Loading...
HomeMy WebLinkAboutDocument Submitted into the Record'FLCE SPACE Broken windows no bar to sale IN Demand for office space in downtown Miami is strongenough' for the owners of 1221 Brickell to put it up for sale before fixing windows damaged by Wilma. • BY MATTHEW HAGGMAN mhaggman@MiamiHerald.com A Brickell Avenue office building that became a symbol of Hurricane: Wilma's destruction when hundreds of its windows were blown out is now up for sale. The decision to sell 1221 Brickell, known to many as the Greenberg Traurig building because the law firm's name is atop the tower, comes: amid increased demand for office property. No new offices have been built in downtown or along Miami'q, Brickell Avenue in recent years yet occupancy rates in existing builings have increased with the strong econ om. - 'Recently, the conditions in the commercial real estate market have shifted," said Sherry Frankel, vice- president of building owner Brickell Equities, in a statement. "The demand from investors looking to acquire this type of real estate is extremely high, which .has prompted our decision to selL" Among other such moves, Ameri- can Ventures Property Fund in Coral Gables recently agreed to sell 15-story 1401 Brickell — an office building a few blocks south of 1221 Brickell in Miami to Madrid -based Testa for $61 million. And Massachusetts -based Brookwood Financial Partners put 30- story New World Tower at 100 Bis= cayne Blvd. in downtown Miami on the sales block. 1221 Brickell, however, is going up for sale while the 27-story building remains in an unsightly state, scarred by sheets of plywood covering hun- dreds of punched out windows. It will be several months before repairs are *TURN TO BIiICKELL, 6C Mt tYtid a� lu a t o ti 1 a, 2ooc, SUBMITTED INTO THE PUBLIC RECORD FOR TEMpJ(. ON3s-o. OFFICE SPACE I. FROM THE FRONT PAGE E.rickeli tome • BRICKELL, FROM IC completed. , Yet tenants within the building have returned to work, the building's lobby was recently renovated, and installation of new windows has started. Several real estate brokers not involved in the sale pre- dicted the hot office market will attract eager buyers despite the damage "Either a new buyer will work through the issues or a new buyer will work through it with the current owner," said Michael T. Fay, president of Colliers Abood Wood -Fay. "It complicates things, but there are so many sophists. cated buyers out there it would get worked out.": Peter R. Harrison, senior vice president of Transwes- tern Commercial Services in Miami, added: "Therll fix the skin. Might as well take advantage of the. capital 'rhas mg very few deals.", ,in recent years, many sites slated tor office construcrioit dential developers to build - new condo towe;s. At",the same time, the higif cost of construction has scared office developers away because pre- vailing rental rates' often aren't enough; to justify the cost of a• new office bniltling. Several developers now plan to build new office tow- ers, but. those projects won't he completed for more than two years Asa result, rental rates'are expected to increase in the -next two years as: the market for office space tightens fur- ther — making office owner- ship ever more attractive. have been snapped up by rest- "We think rental rates will 1 increase by 10 to 20 percent in the next two years because of the shortage," Fay said. J. Daniel Carlo of Holliday Fenoglio Fowler in Coral Gables is marketing 1221 Brickell's sale but he declined '< comment. The office building at 1221 Brickell Avenue has 122,147 square feet of office space. It is currently 73 percent leased, with law firm Greenberg Traurig occupying the most %pace. . The building is owned by linvestment group called rickell Equities, led by Amos Kaminsky of AFA Asset Ser- vices in New York. Kaminsky, whose group purchased 1221 Brickell in 1993, is also part of an invest- ment group that owns Brickell Bay Office Tower at 1001 Brickell Bay Drive in Miami. Submitted Into the public record in connection with item PZ. tL on 3).0-a101- Priscilla A. Thompson City Clerk THE KISS OF WILMA:1221 Brickel1, l 'm as Greenberg Taurig building, is up for sale in spite of 'pending repairs. CHARLESTRAINORI MWII HERALD STAF MIAMI • FRIDAY, MARCH 17, zoo6 — $2.00 VOL. 80, NO. 194 DEVELOPME44T A big vote for offices Investment group has plans for huge commercial complex on Brickell Avenue, with construction to begin before by Oscar Pedro Musibay An investment group plans to make the biggest com- mitment to Miami office construction in years, a com- plex with 952,000 square feet of office space at 600 Brickell Ave. Sherlon Investments plans begin building a 485-foot tower before the end of the decade and start an adjacent 9o3-foot tower to the west in 20tI. Sherlon, which owns the block, received a recommen- dation for approval of the $723 million project from the city zoning board Monday. The plan still must be reviewed by the planning board and _ the City Commission. �. The proposal calls for the des Loretta Cockrum, is Key. - as its real estate consultant, said c tttrolled by Lu Siong Ng, a source who asked not to be identi- ° the developer's permit fied. The focus on office comes as vacan- office space plus 18,000 square feet of retail, 134 resi- dential units and 36o hotel units. Sherlon wants to be a "frontrunner" in terms of office, said attorney Tony Recio of Weiss Serota Helfman Pastoriza Cole & Boniske, which is represent- ing the developer on zing. Calls to Sherlon were not returned. While most developers in downtown Miami `'ate` the financial district are focusing on condos to the exclusion of office space, Recio said, "We don't need any more residen- tial." About 5,00o condo units are planned from the Miami River to Southwest Eighth Street and between Brickell and Miami avenues. Sherlon - ' In See 9 2010 Planned office towers would be the largest built in Miami since r the t98os. 