New York City apartment investor buys 21 Century Oncology building

BUYER: 7335 Glad LLC (principal: Alexander Scharf), New York City
SELLER: Paletsky Office Building LLC
PROPERTY: 7335 Gladiolus Drive, Fort Myers
PRICE: $3.95 million
PREVIOUS PRICE: $915,000, April 2003
LAW FIRM ON DEED: Thomas E. Mooney Esq., Fort Myers

PLANS, DESCRIPTION: New York City investor Alexander Scharf purchased the 13,822-square-foot Paletsky Medical Office Building for $3.95 million.

The price equated to $286 per square foot. That figure is higher than the two-year average price per square foot for office space ($120) in Southwest Florida, according to the CoStar Group.

The 8-year-old building is leased to 21st Century Oncology, which years ago purchased the practice of Dr. Steven Paletsky, but not the building. The tenant has seven years remaining on its initial triple-net lease, which obligates it to maintain the building and pay its insurance and taxes.

Mark Alexander of Sperry Van Ness's Fort Myers office represented the seller. Gerard Pastrano of Sperry Van Ness's San Antonio office and Howard Orgel of Westport Commercial Realty Ltd. represented the buyer.

The purchase price equated to a payoff ratio based on income (capitalization rate) of 8.75%.

Alexander says the buyer previously owned only apartment buildings and was looking to diversify into real estate with a better return.

“The market for apartments is so overheated the cap rates are really compressed,” Alexander says. “Medical is always the darling of commercial, but more so now. This was one of the strongest tenants I've seen in all my 84 [medical office] deals.”

Purchase entity 7335 Glad LLC mortgaged the property to Busey Bank for $3 million.