Lone Star Funds Sells Open-Air Mall in Palm Beach Gardens, Fla.

DLC Management and Principal Asset Management bought an open-air shopping center in Palm Beach Gardens, Fla., the joint venture announced. The sale price was likely north of $114 million. 

Called Legacy Place, the 419,936-square-foot property is 94 percent leased to tenants that include Barnes & Noble, The Container Store, Jos. A Bank, Capital Grille, Petco, Eddie V’s, Best Buy and Michaels. The 43.1-acre asset at 11290 Legacy Avenue is at the intersection of PGA Boulevard and State Road A1A, directly across from the enclosed Gardens Mall.

The sale price remains unclear — the seller, Lone Star Funds, did not respond to a request for comment, while the buyers declined to comment — and no deed was recorded. The buyers assumed the seller’s mortgage from Wells Fargo and increased the debt by $78 million, bringing the acquisition’s total debt to $114 million. 

The acquisition was attractive thanks to “lease rollovers, remaining vacancy and potential long-term redevelopment opportunities” in a wealthy section of South Florida, according to the buyers, which also included an unnamed institutional investor.

Elmsford, N..Y-based DLC Management specializes in open-air, grocery-anchored retail, with a portfolio of about 100 properties nationwide. 

The London-based seller acquired the mall for $101.7 million in 2021 at the height of the pandemic — paying nearly $78.5 million less than the property’s previous purchase price in 2007, according to property records.

The transaction follows other big retail transactions in South Florida in recent months. The billionaire siblings behind Reuben Brothers paid $200 million for a retail complex on Palm Beach’s swanky Worth Avenue, where luxury fashion labels Emilio Pucci and Akris, watchmaker Hublot, as well as Starbucks operate locations. 

Newmark arranged the transaction with a team consisting of Conor Lalor, Eric Williams and Adam Spies.

Despite its latest trade, Lone Star Funds is staying put in South Florida. Since last year, it purchased two office buildings — one in Fort Lauderdale, the other in Coral Gables — for a combined $340 million from Deutsche Bank’s asset manager, which sold them at slight discounts. 

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