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Joint Venture Acquires 11-Building Office Portfolio in Jacksonville for $231M

Deerwood Office Park North in Jacksonville was included in the 11-building sale.

JACKSONVILLE, FLA. — A joint venture between Starwood Real Estate Income Trust Inc. (SREIT), Vanderbilt Office Properties and Trinity Capital Advisors has acquired an 11-building office portfolio in Jacksonville in an off-market transaction for $231 million.

The portfolio spans 1.3 million square feet and is situated within Jacksonville’s Deerwood Park submarket. The portfolio was 90 percent leased at the time of sale to 55 tenants, including Fidelity Investments, The Adecco Group and JPMorgan Chase Bank, with leases that expire in 2026, 2022 and 2022, respectively. Investment-grade companies make up 65 percent of the portfolio’s tenants.

“The Florida office portfolio is another example of SREIT acquiring high-quality real estate in markets with strong population and job growth,” says John McCarthy, CEO and president of SREIT. “SREIT focuses on markets with strong growth dynamics because they drive occupancies, rents and values upward.”

The Deerwood Park submarket includes St. Johns Town Center and is situated 10 miles southeast of downtown Jacksonville near Interstates 95 and 295. St. Johns Town Center is home to more than 150 restaurants and retailers. According to Cushman & Wakefield, the submarket has the lowest vacancy rate at 9.2 percent in the Butler/Baymeadows region. It also has highest asking rents in the region at $23.87 per square foot.

Wells Fargo provided a $135 million acquisition loan to the borrowers. SREIT, which owns 97 percent of the portfolio, funded the rest of the acquisition. Vanderbilt Office Properties will manage the properties. The seller was not disclosed.

SREIT’s (NYSE: STWD) stock price closed Wednesday at $22.65 per share, up from $21.81 per share May 24, 2018.

— Alex Tostado

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