Glenfield Borrows $40M From SunTrust to Buy Jacksonville Office Park

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SunTrust Bank‘s commercial real estate lending division has helped an investor buy a Florida office complex with a $40 million loan, Commercial Observer can first report.

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The debt, provided to Atlanta, Ga.-based Glenfield Capital, supports the company’s acquisition of Gramercy Woods, a suburban office development at 9000 Southside Boulevard in Jacksonville, about 10 miles southeast of the city’s central business district.

“We are excited to acquire a best in class asset like Gramercy Woods,” James Cate, Glenfield’s founder, said in a statement. “Jacksonville’s Southside is the preferred choice for an office location in the Jacksonville [area] with tremendous fundamentals for investors.”

The property gets its name from New York City’s Gramercy Property Trust, which used to own it. Developed in 1989, the 90-acre office park was built for Barnett Bank, which was eventually sold to Bank of America in a series of acquisitions. Bank of America began paring down its occupancy at the office park in the mid-2010s, however, and in 2017, Ladder Capital bought a portion of the property for $115 million.

The rest of the office park passed into the possession of Blackstone when it acquired Gramercy late last year for $7.6 billion. Blackstone is the seller in Glenfield’s acquisition.

Aetna, a large Connecticut-based health insurer, will be Glenfield’s largest tenant at the property, having moved a regional headquarters there in 2017 to take up occupancy of 132,000 square feet, the Jacksonville Daily Record reported. The move represented a slight local downsizing for the health-care company, which had previously leased 170,000 square feet in an office tower in downtown Jacksonville. Oracle, a software company, leased 9,000 square feet at the property last spring.

A SunTrust executive who worked on the deal said that investment activity in the bank’s key Southeast market has been prolific even as the business cycle ages.

“More-and-more our clients are looking for a permanent loan solution to either take-out construction financing or to acquire property for a long-term investment,” Mark Hancock, a senior vice president of the bank, said in a statement.

Although Miami springs to mind as Florida’s commercial hub, Jacksonville is technically the state’s largest city, and its economy has roared. The unemployment rate, at 3.4 percent, easily beats even the taut nationwide level of 4 percent, and the city has become a regional center for health-care and finance. Of the city’s ten biggest employers, only one—Southeastern Grocers—isn’t in either of those two industries, according to JAXUSA, a local business group.

Georgia Pacific, Anheuser-Busch and Amazon are among the corporations that have announced significant expansions of their presence in the Jacksonville area in the last two years.