DWS Sells Two Fort Lauderdale Office Properties for $428M (But Nabs Little Gain)

German asset manager DWS has offloaded two neighboring office complexes in Downtown Fort Lauderdale, selling each for over $200 million this week, and ending a near decadelong drought for the city. But the investments gained little in appreciation over that time. 

In the larger transaction, a partnership between Square2 Capital, Highline Real Estate Capital and Lone Star Funds paid more than $220 million for Bank of America Plaza at Las Olas City Centre, a 23-story office tower, according to a source familiar with the transaction.

“The South Florida office market has strong underlying fundamentals, driven in part by in-migration trends and return-to-work mandates,” said Jérôme Foulon, global head of commercial real estate at Montreal-based Lone Star. “At the same time, since new developments have all but stopped in recent years, some markets are experiencing shortages of office space in quality assets.”

The 410,561-square-foot high-rise occupies a full 2.4-acre city block at 401 East Las Olas Boulevard and is 94 percent leased, per the buyers. Besides Bank of America, tenants include Greenberg Traurig, Boies Schiller Flexner, Motorola Solutions and UBS. CBRE brokered the sale. 

In 2016, DWS’s RREEF Property Trust purchased the high-rise, built in 2003, for $220 million, according to property records. 

The sale comes just a day after Bradford Allen Investment Advisors purchased DWS’s Las Olas Centre I & II office complex for $208 million, the South Florida Business Journal first reported. 

The 470,810-square-foot property, at 350 and 450 East Las Olas Boulevard, is 69 percent occupied, according to the buyer, which plans to spend $25 million on renovations.  

RREEF Property Trust bought the property for $204 million in 2014, according to property records. DWS declined to comment on both transactions. 

During the height of the pandemic, high-profile, new-to-market tenants often neglected Downtown Fort Lauderdale in favor of Miami or West Palm Beach. But asking for rents and vacancies have remained healthier than the national average. 

Julia Echikson can be reached at Jechikson@commercialobserver.com.