Holliday Fenoglio Fowler, working on behalf of the borrower—a joint venture between The Praedium Group and Tower Realty Partners, Inc.—has secured $50 million in refinancing for three Central Florida office properties.
The three properties, totaling more than 780,000 square feet of office space, include Quorum Center and Oakridge Office Park in Orlando and 850 Trafalgar in Maitland.
The loans were secured in two separate transactions; the 10-year, fixed-rate loans for Quorum Center and 850 Trafalgar were placed with UBS Real Estate Finance Group, while a 10-year, fixed-rate loan for Oakridge Office Park was placed with Morgan Stanley. According to HFF, all three non-recourse, securitized loans were priced in the mid four percent range.
The HFF team representing the borrower was led by Michael Weinberg, a director in HFF’s Orlando office, along with directors Elliott Throne and Chris Drew and senior real estate analyst Jorge Portela from HFF’s Miami office.
According to CBRE, the Orlando office market ended a five quarter run of positive absorption with negative absorption of more than 225,000 square feet in the fourth quarter of 2012. The local market is still trying to regain its footprint following the deterioration of market fundamentals in mid-2008. Improving market fundamentals in strong submarkets have been mostly negated due to weakness in other submarkets. Landlords have been tightening up on free rent and other concessions and rents have made no substantial improvements overall. As the vacancy rate for Class A product continues to inch downward, developers’ confidence will improve and formerly stalled projects may be revived. However, inconsistency throughout the Orlando area makes it difficult to predict where the market is headed.
Chart courtesy of CBRE
Image: Quorum Center via Tower Realty Partners