Phillips Point up for sale again

West Palm waterfront office complex, which sold for $200 million in 2007, could set a sales record.

WEST PALM BEACH — Phillips Point, West Palm Beach’s signature waterfront office complex, is for sale once again. Look for the Class A, trophy complex to sell for a big price, possibly setting a record for Palm Beach County and South Florida.

The 777 S. Flagler Drive center, at the foot of the Royal Palm Bridge, last sold in 2007 for $200 million, smashing previous record sales prices.

But sources expect the 460,000-square-foot, twin-tower property likely will fetch at least a 20 percent premium over the prior sale. That’s about $240 million or roughly $500 per square foot. But it could very well sell for more money than that amount and set a new record.

“There’s a lot of dough chasing these deals,” said Peter Reed, managing partner with Commercial Florida Realty Services in Boca Raton.

Phillips Point was built in 1985 and has an east tower and a west tower. The property is about 90 percent leased. Current owner New York-based Colonnade Properties quietly has begun shopping the property, using the Miami brokerage, Holliday Fenoglio Fowler.

For the past 10 years, Phillips Point has been managed by Hal Friedman, who came to the property from the Esperante Corporate Center across the street.

Friedman and his team have renewed leases or added new tenants to create an enviable roster. Tenants include law firms Gunster, Greenberg Traurig and Akerman Senterfitt & Eidson; investment banks Goldman Sachs and Morgan Stanley Smith Barney; and such companies as AMG and Reyes Holdings.

Rents are pricey. They start at $40 per square foot, with another $18 per square foot in taxes, insurance and maintenance. Parking costs extra, too.

Reed said the site is attractive to institutional tenants seeking a steady income. It is popular with tenants who want great water views, giving it an edge over other Class A buildings, Reed said.

The only threat to Phillips Point’s dominance in the market is new construction, Reed said. Developers, including Palm Beach billionaire Jeff Greene, are working on plans to build new towers, but nothing is underway.

An email offering by HFF said Phillips Point is “irreplaceable,” with its location on the water at the entrance to Palm Beach. However, if such a prime site could be found, the cost to replace the building would exceed $600 per square foot, HFF said.

Phillips Point’s sale is expected to be complete by midyear.