A trophy-class office building in downtown Pensacola, Florida, finally sold four years after the buyer's initial offer. The deal, which earned a 2023 CoStar Impact Award, closed amid rising interest rates and lenders shying away from offices as an asset class, but Bayfront Capital was able to secure acquisition financing through its longstanding relationship with ServisFirst Bank.
High-quality irreplaceable assets are not available for sale very often. The seller, an affiliate of Duckworth Realty in Mississippi, had owned the eight-story, 114,960-square-foot building at 125 W. Romana St. for 22 years. Named One Pensacola Plaza, the property has been consistently updated and professionally managed by an in-house team that helped attract many well-respected businesses in the area. At the time of sale, the property was 96% leased.
One Pensacola Plaza is the only curved glass office building in the market, giving it a significant presence among its peers. It also offers panoramic water views of Pensacola Bay and the city's historic downtown, and it is located steps from the Palafox Street retail and restaurant corridor.
While Pensacola boasts an overall office vacancy of less than 3%, the office sector has not been favored by lenders since the pandemic. Financing this acquisition was made even more difficult by rapidly rising interest rates. Bayfront relied on its relationship with ServisFirst Bank to provide debt financing for the acquisition. Bayfront and ServisFirst have completed over a dozen deals together, providing the confidence needed to get the deal done.
About the deal: Reported as the largest ever single-asset office transaction in Escambia County when it closed in August, the sale's $19 million price tag equates to over $165 per square foot.
What the judges said: "Their determination to stay with the deal over the years and push through and find a way to get financing in place for such a large office acquisition makes this very impressive," said Melissa Simpson, an associate at Coldwell Banker Commercial Realty.
"This is a trophy property in the heart of downtown and emblematic of a deal of the year. Price, size, location and time make this a deal worthy of the nomination," said Michael Carro, a principal with SVN Southland Commercial Real Estate.
They made it happen: Stacy Taylor, president of brokerage at Beck Partners in Pensacola.