UPDATED: DECEMBER 27, 2017 11:01 AM — A local family steeped in commercial real estate investment paid $8.9 million last Thursday in an off-market deal for a fully leased Orlando office building with highway frontage, and wants to diversify with more retail in the coming year.
Located at 604 Courtland St., the 4.72-acre parcel borders Interstate 4 just south of the Lee Road exit into Winter Park, where the "American Pioneer III" Class-B office building offers 74,200 square feet over three stories, dating to 1984.
The sale closed on Dec. 21 and was recorded Tuesday in Orange County. Richard Simone of Clearwater-based Buckingham Realty Advisors helped coordinate the deal.
"We were attracted to the property because we appreciate the I-4 frontage, the highway infrastructure and general stability of the trade area that surrounds it, which appears to be on the rise," Harry "Hank" Katzen, president with MarKay Management and manager of the family investment vehicle, told GrowthSpotter.
"It's a well-constructed building, and was leased at 100 percent with a nice tenant mix. It's an investment we think is going to do well for us."
MarKay Management will serve as the asset manager, and will employ a third party to manage the property and tenants. Southeastern Realty Group has been engaged at this point, Katzen said, due to having previously managed for the seller.
The buyer sourced a $5 million loan from IberiaBank that was coordinated by Trish Teague to help finance the purchase, and local attorney Frank Hamner served as legal counsel.
Funds behind this purchase were all from Katzen family members, though in other investments Hank Katzen said his family has included private investors they have worked with for decades.
MarKay Management oversees a portfolio of commercial building and land assets valued at roughly $38 million, said Katzen, and will be "looking for good opportunities in the retail segment" to invest in 2018.
The seller, American Pioneer III LLC, previously paid $7.5 million for the property in 2005. It was an investment vehicle of Bryan Johnson of Southeastern Realty, insurance agent and property investor Stephen F. Foreman of Winter Park, and Wayne Schoolfield, president and CEO of Schoolfield Properties, who turned over his stake in the asset a few years ago to his children Cheryl and Kevin Schoolfield.
A Katzen-managed affiliate had sold the 103-year-old 1 S. Orange Ave. office building in Downtown Orlando this past January, where Hank Katzen still maintains his MarKay Management office.