Aetna Building sells for $55.5 million
A group led by Boca Raton-based IP Capital Partners LLC bought the Aetna Building on Jacksonville's Downtown Southbank on Thursday for $55.5 million.
GV-IP Jacksonville Owner LLC bought the building from SouthShore Group Partners LLC. Bank of America issued a $38.8 million mortgage.
Jason Isaacson is the founding partner and president of IP Capital Partners, a private real estate investment and asset management firm that also owns One Imeson Center in North Jacksonville.
"We are excited for our second acquisition in Jacksonville," Isaacson said in a preliminary statement, saying more comments will be coming. "We look forward to continued investment in the city."
The Daily Record reported Dec. 3 that the sale was expected to be completed by the end of the year.
IP Capital Partners was formed in January 2012 to focus exclusively on co-investing with institutional and high net worth joint venture partners in office, retail and industrial real estate in the major growth areas of Florida.
CBRE Inc. has been marketing the 20-story Southbank tower, often heralded as the tallest building in Florida when it was developed in 1955.
The Daily Record reported Sept. 24 that CBRE was the agent for the owner, SouthShore Group Partners Inc., in listing the almost 495,000-square-foot office building at 841 Prudential Drive.
No listing price was given in an opportunity statement. The building's 2013 certified taxable value was almost $31.5 million and its 2014 market value in progress is $36.5 million.
SouthShore bought the property for $39 million in 2004 from OAIC Jax LLC, which bought the building in 1998 for $36 million from Prudential Insurance Co. of America, according to Duval County property records.
The riverfront building was developed for Prudential Insurance Co., which now occupies a nearby structure built in 1985.
Aetna Inc. bought the Prudential HealthCare business from Prudential in 1999 and consolidated operations at the tower. The building is 22 floors high but counts 20 for leasing purposes.
The offering statement, dated 2013, says the Aetna building is 98 percent leased to 13 tenants, including four major health care related tenants that take up more than 85 percent of the property.
Major tenants include Aetna, Baptist Health System, University of Florida Health Jacksonville and Medical Services Co.
IP Capital says on its ipcappartners.com website that it will pursue Class A and B office, retail and industrial commercial real estate investments in Florida growth markets — Jacksonville, Orlando, Tampa and South Florida.
It says it seeks to identify "value-add" and "opportunistic" properties in the $10 million to $100 million range that have significant potential for appreciation.
It says it identifies a strategy for improving a property long before it is acquired. After acquisition, IP Capital implements operational changes and capital enhancements "to get the most notice with existing and potential new tenants and will implement new operating standards and hire a new leasing company to implement its marketing program and strategy."
It holds the investments for three to seven years.
IP Capital primarily invests through IPCP Florida Realty Value Fund I, which was formed to capitalize on the increasing number of opportunities available in the Florida commercial real estate markets
The opportunity statement, listed under CBRE's capital markets-investment properties, lists Jacksonville brokers Michael Harrell and Louis Nutter, both senior vice presidents, and William Moylan Jr., an executive vice president and partner in Boston.
Moylan heads the CBRE capital markets team in New England.
The opportunity statement calls the property a "Class A landmark office and medical office building in Downtown Jacksonville."
"Excellent amenities, low vacancy and strong fundamentals make the Aetna Building an outstanding source of both immediate and long term cash flow," with a year-one net operating income of $5 million.
"Rarely does a single Class A investment combine a protected Downtown waterfront location, demographic trends that outpace the nation in multiples, and unparalleled industry froth for its tenants," it says.