CP Group, Related Fund Acquire Miami-Area Complex

Las Olas Square. Image courtesy of CP Group

CP Group and Related Fund Management have acquired Las Olas Square, a two-building mixed-use office and retail project in downtown Fort Lauderdale, Fla.

SQUARE2 Capital, global private equity giant Apollo Global Management and Steelbridge Capital reportedly sold the property for $144.5 million, resulting in a 60 percent gain in value from the partnership’s acquisition price, and marking the largest office sale by price in Broward County since 2020.

The two contiguous assets are 515 at Las Olas Square, a 17-story office tower, and 501 at Las Olas Square, a three-story office-and-retail space.

In 2016, SQUARE2 Capital, Apollo Global Management and Steelbridge Capital bought Las Olas Square, formerly known as SunTrust Centre and excess development land for $90 million.

Expansive redevelopment

SQUARE2 principals devised a business plan that entailed an expansive redevelopment of both buildings, including rethinking and retooling how the 501 and 515 Buildings relate and interact with one another around and how the entire project functions and interacts with the surrounding downtown community.

“While this property was marketed by SunTrust Bank in 2016 as iconic, the SQUARE2 venture believed in Jack Welch’s philosophy of ‘Change before you have to.’ And, it turned out to be a really big change. Iconic is a term that is often thrown around, however, today, it could not be more apropos for this asset,” Jay Caplin, principal, SQUARE2 Capital, told Commercial Property Executive.

The 45,000-square-foot 501 building received the bulk of the redevelopment, which entailed modernizing what had historically been a very large “bank branch” building by gutting and reskinning it, updating all the mechanicals, roof and finishes. The 515 Building would receive upgrades to the garage, lobby, common areas, restrooms, as well as new conference centers and outdoor, covered community space.

A shaded urban park between the buildings was created to allow for restaurant and tenant seating along with improvements to the connectivity of both buildings, not only to each other, but to Las Olas Boulevard via upgraded pedestrian streetscape work. These experiential outdoor spaces were perfectly timed with the onset of the COVID-19 pandemic, allowing tenants and the broader community viable, WiFi enabled spaces to work and gather. This work also had the added benefit of connecting the dense CBD developments west of US1, to the historical low rise amenity area on the east side, making the neighborhood much more walkable.

The property’s current amenities include a dedicated parking garage, ample conference and meeting space, and on-site dining and retail options such as Del Frisco’s Grille and TruistBank. In addition, the location is just a five-minute walk to the Brightline Station and only a 10-minute drive to the Fort Lauderdale/Hollywood International Airport.

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According to a prepared statement by Brett Reese, senior vice president at CP Group, the buildings are situated “at a main-and-main location with an abundance of walkable amenities and a strong pipeline of multifamily buildings being developed in and around the immediate area.” He added that Las Olas Square is among the best-located real estate in Broward County and that its new owners look forward to improving an already desirable building.

The venture plans to further enhance the complex through upgrades to the lobby, common areas and outdoor spaces, as well as the addition of a café.

Leasing for Las Olas Square will continue to be handled by Cushman & Wakefield’s Travis Herring and Katherine Ridgway.

Not all fun in the sun

The Las Olas Square acquisition is CP Group’s third in 2022 and follows a year in which CP Group acquired more than 5 million square feet of office assets across the Southeast and Southwest.

Last July,  a goodly chunk of that 5 million square feet came in the form of Five Post Oak Park, a 567,000-square-foot office tower in Houston, bought by a joint venture of CP Group and funds managed by Rialto Capital Management.

The Fort Lauderdale economy has been recovering strongly, with the unemployment rate falling to 3.8 percent in 2021 from a high of 17.4 percent in May 2020, according to a fourth-quarter report from Avison Young.