New York-based Related Companies has secured a $243 million construction loan for one of its office projects in West Palm Beach, Florida. The lender was an affiliate of MSD Partners, owned by Michael Dell, chairman and chief executive officer of Dell Technologies. Funding will go to One Flagler Building, a 277,000 square foot office building near the Royal Park Bridge and overlooking the Lake Worth Lagoon.
The mortgage, granted by MSD Partners, is set to become one of the largest commercial real estate construction loans in South Florida in 2022. The only other funding that came close to that amount was Terra’s $230 million loan for a mixed-use development near Miami International Airport.
At the time of the transaction, One Flagler was 60% pre-let. By the end of the year, developers expect that number to grow to around 75%. The current list of tenants includes companies such as First Republic Bank, Siris Capital, private equity fund GTCR and credit asset manager Diameter Capital Partners, as well as Greek seafood restaurant Estiatorio Milos, which houses the retail section of the building.
The 25-story property was designed by architect David Childs, who also worked on projects such as One World Trade Center and 7 Times Square. Scheduled for completion by 2024, One Flagler is west of First Church of Christ Scientist — a property that came with the 2.5-acre property Related acquired for $20.1 million last year.
As of 2020, Related has been dominant in the West Palm Beach office market as both a developer and owner. In terms of its own assets, the Company’s portfolio includes office properties Phillips Point, CityPlace Tower and Reflections, as well as a 50% interest in Esperanté Corporate Center. Meanwhile, Related recently added a 20-story building to its name at 360 Rosemary and announced plans for another office development at 515 Fern. In fact, the company’s entire West Palm Beach portfolio has earned it the nickname “Wall Street of the South” for its ability to attract foreign financial firms.
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