Miami developer Gatsby Florida has closed a $100.4 million refinancing of DiVosta Towers, a fully leased office complex in Palm Beach Gardens, four years after securing a $90 million recapitalization for the 217,208-square-foot property. Cirrus Real Estate Partners supplied the three-year, floating-rate, interest-only loan on the asset, which comprises two 11-story buildings completed in 2020.
Berkadia arranged the debt with a team led by Charles Foschini, Scott Wadler and Shannon Wilson operating from the brokerage's Miami office. The financing underscores continued capital availability for trophy office assets in supply-constrained submarkets, even as the broader sector faces heightened lender scrutiny.
Charles Foschini, senior managing director at Berkadia, said in a statement that office is the most scrutinized asset class in today's lending environment and that refinancing even high-quality properties has become increasingly selective. He added that the asset's full occupancy, institutional-caliber tenancy and location where new supply is effectively constrained made it exactly the type of property lenders are still willing to back.
Located at 3825 and 3835 PGA Boulevard, DiVosta Towers was the first new office development delivered in the Palm Beach Gardens submarket in more than a decade. Anchor tenants include J.P. Morgan Chase, Wealthspire Advisors and Virtu Financial. The property's tenant roster reflects the institutional-grade occupancy that has become a prerequisite for debt in the current cycle.
Wadler added that Palm Beach Gardens has emerged as one of the strongest office submarkets in the country, aided by strong in-migration and massive corporate investments in the West Palm Beach area. According to Wadler, office rents in Palm Beach Gardens are up more than 90 percent over the past decade, a performance metric that distinguishes the submarket from national office trends.
The refinancing provides Gatsby Florida with a lower-cost capital structure on a property the developer has owned since 2020. Isaac Ohebshalom, vice president at Gatsby Florida, said in a statement that since taking ownership of the properties in 2020 and completing the full lease-up and construction of the towers, the firm has been able to attract, and continues to attract, some of the best global firms to the property.
The transaction illustrates a bifurcated office lending market in which full occupancy, new vintage and supply constraints can overcome broader sector headwinds. Floating-rate debt on a three-year term suggests the borrower is positioning for either a sale or a refinancing into fixed-rate capital once rate trajectories stabilize. Cirrus Real Estate Partners did not immediately return a request for comment.
The Palm Beach Gardens submarket continues to benefit from corporate relocations and expansions in South Florida, a trend that has supported both occupancy and rental growth. The lack of new supply in the submarket over the past decade has created a scarcity premium for well-located, institutional-quality office space, a dynamic that underpins lender confidence in properties such as DiVosta Towers.