“Cross Ocean Partners and CP Group have jointly acquired an eight-building office portfolio in Central Florida for $96 million, encompassing over 720,000 square feet of space at a high occupancy rate, marking a significant expansion in the region’s commercial real estate market.”
Cross Ocean Partners, a global investment firm specializing in credit and special situations, has teamed up with CP Group, a prominent real estate investment and management company, to purchase a substantial office portfolio in Central Florida. The $96 million transaction involves eight buildings spread across five properties, totaling approximately 722,456 square feet of leasable space. This deal underscores the ongoing appeal of high-quality office assets in growing markets despite broader economic uncertainties.
The portfolio is strategically located in key submarkets within the Orlando metropolitan area, including downtown Orlando and Lake Mary. It features institutional-grade properties with a diverse tenant mix, including financial services firms, technology companies, and professional services providers. Current occupancy stands at around 93%, reflecting strong demand for well-maintained, amenity-rich office spaces in the region.
Portfolio Breakdown
The acquired assets include:
Fairwinds Credit Union Tower: A prominent high-rise in downtown Orlando serving as a flagship property with modern facilities and prime visibility.
Lake Mary Office Complex: Multiple buildings in the Lake Mary submarket, known for its business-friendly environment and proximity to major highways.
Additional Suburban Offices: Scattered across Central Florida, these properties offer flexible layouts suitable for mid-sized tenants seeking cost-effective alternatives to urban cores.
This mix allows for diversified revenue streams, with average lease terms extending several years and built-in escalations to hedge against inflation.
Strategic Benefits for Buyers
| Property Location | Number of Buildings | Approximate Square Footage | Key Tenants |
|---|---|---|---|
| Downtown Orlando | 1 | 250,000 | Financial institutions, corporate headquarters |
| Lake Mary | 4 | 300,000 | Tech and professional services |
| Other Central Florida Sites | 3 | 172,456 | Mixed office users |
For Cross Ocean Partners, this acquisition aligns with its focus on value-add opportunities in undervalued assets. The firm plans to implement targeted capital improvements to enhance energy efficiency and tenant amenities, potentially boosting net operating income by 10-15% over the next few years.
CP Group, with its extensive experience in repositioning office properties, sees potential in adapting spaces to post-pandemic work trends, such as hybrid models and collaborative environments. The partnership leverages CP Group’s local operational expertise to manage day-to-day leasing and maintenance, aiming to achieve full occupancy within 18 months.
The deal was financed through a combination of equity from the buyers and debt from regional lenders, reflecting favorable borrowing conditions for stabilized assets. Pricing equates to roughly $133 per square foot, which is competitive compared to recent comparable sales in the Orlando market, where cap rates for similar properties hover around 7-8%.
Market Context
Central Florida’s commercial real estate sector continues to benefit from population growth and corporate relocations drawn by low taxes and a skilled workforce. Office vacancy rates in the Orlando area remain below the national average, supported by expansions in sectors like healthcare, tourism, and aerospace. This transaction highlights investor confidence in the region’s resilience, even as national office markets grapple with remote work shifts.
Buyers anticipate rental growth driven by limited new supply, with only a handful of speculative developments underway. The portfolio’s strong cash flow profile positions it well for long-term hold strategies, potentially generating annualized returns in the mid-teens for the joint venture.
Disclaimer: This article is for informational purposes only and does not constitute financial advice, investment recommendations, reports, or tips. Sources are not mentioned, and no time or date is provided.