Boca Raton-based IP Capital Partners paid $28.2 million on Dec. 23 for the Class A Millenia Park One office building on Vineland Road. It's the firm's first Orlando investment, and IP Capital is now actively seeking more office, industrial or retail acquisitions in the area, the company's chief investment officer told GrowthSpotter.
"We literally looked at hundreds of Orlando properties in recent years before making this first acquisition, but we've been watching the market since 2004," said Josh Procacci on Wednesday. "We're investors focused on deep value and value-add opportunities, and were seeking distressed assets, whether it be deferred maintenance, the capital stack or any other issue where we could use our proactive management to bring the asset back to stabilization.
"This property fell right into our ideal profile," he continued. "I like the growth story driving (Orlando). We love a lot of sub-markets there, the downtown growth. You're seeing tremendous build-to-suits, and we love the presence of Mall at Millenia, the wealth coming off of Conroy Road and out of Windermere and Metrowest."
Located at 4901 Vineland Road, this six-story Millenia Park One (162,260 net square feet) and two-story parking garage were built in 1999. It had been owned and managed by Parkway Properties since June 2014, when it was purchased for $25.5 million.
With frontage on Vineland Road and I-4, along with direct access to Millenia Boulevard, the building was 78 percent occupied at time of sale, with main tenants being Pulte Homes and boutique hotel management firm The Kessler Enterprise.
The property currently has about 32,000 square feet of space vacant, with contiguous blocks of 20,000 square feet (partial floor), 10,000 square feet and 2,000 square feet.
IP Capital Partners plans to invest "a few million" dollars into upgrades and renovations for the building in 2016, Procacci said, beginning in the first quarter. Interior corridors and restrooms, exterior landscaping, cleaning and painting will be areas of focus, as well as new electronic directory signage.
IP Capital plans to choose a general contractor for that work in the coming month, and would favor local applicants, Procacci said.
The group will more actively seek Orlando acquisition opportunities in 2016, he added.
"While we're selling part of our portfolio, we're net buyers of office, industrial and retail," Procacci said. "We're looking for a deep value component, some sort of distress or value proposition where we can apply our expertise and turn it around, re-brand or reposition the asset."