Miami Investor Jon Samuel Acquires $24M West Palm Beach Property from Realty Income REIT
The South Florida commercial real estate market continues to demonstrate resilience and growth potential as Miami-based investor Jon Samuel recently closed on a significant $24 million acquisition in West Palm Beach. This transaction represents another strategic move in Samuel's expanding Florida portfolio and highlights the ongoing evolution of the commercial real estate landscape in 2025.
Strategic Acquisition Transforms Former Auto Dealership Into Public Transit Hub
The 14.7-acre commercial property at 1200 South Congress Avenue has undergone a remarkable transformation from a defunct auto dealership headquarters to a potential cornerstone of Palm Beach County's public transportation infrastructure. Three entities managed by Samuel, who leads the prominent Miami-based Midtown Group, successfully acquired the shuttered car lot property that previously served as the headquarters for the now-bankrupt Off Lease Only dealership.
The 2025 commercial real estate outlook is largely optimistic, with robust performance in the industrial sector and steady retail growth, making this acquisition particularly timely for Samuel's investment strategy. The property features a substantial 50,717-square-foot commercial building complemented by an impressive 1,250 parking spaces, infrastructure that was completed in 2016 and designed to accommodate high-volume operations.
The financing structure of this deal reflects current market conditions, with Samuel securing a $17 million mortgage from Seacoast National Bank, representing approximately 71% of the purchase price. This conservative loan-to-value ratio demonstrates prudent financial management in today's interest rate environment and aligns with lending practices observed across the Florida commercial real estate market.
Palm Beach County's Long-Term Lease Secures Investment Returns
A critical component of this acquisition's success lies in the secured long-term lease agreement with Palm Beach County, which intends to utilize the property as a bus depot for Palm Tran, the county's public transportation system. This government-backed lease arrangement provides Samuel with a stable, creditworthy tenant that significantly reduces investment risk while ensuring predictable cash flow returns.
The transformation of this property from private automotive retail to public transportation infrastructure reflects broader trends in adaptive reuse of commercial real estate. As of January 2025, Florida home values have increased significantly over the past few years, drawing attention and investment from across the country, and commercial properties are experiencing similar appreciation dynamics.
This strategic repurposing also addresses growing municipal needs for expanded public transportation infrastructure, particularly in rapidly growing areas like Palm Beach County. The property's extensive parking capacity and large-scale commercial building make it ideally suited for bus depot operations, vehicle maintenance, and administrative functions.
Realty Income's Divestiture Strategy Reflects REIT Market Dynamics
The seller in this transaction was an affiliate of San Diego-based Realty Income Corporation, one of the largest and most prominent real estate investment trusts (REITs) in the United States. Led by CEO Sumit Roy, Realty Income has been strategically managing its portfolio composition amid evolving market conditions.
In 2025, the company is calling for adjusted funds from operations (FFO) growth that could be as low as 0.7%, indicating the REIT's focus on optimizing existing assets rather than aggressive expansion. This context helps explain why Realty Income was willing to divest the West Palm Beach property, particularly given the complications arising from the original tenant's bankruptcy.
The property's journey to this sale began in 2020 when Dallas-based Spirit Realty Capital (which later merged with Realty Income) initially acquired the property for $22 million from Off Lease Only. The used car dealership continued operating from the location under a lease arrangement until filing for bankruptcy in 2023, creating a complicated situation for the property owner.
When Off Lease Only liquidated its business operations, Spirit Realty found itself among the creditors in the bankruptcy proceedings. The subsequent merger between Spirit Realty and Realty Income in 2024 consolidated ownership under the larger REIT, which then pursued the strategic divestiture to Samuel's group.
Jon Samuel's Expanding Florida Commercial Real Estate Empire
This West Palm Beach acquisition represents just one component of Jon Samuel's increasingly active commercial real estate investment strategy throughout Florida. As one of the original developers behind the transformative mixed-use Midtown Miami district, Samuel brings extensive experience in identifying and capitalizing on strategic real estate opportunities.
