DWS Group has sold The Alhambra, a two-building office complex in Coral Gables, for $119.6 million as part of its ongoing reduction of office holdings across the United States. The buyers are Lone Star Funds, Square2 Capital led by Jay Caplin, and Highline Real Estate Capital led by David Moret. The purchase includes the 14-story building at 2 Alhambra Plaza and the seven-story building at 95 Merrick Way.
The acquisition was financed with a $98.5 million loan from an entity affiliated with Rialto Capital Management. This debt package includes $58.3 million from DWS’ previous loan, which Rialto assumed, plus an additional $40.2 million in new financing.
The Alhambra complex covers a full city block and totals 326,000 square feet. It is currently about 87 percent leased, according to information released by the buyers. The sale price equates to roughly $367 per square foot. Built in phases in 1961 and 1987, the property sits adjacent to but does not include the Hyatt Regency Coral Gables Hotel.
Square2 Management will take over management of the property moving forward.
JLL’s Hermen Rodriguez and Mathew McCormack represented DWS in the transaction, while another JLL team arranged financing for the buyers.
DWS and its U.S. real estate subsidiary Rreef have been selling off office assets for several years. Last summer, DWS listed The Alhambra with an asking price near $125 million. DWS acquired The Alhambra in 2015 for $118.6 million.
Todd Henderson, head of real estate for the Americas at DWS, told The Real Deal last summer: “Rreef made a policy decision to divest from its office portfolio nationwide even before the pandemic took a toll on occupancies.”
Earlier this year, DWS sold two Fort Lauderdale office properties—Las Olas Centre I & II—for $208 million to Bradford Allen Investment Advisors after buying them for $204 million in 2014. In that same week, Rreef Property Trust sold Bank of America Plaza at Las Olas City Centre for $221 million to Lone Star Funds’ real estate fund VII along with Highline Real Estate Capital and Square2 Capital; Rreef had paid $220 million for it in 2016.
While some firms continue leasing space in South Florida, investment sales activity has slowed due to higher interest rates and increased expenses like insurance costs—factors that have widened bid-ask spreads and lowered property values across markets.
Industry experts note that landlords looking to exit office holdings nationally are more likely to sell properties in South Florida because they can achieve breakeven prices or smaller losses compared to other regions.
In another recent Coral Gables transaction, AEW Capital Management sold Ryder Colonnade at 169 Coral Way to Crescent Real Estate for $70.4 million—a deal representing a discount from AEW’s original purchase price over ten years ago. Meanwhile, Spanish billionaire Amancio Ortega paid cash for Miami’s Sabadell Financial Center last year in what was one of the region’s largest recent office deals.