'fie pct would be huge, but the s n r ha eral advantages. �lcstt ought the property for 'tffillion in various transac- sns ro 1990 through 1998. The oierty was assembled before the 'tattoo booty► pushed up land prices. Slierlortlias hired Swire Properties which''built out most of Brickell cy rates shrink to their lowest level in about five years, leasing rates are set - tine records. and only one other major Brickell office project is planned. Park Place . developer Alan Ojeda, who is developing 570,00o square feet of office space in the 33-story Park Place at 145o Brickell Ave., believes the potential rival is overreaching. "If we were inundated companies from the rest of the would say there is a need for square feet, but that is not the ' Ojeda said. He said he has yet to sign `vim for his office project, but het t R ae cussions with a local law firm4:a, financial institutions about moves. He also is building ap on the site. The area is not ready for s,,cr See Office FRIDAY, MARCH 17, zoo6 • DAILY BUSINESS REVIEW • als new office space with annual absorp- tion running at 300,00o square feet along Brickell Avenue and in down- town Miami, Ojeda said. Ojeda said he bought before the bbom in land prices but his margin is still tight because of rising construc- tion costs. Some developers have reported a 4o percent increase in costs during the last 18 months. Sherlon's project also raises logisti- cal issues because of its proximity to the Brickell Avenue bridge and its location among other towers. The nearby Four Seasons is the city's tallest building with 7o floors. An existing six -story building will be knocked down to make way for the new towers, Recio said. The rest of the property has surface parking. The project is planned in two phas- es. The shorter tower would be built first with 49o,126 square feet of Class A office and 14,03o square feet of ground -floor retail. _ The second tower would offer 134 residential units, 36o hotel rooms, 463,483 square feet of office and 3,917 This building on Brickell Avenue will be knocked clown to make way for new office towers. square feet of retail. Construction is scheduled for completion by 2014. The current plan is to rent offices in the first tower for $4o a square foot and retail for $5o a square foot. When it is finished in 2o14, office space in the second tower initially would rent for $5o a square foot and retail for $65 a square foot, according to the developer's economic projections. Eight years from now, the developer projects the average condo sale price of $1.75 million and the hotel room rates "of $600 a nigl}t. Recio said he and developers are "confident" that the building will not prompt objections from federal avia- tion officials who have forced design changes on downtown buildings. Planning Department spokes- woman Luciana Gonzalez said the project would "comply with Miami Dade County aviation regulations for height because they are in a small area that allows such height." The proposal includes 2,17o parking spaces, according to city of Miami records. Bert Checa of Holly Real Estate said that if Ojeda's and Sherlon's offices come onto the market around the same time, they would amount to 12 percent of the 8.3 million square feet of high -end office space for lease in the central business dis- trict. The vacancy rate was 9 percent in the fourth quarter of 2005, down from 14 percent a year before, making it the tightest office market in years, he said. Current lease rates range from $29 to $38 a square foot. Class A landmarks such as the Wachovia Financial Center charge on the higher end. The 55-story landmark built in 1984 has 1.15 million square feet of office space. The last major office building built in Miami was the Four Seasons Hotel & Tower in zoo4. "The market is starving," Checa said. "Within a year the rents have gone up by $6." Traffic congestion could pose an issue • for potential tenants, but the site's location and projections for. unmet office needs offset the nega- tives, he said. Randy Olen, a CB Richard Ellis sen- ior vice president, said existing down- town and Brickell tenants would be eager to move. He discounts traffic and access con- cerns. "They are going into the new build- ings, into the new technology," he said. "This is not overbuilding. This is not an over -reaction. This is pretty sound thinking." • Oscar Pedro Musibay can be reached at amusibay@alm.com or at (305) 347-66Sr. UBMITTED INTO THE PUBLIC RECORD FOR TEMpj ON 343O&.