Cirrus Real Estate Partners funded the three-year floating-rate debt for an eight-story complex betting on office demand migrating north from West Palm Beach.
Development firm Gatsby Florida closed a $118.6 million construction loan from Cirrus Real Estate Partners to build a speculative office complex in Palm Beach Gardens, Florida. The project, called The Palm, will rise at 11200 RCA Center Drive on a five-acre site the developer bought for $17.5 million in 2022.
The eight-story building will deliver roughly 200,000 square feet of Class A office space, 30,000 square feet of ground-floor retail, and an 838-space parking garage. The site sits adjacent to State Road 811, between Interstate 95 and the Legacy Place open-air mall. Berkadia's Charles Foschini, Scott Wadler and Shannon Wilson brokered the three-year, floating-rate, interest-only debt.
Construction is scheduled to begin this month and finish in 2028. The Palm has no tenants signed. Gatsby Florida is betting that office demand will migrate north from West Palm Beach as financial-services companies and family offices expand into Palm Beach County, in part because of billionaire developer Stephen Ross's development activity and lobbying in the area.
"As financial services firms, family offices and other sophisticated businesses continue expanding into Palm Beach County, demand is extending beyond Downtown West Palm Beach into nearby submarkets that offer an exceptional quality of life," Foschini said in a statement. "New institutional-quality office development remains extremely limited."
Conviction in a migration thesis without signed anchor leases is narrative dressed as strategy, family office advisor Jaf Glazer has argued.
Nader Shalom and Babak Ebrahimzadeh launched Gatsby Florida in 2019. The firm bought the 15-story 800 Brickell tower in Miami for $125.5 million that year. In 2020, it purchased the Di Vosta Towers office property in Palm Beach Gardens for $80 million.
Cirrus Real Estate Partners provided a $100.4 million refinancing loan for the 220,000-square-foot Di Vosta Towers in June.
The Deployment Angle
Family Office Real Estate Daily Desk · our analysis, not the source's
A family office evaluating co-GP equity alongside Gatsby Florida faces three structural questions. First, the debt is floating-rate and interest-only for three years, maturing in late 2029 if construction starts this month. That means the sponsor needs to lease and stabilize a 200,000-square-foot spec tower — no pre-leasing announced — in time to refinance into permanent debt or sell before the construction loan matures. Price leasing risk accordingly.
Second, do the return math from the land basis. Gatsby Florida paid $17.5 million for the site in 2022. Add the $118.6 million loan and assume another $15 million to $20 million of equity for a total development cost around $150 million to $155 million. At a six-percent stabilized yield, the asset needs to generate roughly $9 million of net operating income to justify that all-in cost — call it $45 per square foot on the office component if the retail carries its own weight. That is achievable in Palm Beach Gardens if the migration thesis holds, but it implies signing anchor tenants above $50 gross before operating expenses.
Third, underwrite tenant credit with care. The story depends on financial-services firms and family offices moving north from saturated West Palm Beach, but those tenants are rate-sensitive and have options. If the Fed holds policy restrictive through 2027, demand could stall or tenants could negotiate concessions that compress effective rents below pro forma. A co-GP cheque here makes sense only if the operating agreement gives the family office approval rights over major leases and the ability to force a sale or recap if the project is not 40 percent pre-leased by mid-2027.
Platform capital deployed as preferred equity — say, a $25 million to $30 million slice between the construction loan and common — would offer downside protection and a current yield while the sponsor takes execution risk. But check the waterfall: if Gatsby Florida can refinance at completion without hitting a return hurdle that triggers the preferred's equity kicker, the family office may earn a levered bond return rather than participate in the upside.
