A Walt Disney Co. affiliate paid $21.8 million last week for a Class A Celebration office building primarily to fill a need for more of its own local office space, the seller told GrowthSpotter.
"They were the largest tenant. They occupied 36 percent of the building," TerraCap Managing Partner Steve Hagenbuckle said. "They've had a lot of growth in the cruise line, and they were running out of space."
TerraCap had acquired the 126,000-square-foot building known as "Celebration Center" in 2015 for $17.9 million. At the time the building was nearly 25 percent vacant. Besides Disney, other tenants include Hunt Engineering Services and Experience Kissimmee. The five-story building was constructed in 2001.
"We're a value-add private equity fund manager," Hagenbuckle said. "We identified the upside opportunity for this asset in terms of the improvements, occupancy and lease rates. We look for assets that are well-located and well-built."
He said TerraCap typically holds onto assets for three to six years, improves the cash flow, and then sells for a profit. Even though the building was 83 percent leased at time of sale, that aspect was attractive to the buyer, who had an immediate need for more office space.
"It was a good investment for us," he added. "We had positive income from it for the three years we owned it, and we sold it for a profit."
CBRE Orlando's Ron Rogg brokered the sale. The deed recorded a $17.2 million sale price, but Hagenbuckle said that amount only reflected the value of the real property. The contracted sale price included the value of the leases as well as personal property.
Disney purchased the building through an affiliate company linked to its American Broadcasting Companies (ABC) headquarters in New York.