Pompano Beach-based Grover Corlew is expanding its real estate investment business across the state with strategic buys in hot markets.
The real estate group closed out 2016 with a key $50 million investment in Central Florida. In a deal led by partners Anuj Grover and Mark Corlew, the firm acquired a 21-building office complex spanning 46 acres near Orlando’s bustling Central Business District.
The Orlando Central Office Park, located north of East Colonial Drive across from the Orlando Fashion Square Mall, boasts 637,380 square feet of Class B office space — an ideal investment opportunity for the South Florida firm.
“we sold our multifamily portfolio of a couple thousand units in 2014 and 2015 with the idea of moving toward office and retail [properties] throughout Florida,” Corlew said. “This property represents part of that evolution.”
Grover said the landmark property was a difficult asset for other players to buy. Because of its vintage age and Class B status, the office park didn’t attract major real estate companies. Yet it was too pricey for the marker’s small firms.
Grover Corlew recognized the property’s long-term redevelopment opportunity.
“Orlando Central’s submarket is undergoing a transformation as sites are being redeveloped in the immediate area,” Grover said. “We are looking at improvements to the property in the short-term with an eye on redevelopment over the next decade. The potential of Orlando Central is extraordinary.”
The office complex, which traded for $50.35 million, is located near the Orlando Fashion Square Mall, a 1.2 million-square-foot shopping center undergoing renovation. The shopping mall upgrade includes a $26 million, 151-room ecofriendly hotel slated to open later this year. A 356-unit apartment complex has also been proposed.
The newly acquired office property lies west of Baldwin Park, which is considered one of Orlando’s few “live, work, play” communities, and abuts Elan Audubon Park, a newly built 449-unit apartment complex, Grover said.
“In our mind, the property is one of the jewels of Orlando as far as location is concerned,” he added.
Orlando Central is home to several government tenants, including the U.S. Environmental Protection Agency. Other large tenants include design firm Cuhaci & Peterson and the Morgan & Morgan law firm. The park is 82 percent leased, with available suites ranging from 800 to 20,000 square feet.
Grover Corlew’s near-term goal is so improve the property and push up its occupancy rate.
“We do think there is a long-term redevelopment opportunity for portions of the property, if not all of the property,” Corlew said. “It may be in the next cycle, which is fine for our hold period.”
The group plans on owning the asset for at least the next seven to 10 years. At that point Grover Corlew will evaluate the park’s redevelopment options and determine whether the group will take the project on.
CBRE brought the property to market last summer, Corlew said. His firm went under contract in late October and closed about two months later.
The biggest challenge was movement in the debt market, he said. An interest rate hike coincided with the closing process, which delayed their final debt structure. The team was able to secure a 10-year, $38 million loan from Rialto Mortgage Finance for the acquisition.
Grover Corlew has been an active developer in and around Central Florida. The group recently redeveloped a former car dealership in Vero Beach, a partion of which was developed with a Wawa convenient store that sold in December for $5 million.
The Orlando deal wrapped up the firm’s busy fourth quarter, which included the Wawa sale as well as the $12.3 million refinancing of Sabre Centre I, a Class A office building in Boca Raton.
Grover Corlew is heavily invested in Broward and Palm Beach Counties, and has plans to invest jump into Miami-Dade County in the near future.
Grover said the team has additional “big deals” in the pipeline. “We expect to make more moves on the chess board in the month of January,” he said.
The South Florida firm initially focused on the acquisition, development and redevelopment of offices, medical buildings and land in Atlanta before liquidating its portfolio in 2006 and 2007. The firm reentered the market in 2010 and began buying thousands of value-add multifamily units throughout the Southeast. The firm pivoted its focus back toward office, medical office and retail properties starting in late 2013, which has led to over 1 million square feet of acquired or developed product.