded hands for $92.57 per square foot. (Marcus & Millichap)

Renovations will be done to the interior and exterior of the building, Hart said, adding he expects the firm to hold onto the asset between three to five years.

Douglas K. Mandel of Marcus & Millichap and Institutional Property Advisors, along with Marcus & Millichap's Nicholas Hanson, brokered the deal.

The seller is an affiliate of the New York-based privately-held real estate investment firm The Praedium Group. Through one of its funds, it paid $19.6 million for the 8.6-acre site in 2007  right at the height of the real estate market.

Occupancy at 850 Trafalgar was 82 percent at the time of the sale. The Federal Bureau of Investigation currently occupies about 40,000 square feet on its top floor, but plans to vacate soon, Hart said.

Detail on the $7 million renovation that led to a quick sale of this Maitland office building.  

"Knowing the space would be vacant made [the deal] all the more attractive."

Once the tenant moves out the firm plans to completely renovate the top floor and market the space out to big-block users, Hart said.

Mandel adds there's room for potential rent appreciation.

"The market there is pretty strong and office occupancy rates are very high," Mandel said. "I think it'll be a big boost in value."

The building features frontage along Interstate 4 and "an above-average parking ratio," Mandel said.

The Maitland Center submarket consists of more than six million square feet of suburban office space and is home to satellite offices for a number of the region's largest employers, including Adventist Health System, Abbott Laboratories Inc. and Spectrum.

Earlier this month, a fund that invests on behalf of Tony James, the vice chairman of one of private equity firm, Blackstone Group, paid $33.5 million for the Reserve at Maitland office complex.

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In January, a real-estate investment trust formed by a joint venture between KBS Realty Advisors and the Singapore conglomerate Keppel Corp. paid $48.5 million for 230,371-square-foot Maitland Promenade I building.

Marcus & Millichap are also marketing the Paragon Building at 1060 Maitland Center Commons for about $17 million.

Have a tip about Central Florida development? Contact me at arabines@GrowthSpotter.com or (407) 420-5427, or tweet me at @amanda_rabines. Follow GrowthSpotter on FacebookTwitter and LinkedIn.

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