The West Palm Beach commercial real estate market has seen unprecedented growth over the past year. With its rising population and limited real estate supply, builders and investors have been looking for development opportunities in this vibrant community. Recently, redevelopment plans were announced for some properties in and around Clematis Street, one of the city’s well-known and historic districts. This activity raises the question: Is Clematis Street West Palm Beach’s next real estate investment location?
Clematis Street’s Renaissance
West Palm Beach’s Clematis Street district is known for its historic properties and entertainment features such as live music, bars, restaurants, shopping, art galleries, and nightclubs. In recent years, the district has been the site of city improvement projects and commercial real estate development. With West Palm Beach’s recent commercial expansion and population growth, some investors and developers are looking to renew and reimagine existing structures in this historic city district.
301 Clematis Street and 300 Banyan Blvd
In June, two Clematis Street district properties reportedly sold for $20 million. Both structures are located in the Clematis Waterfront district, a pedestrian-oriented historic retail corridor situated between the waterfront and Rosemary Avenue along Clematis Street. The properties include the 42,263-square-foot Galleria International building located at 301 Clematis Street and a 30,000 square-foot parking lot located adjacent to the building at 300 Banyan Blvd.
West Palm Beach’s Brand Atlantic Real Estate Partners and Wheelock Street Capital purchased the properties. Brand Atlantic recently announced development plans to construct two mixed-use buildings on the sites. According to the announcement, development will take place in two phases. First, the Galleria International building will undergo renovation and historic restoration. According to a recent report, Banyan investors plan to renovate the interior of Galleria International and add high ceilings and large windows. This phase is expected to be completed during the 4th quarter of 2022. The second phase will involve constructing a twelve-story, 100,000 square foot Class A office tower at 300 Banyan Blvd. The complex will also include 3,500 square feet of covered terrace dining for a restaurant planned at the Clematis site. The Banyan property will also have six stories of parking and 10,000 square feet of private outdoor terrace space for office tenants. Phase two is currently scheduled for completion during the fourth quarter of 2023.
According to a recent article, Andrew Dance, Brand Atlantic’s managing partner, commented that the developer’s “decision to invest in this Class A office development was supported by the strong demand for and the limited supply of the type of Class A space being sought after by the investment management firms expanding and relocating to South Florida.” Dance also stated that said, “[Brand Atlantic] see[s] this development as that truly rare opportunity to deliver the best buildings at the best location, and the opportunity and responsibility to help shape the next chapter of Clematis Street as one of the great walkable streets in America.”
More Investment by Morning Calm
In related news, according to a recent report, Boca Raton-based real estate company Morning Calm Management is buying three West Palm Beach office buildings. Two of which are Clematis Street district historic properties. The historic properties are The Comeau, located at 319 Clematis, and The Harvey, located at 224 Datura Street. Both buildings were constructed in 1926 and have since undergone renovations. The third building is the Atrium building located at 324 Datura Street. Morning Calm also owns the former PNC Bank building, a 71,000 square foot structure located at 205 Datura Street. The company acquired the property in 2014 for $14 million and has since completed renovations to its interior and exterior.
The Related Cos. Effect in West Palm Beach
Noted real estate company Related Companies has also made several recent investments in West Palm Beach. Currently, Related is in the process of finishing 360 Rosemary, its new office tower. The tower is reportedly fully leased, and its tenants include multiple well-known private equity and financial firms. According to a recent report, Related recently closed on purchasing three Class A, West Palm Beach office buildings. In January, Related acquired Phillips Point towers for $282 million. In May, the company purchased CityPlace Tower for $175 million, and in June, it bought half ownership interests in West Palm Beach’s Esperanté Corporate Center.
In late July, the New York-based real estate giant closed on another downtown West Palm Beach property—The former Christian Science church property located between 134 and 142 Lakeview Avenue by the Royal Park Bridge. According to a recent report, Related plans to construct a 25-story tower called One Flagler on the site. The new property will offer 250,000 square feet of office space and 16,000 feet of retail. It’s thought that Related’s substantial investment in the city has attracted other real estate development companies into the area.
Raphael Clemente, executive director of West Palm Beach’s Downtown Development Authority, recently commented that he “is encouraged to see new investment in older buildings in and around the downtown.”
Contact the Florida Board Certified Real Estate Attorneys of Rabideau Klein
At Rabideau Klein, we have extensive experience handling multi-million-dollar transactions for high-end commercial real estate in the Town of Palm Beach and Palm Beach County. David E. Klein, Esq. and Guy Rabideau, Esq. are also Florida Bar Board-Certified Real Estate attorneys with the expertise and experience you need to protect your interests during your Palm Beach real estate matter. Contact Rabideau Klein today to discuss your Palm Beach real estate legal needs.