Falcon Purchases Newly Constructed IBM Building In Boca Raton
In late September 2001, Falcon Real Estate Investment Company, LP completed the acquisition on behalf of one of its clients of the newly constructed IBM office building in Boca Raton, Florida. The property was purchased from Beacon Square, LLC (an affiliate of the St. Joe Company). IBM is consolidating three South Florida offices and over 1,000 employees to this location.
The property was purchased from the developer at a price of $33.8 million and mortgage financing was provided by Credit Suisse First Boston. This was a particularly difficult closing since it occurred after the tragic events of September 11th that occasioned so much uncertainty in the real estate, insurance and financing markets. However, all parties remained committed to the transaction and, with the particular cooperation of IBM, the transaction closed as scheduled.
The ten-year lease with IBM Inc. is triple-net, and has a 12.5% rent increase after five years. The tenant has two renewal options at 95% of fair market value. The property is strategically located at the intersection of Interstate 95 and Congress Avenue in Boca Raton. IBM has had a long history in Boca Raton, and developed the nation’s first personal computer at its previous campus location in that city.
Robert Moreira, a Vice President of Falcon Real Estate responsible for the company’s Miami office, pointed out that the IBM building had been selected as the “Best Office Deal of the Year” by South Florida Business Journal/Ernst & Young. “This transaction meets the very exacting investment criteria established by our client, since it will provide secure and growing income for the next ten years.”