BH Group, PEBB Buy South Florida HQ for $104M

6600 N. Military Trail. Image courtesy of CommercialEdge

The ODP Corp. has sold its 639,830-square-foot headquarters in Boca Raton, Fla., for roughly $104 million. BH Group and PEBB Enterprises acquired the asset in a partial sale-leaseback deal: The parent company of Office Depot and OfficeMax will maintain its headquarters in a portion of the building, totaling some 285,000 square feet, for at least two years.

CommercialEdge information shows the building previously changed hands in 2017 for $132.1 million. The price was 26.9 percent higher than the one of the current transaction.

In prepared remarks, Anthony Scaglione, CFO of ODP, said that the deal results in greater flexibility and lower operational costs for the company, allowing for improved asset utilization and shareholder returns.

Situated at 6600 N. Military Trail, the five-story building came online in 2008 on a 29-acre lot. The LEED Gold-certified property features 2,431 parking spaces, according to CommercialEdge data.

High prices in Florida

In Boca Raton, the 2022 end-of-year vacancy rate was 11.7 percent, a Cushman & Wakefield report shows. Demand in the area, as for the rest of the Palm Beach, Miami and larger Florida markets, was much higher for Class A office properties than for other asset classes. The same research shows that at the end of last year, Boca Raton office asking rent prices per square foot averaged $40.94, with $46.86 for Class A assets.

The Miami office market has started 2023 on a positive note, despite investments slowing down in response to lowered office space demand and rising interest rates. A recent CommercialEdge report shows that the metro’s sales volume accounted for $332 million as of February, occupying the fourth position in the U.S. after Boston ($666 million), New Jersey ($423 million) and Manhattan ($351 million).