Miami Beach, Fla., firm pays $15 million for Palm Beach County office property

The Forum, one of Palm Beach County's largest office properties, has been sold on the cheap for about $15 million.

Miami Beach-based GW Partners, headed by Bernard Werner and David Garfinkle, bought the three-building site for $54 a square foot from GE Capital Corp. GE acquired the complex in 1989 when it foreclosed on two loans worth more than $19 million.

Five years ago, when GE started marketing the 10-story buildings, real estate brokers predicted The Forum might fetch $30 million.

The 276,000-square-foot property at Palm Beach Lakes Boulevard and Congress Avenue in West Palm Beach has struggled in the past decade because tenants prefer more upscale suburban markets, such as Palm Beach Gardens, broker Jonathan Satter said.

The vacancy rate along Palm Beach Lakes is around 20 percent, among the highest in the county.

"This was one of the first office buildings not part of the central business district, and in the last 20 years there have been a plethora of suburban buildings built," West Palm Beach broker Hank Porcher said Wednesday.

Ocwen Financial Corp., which occupied most of The Forum before downsizing in recent years, said in June that it's pulling out entirely next spring and moving to a smaller site in West Palm. Even with Ocwen, a mortgage-services company, The Forum is only about 70 percent leased.

But Werner and Garfinkle expect to attract new tenants, mostly professional service firms, with quick deals featuring low-cost rental rates of $18 to $20 a square foot, including expenses.

"What David and Bernie saw here was an opportunity to capture a portion of the (office) market that was not being met," said Jonathan Kingsley, managing director at Grubb & Ellis, which is leasing The Forum for the new owners.

The partners also are planning a renovation of the complex built by developer Llwyd Ecclestone in the 1970s. Before Kingsley and Garfinkle bought The Forum several weeks ago, some real estate observers speculated it's time to raze the buildings and redevelop the site with a residential or retail project.

"It's never going to be the crown jewel it was," Jupiter broker Peter Reed said. "Newer buildings are so much more efficient, but it could serve as good back-office-support type of space."

Garfinkle has turned around distressed properties before, Kingsley said.

He bought, renovated and then sold New World Tower in downtown Miami and the International Building in Fort Lauderdale. Garfinkle also owns another Miami office building and is trying to boost leasing activity there.