Dealmaker: Mesa West Lends $57M in West Palm Beach, Fla.

Mesa West Capital, Los Angeles, originated a $56.8 million first mortgage that allowed 515 N. Flagler Drive Owner LLC to acquire, renovate and stabilize Northbridge Centre in West Palm Beach, Fla.

The sponsor acquired the 287,000-square-foot Class A office building from Gaedeke Group, Dallas, which owned the building for more than 20 years.

Northbridge Centre sits at the base of Flagler Memorial Bridge near the Palm Beach Yacht Club and the Clematis Street retail corridor. Built in 1987 and renovated in 2002, the building has unobstructed views of the Intracoastal Waterway, Palm Beach and the Atlantic Ocean. It was 71 percent leased at closing.

Mesa West Vice President Russell Frahm said the floating-rate loan will allow the new owner to leverage the asset. The loan includes a future funding component for leasing stabilization costs.

“Downtown West Palm Beach is one of the most institutional and accessible office markets in the Southeast,” Frahm said. “Increased demand and a lack of new supply have resulted in a steady increase in rents and occupancy, which we expect to continue over the next several years.”

Frahm said the sponsor acquired the asset at a cost basis well below competing assets. “Our financing will allow ownership to implement its business plan to capitalize on the improving market,” he said.