New York-based Related Companies has secured a $243 million construction loan for one of its West Palm Beach, Fla., office projects. The lender was an entity affiliated with MSD Partners, which is owned by Michael Dell, chairman and chief executive officer of Dell Technologies. Financing will go toward the building of One Flagler, a 277,000-square-foot office building located near Royal Park Bridge and overlooking Lake Worth Lagoon.
The mortgage originated by MSD Partners is set to become one of the largest construction loans for a South Florida commercial property in 2022. The only other financing deal that came close to that amount was Terra’s $230 million loan for a mixed-use development near Miami International Airport.
At the time of the deal, One Flagler was 60% pre-leased. By the end of the year, developers expect that number to rise to roughly 75%. The current tenant list includes the likes of First Republic Bank, Siris Capital, private equity fund GTCR and credit asset manager Diameter Capital Partners, as well as Greek seafood restaurant Estiatorio Milos, which anchors the retail section of the building.
The 25-story property was designed by architect David Childs, who has also been involved in projects such as One World Trade Center and 7 Times Square. Slated for completion by 2024, One Flagler lies just west of the First Church of Christ Scientist — a property that came with the 2.5-acre plot that Related had acquired for $20.1 million last year.
Since 2020, Related has become dominant in the West Palm Beach office market, both as a developer and an owner. In terms of owned assets, the company’s portfolio includes Phillips Point, CityPlace Tower and Reflections office properties, as well as a 50% stake in Esperanté Corporate Center. Meanwhile, Related recently added a 20-story property located at 360 Rosemary to its name, in addition to announcing plans for another office construction project at 515 Fern. In fact, the company’s entire portfolio in West Palm Beach has earned it the moniker of the “Wall Street of the South” as a result of its ability to attract out-of-state financial firms.
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