
The Colonnade
Coral Gables, Florida
Historical Transaction
NRSF: 208,840
Total Capital: $51.4 million
Equity Invested: $13.4 million
Status: Sold
Realized Multiple: 3.6x
Realized IRR: 35%
The Colonnade is an 11-story Class A office tower (“Colonnade”) located at the intersection of Miracle Mile and Ponce de Leon Boulevard in the Coral Gables CBD. Colonnade is part of a mixed-use complex with 23,000 square feet of retail store frontage along Miracle Mile and a connection to the Westin Colonnade hotel. The Coral Gables CBD has historically benefitted from an outstanding local economy driven by the multi-national organizations and financial services industries. At time of acquisition in August 2003, the CBD office market was 83% leased on average, had experienced strong Class A rental rate growth over the preceding three years, and market trends remained positive with the return of new construction including pre-lease commitments.
Opportunity
- Seller was a privately held bank with property/asset management deficiencies – irreplaceable asset with premier location considered “Main and Main” in the Coral Gables financial district.
- Market research projected tightening in Coral Gables CBD with increases in rental rate and occupancy.
- Minimal construction and increased demand of office space was projected to allow new ownership to push rents in this highly sought after market.
Value Enhancement Strategy
- Due to limited size of the typical tenant in the market, created functional executive suites operation to address a need unmet in the market at time of acquisition.
- Ownership made a significant capital investment in the building spending approximately $3.0 million dollars on a new roof, cooling tower, and chillers.