cypress financial center.
Cypress Financial Center
5900 North Andrews Avenue
Cypress Financial Center is a 206,774 square foot, Class A office tower and garage completed in 1988 and located in the Cypress Creek submarket of Ft. Lauderdale. The original offering included a second nearby property which the owner ended up selling off
individually and Cypress Financial Center was pulled from the market for a year. When it was reintroduced, SQUARE2 principals tied the asset up and completed due diligence, whereby additional capital items were identified, and terms could not be reached with the owner. Less than a year later, the owner brought the property back to market, and SQUARE2 principals secured the deal at our prior, discounted offer. The asset was purchased for $32 million, which is substantially below replacement cost and 50% below the previous property sale. In addition to the additional capital identified in our original bid, the hurdles that had to be overcome included a 75% occupancy rate and, the asset was being offered subject to a CMBS loan with two-years remaining, no future funding, and an above market interest rate.
The property was under‐managed, under‐leased and under-capitalized. The leasing agent’s mandate from the prior owner had been to keep occupancy up, but don’t spend any money. By implementing a strategic capital investment and upgrade program including the common areas, exterior signage, landscaping and garage renovation, SQUARE2's team was able to execute the proven strategy of developing spec suites as well as creating new income strategies from signage, and changing the lease price points in the building based on size and floor hierarchy, to lead the market in rental rates and maximize value.
The Property recently underwent a $2.7 million comprehensive restoration project which included an elevator modernization and renovations of multi-tenant corridors, restrooms and the main lobby. The capital infusion allowed Cypress Financial Center to offer CBD-quality stature and experience a significant rent discount to other submarkets. Cypress Financial Center is being sold with a 93% occupancy, and an impressive weighted average lease term of 7.8 years, thereby providing stable in‐place cash flow with contractual rent escalations for existing tenants and notable mark to market upside as legacy leases expire. In total, the SQUARE2 team completed over 167,000 of new and renewal leases resulting in a sale in 2021 for $44.2 million.