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NBF Looks South

NBF Looks South
New Boston Fund’s Pryse Elam
New Boston Fund’s Pryse Elam is thrilled with the 20% vacant, 91k SF office building the CRE investment firm just bought in Miami. (To be fair, we'd be happy with a cardboard box in Miami.) One Waterford Centre, a Class-A building in the Blue Lagoon Business Park, is part of the vibrant Miami International Airport west submarket; it's one of the nation’s busiest global trading hubs, closely linked with Latin America. Pryse says that NBF’s last investment in a distressed Miami asset, the 282k SF One Park Square, is doing well. In late ’10, NBF purchased that office when it was only 10% leased; it’s now up to 70%.
Waterford Centre, Miami
In Blue Lagoon Park, Waterford Centre is the first Class-A building to change hands in 10 years, Pryse says. He calls the property good real estate that’s at a low point in the cycle. The vacancy rate is up while the rents and the value are down. But he’s betting that the 17M SF Miami office market has hit bottom, is improving and by year-end will see Class-A vacancies drop below 10% (the traditional measure of office market equilibrium). Regionally focused NBF owns 2M SF of offices in the Southeast: in South Florida, Charlotte, and Raleigh.
Pat Schooltz, New Boston Fund
From its Boston HQ, NBF also focuses on the Northeast and Mid-Atlantic around DC—where regional director Pat Schooltz says the company recently acquired 111 K St, a few blocks from the Capitol. Located in the NoMa area, the 11-story building was another distress opportunity. Originally developed as office condos, two floors were sold, but prospective buyers for the remaining 67k SF disappeared by ’10 when construction was completed. NBF purchased the vacant portion of the Class-A building in a recapitalization with the bank and the developer. While some might shy away from buying vacancy, the DC office market is so strong that Pat’s team underwrote the deal anticipating a two-year lease-up.