Samuel's recent transaction history demonstrates a sophisticated understanding of Florida's commercial real estate market dynamics. In April 2024, he successfully sold a showroom and warehouse property leased to Floor & Décor in Coral Springs for $22.3 million to NorthBridge Partners, an industrial real estate firm with operations spanning Maryland and Massachusetts.
The same month witnessed another significant transaction when Samuel divested Sawgrass Landing, a fully leased shopping center in Sunrise, to Sunny Isles Beach-based SK Realty Management for $30 million. This sale highlighted the continued strength of the retail sector in prime South Florida locations.
Perhaps most notably, Samuel's December 2024 acquisition of a shuttered Sears store in Fort Lauderdale for $28 million demonstrates his willingness to tackle challenging adaptive reuse projects. The big-box store, situated on 18 acres within the struggling Broward Mall, represents a significant redevelopment opportunity in an area controlled by a Barclays U.S. commercial mortgage-backed securities trust.
Market Trends Driving Commercial Real Estate Investment in Florida
South Florida shows continued resilience and growth with its commercial real estate market statistics. It consistently posts below-average vacancy rates and healthy rental rate gains, creating an attractive environment for investors like Samuel. These market fundamentals support the investment thesis behind acquiring properties with stable, long-term lease arrangements.
The broader commercial real estate market in Florida benefits from several key trends that make properties like the West Palm Beach acquisition particularly attractive. Population growth, business relocations, and infrastructure development continue to drive demand for various types of commercial properties throughout the state.
The rise of e-commerce will continue in 2025; its continued popularity could make it a $7 trillion industry, which indirectly benefits properties that can support logistics and transportation operations. The Palm Beach County bus depot lease aligns with this trend by supporting public transportation infrastructure that complements the broader logistics ecosystem.
Insights: Key Questions About This Commercial Real Estate Transaction
What makes this acquisition particularly strategic for Jon Samuel's portfolio?
The combination of a creditworthy government tenant, substantial existing infrastructure, and a below-replacement-cost acquisition price creates multiple value drivers. The property's location in growing Palm Beach County, coupled with its adaptive reuse potential, positions it as a cornerstone asset for long-term appreciation.
How does this transaction reflect current REIT market conditions?
Realty Income's growth will be modest at just 2.2% at the high end of estimates, encouraging the REIT to optimize its portfolio by divesting non-core assets. This creates opportunities for private investors to acquire quality properties at reasonable valuations.
What role does government tenancy play in commercial real estate investment strategies?
Government leases provide exceptional stability and creditworthiness that private sector tenants often cannot match. Palm Beach County's long-term commitment to using this property as a bus depot essentially eliminates tenant default risk while providing predictable cash flows for debt service and returns.
How significant is the financing structure in this deal?
The $17 million mortgage represents conservative leverage that allows Samuel to maintain financial flexibility while benefiting from the current interest rate environment. This 71% loan-to-value ratio demonstrates prudent risk management in today's commercial real estate market.
What does this acquisition suggest about adaptive reuse trends in commercial real estate?
The transformation from automotive retail to public transportation infrastructure exemplifies how smart investors can identify alternative uses for properties that create value for both the community and the investment portfolio. This trend is expected to continue as municipalities seek creative solutions for infrastructure needs.
How does this transaction compare to other recent Florida commercial real estate deals?
The $24 million price point and government tenant arrangement represent solid fundamentals compared to Samuel's other recent transactions. The deal offers more stability than his speculative Sears acquisition while providing better yield potential than fully stabilized retail properties like Sawgrass Landing.
This West Palm Beach acquisition demonstrates the continued evolution and opportunity within Florida's commercial real estate market, positioning Jon Samuel's Midtown Group for sustained growth while supporting essential public infrastructure development in Palm Beach County.
