Crocker, Partners to Add Retail to Office Park Built by IBM

New Residential Development Also May Be Coming to Boca Raton Innovation Campus

The new owners of the Boca Raton Innovation Campus, the sprawling Florida office park built by IBM, say one of the first improvements they make will mean more retail amenities for tenants.

"It will be focused on how to improve people’s lives," Angelo Bianco, managing partner of Crocker Partners, told CoStar News. "So that will be things like a dry cleaner, shoe repair and more food options. We want to totally reshape the cafeteria and food service."

Bianco also said Boca Raton-based Crocker, and partners Rialto Capital and Siguler Guff & Co., also will look at development rights for the 1.8 million-square-foot park at 4800-5002 T Rex Ave.

The ownership group is expected to build more commercial space and add multifamily housing to the campus, giving employees an opportunity to live where they work, according to Bianco.

"We will engage a master planning and design firm to do a long-term master plan, and once we understand that, we’ll figure out what to do next," said Bianco, adding that there are no plans to change the name of the property.

In 1970, IBM developed the 123-acre park along Yamato Road, west of I-95. It was the computer giant's North American research and development plant. Thousands of IBM employees once worked at the facility, but IBM eventually relocated staff to North Carolina and Texas. The company sold the property, and subsequent owners turned it into a multi-tenant business park.

The only previous sale listed in Palm Beach County property records was in June 2005 for $192.7 million to an entity affiliated with the Blackstone Group. In 2015, Blackstone sold the property for an undisclosed price to Farallon Capital Management of San Francisco and New York-based Next Tier HD.

Crocker’s group did not disclose the price it paid, and no deed has been recorded. But Miami-based Rialto, an affiliate of homebuilder Lennar Corp., took out a $148 million mortgage last week, including $76 million for the assumption of outstanding debt, public records show.

The complex is 73 percent occupied. Existing tenants include Shoes for Crews, Conifer Health Solutions, MDVIP Inc., Answer Group and Bluegreen Corp.

Boca Raton Mayor Susan Haynie said earlier this year the owners had discussions with the city about rezoning the park to allow for more residential development.

In 2015, the city rezoned a nearby business park, now called The Park at Broken Sound. The rezoning was designed to accommodate more residential and retail uses in an area that traditionally was an employment base.

Steve Paige, a broker for Reichel Realty in Palm Beach County, said a new development would energize the dated Boca Raton Innovation Campus.

"You’ve got excess land," he said. "I think multifamily is very hot, and all the big players are chasing it. Whether it’s condos or apartments, it should work."

Peter Reed of Commercial Florida Realty Services in Boca Raton, said that having a local owner will be important for the next phase of the property.

Crocker built the mixed-used Mizner Park development in Boca Raton. The firm’s existing holdings include The Plaza and One Town Center office buildings and the mixed-use Boca Center, all in Boca Raton.

With the acquisition of Boca Raton Innovation Campus, Crocker now has a portfolio of 2.9 million square feet. Crocker said it is Florida’s largest Class A office landlord with 6.3 million square feet.

Eastdil Secured represented Farallon and Next Tier in the latest sale, but was not available for comment. The buyers did not utilize third-party broker representation.

See CoStar COMPS #4202509 for additional information on this transaction.

Paul Owers, South Florida Market Reporter  CoStar Group