Posts Tagged : Office

With supply scarce, Doral offices are 91% full, prices rising

With supply scarce, Doral offices are 91% full, prices rising

Week of Thursday, August 3, 2017

By Katherine Lackner

Codina Partners build 8333 Downtown and has three more office buildings on the way in a tight market.

With scare supply and no new product in the pipeline, the Doral office market continues to be robust, observers say.

“Institutional capital now accepts that Doral is a mature, exciting and deep market, and one they want to be in,” said Doug Okun, Senior Vice President at CREC. “It’s become a first-class city.”

The new residential stock “is a driver,” he said, as are the ever-increasing amenities, including retail, schools, restaurants and infrastructure. Most buildings offer plentiful parking, which is not the case in urban markets or even some suburban markets, he said.

With about a 91% occupancy, pressure is being put on lease prices and concessions are becoming rarer, he said. Space in a class A building can fetch $40 per square foot, “which was hard to image five or 10 years ago,” Mr. Okun said. Class B space leases in the high $20s or low $30s per square foot, he said.

Most developers consider mixed-use projects or residential units to be the highest and best use for their land, he said. That, combined with high construction costs, suggest that the dearth of new office buildings will continue, further driving up demand for existing space.

“I remain bullish on the Doral office market,” Mr. Okun said. “I think it will continue to get better, and almost every data point supports that.”

“We are witnessing Doral become more of an urbanized environment,” said Ericka Witkowski, associate with Avison Young. “The ‘live-work-play’ play dynamic, in addition to the already acclaimed economic benefits of leasing in Doral, is really creating the ideal ambience that attracts major corporate headquarters. That will continue to grow this submarket. Doral continues to be one of the most sought-after markets in South Florida, which is attested to by a less-than-9% vacancy rate.”

“County-wide year-to-date leasing activity remains up 6% year-on-year, driven to a notable degree by non-CBD submarkets that had been unsettlingly quiet through 2016,” said JLL’s second-quarter 2017 office market report. One of the larger deals inked that quarter was the Everest Business Funding lease of 27,000 square feet in Downtown Doral, the report noted, but, on the whole, transactions were smaller.

JLL lumps Doral into the Miami Airport submarket, where rents overall are $30 per square foot and vacancy is 9%, according to the report. Class A space in that submarket can be had for $33 per square foot (and the vacancy rate is 8%), while class B space leases for $27 per square foot and the vacancy rate is 11%, the report said.

Coral Gables Sees Mega Deal; Largest of 2016

Coral Gables Sees Mega Deal; Largest Of 2016

MIAMI—The seller more than doubled its money in 11 years.

2121 Ponce includes a five-story, 586-space parking garage and street-level retail space.

MIAMI—It’s the largest commercial real estate transaction in Coral Gables, FL so far this year. A joint venture between Greenstreet Partners just sold the 2121 Ponce office building to a member company of Zurich North America for $57.5 million. Greenstreet acquired the building for 27.1 million in 2005.

Zurich Alternative Asset Management, Zurich’s alternative investment adviser, worked with the buyer on the deal. The sale of the 164,848 square-foot office building marks the latest sign of mounting demand for high-performing South Florida office properties among institutional investors around the world. CREC and CBRE brokered the deal.

“Coral Gables has long been one of South Florida’s most desirable submarkets, and that position will only grow as office users prioritize locations that are walkable and in close proximity to public transit options,” CREC principal Steven Hurwitz, who manages leasing at the building in tandem with CREC’s Doug Okun, tells GlobeSt.com. “2121 Ponce has emerged as one of the neighborhood’s best addresses over the past decade, particularly among companies in the market for space priced slightly below the rates at newer buildings nearby.”

CREC and Greenstreet acquired 2121 Ponce in 2015. Since then, the office asset has seen significant renovations of all common areas. A leasing and marketing program repositioned the building as a boutique, service-oriented option for Coral Gables office users. CREC has worked as the exclusive leasing agent and will continue managing the office asset for the new owner. The property is 95% occupied.

CREC’s Warren Weiser, Harry Blyden, and Andrew Remick co-brokered the sale of 2121 Ponce alongside CBRE’s Christian Lee, Jose Lobon, and Andrew Chilgren. Roy Rosenbaum, director of acquisitions, and Sean Bannon, managing director and head of US real estate, led the way for Zurich.

“Our experience at 2121 Ponce is an example of how a building’s value can be maximized by bringing a clear vision to life through creative leasing, construction, marketing and property management strategies,” says CREC chairman Weiser. “The investments we’ve made over the past decade have transformed the building into a core institutional-grade asset, leading to this sale. We expect similar acquisition activity in the coming months given high barriers to new development across South Florida.”

Located in the Coral Gables business district one block north of the “main and main” intersection of Ponce de Leon Boulevard and Alhambra Circle, 2121 Ponce includes a five-story, 586-space parking garage and street-level retail space. Goldstein Schechter, Fox Latin America, Valley National Bank, the Consulate of Barbados and CREC call the office building home. POC restaurant is located on the building’s ground floor.

The office property’s setting in Coral Gables’ walkable downtown is also appealing to tenants as the $21 million makeover of two of the neighborhood’s main retail thoroughfares, Miracle Mile and Giralda Avenue, gets underway. The submarket is home to more than 150 multinational corporations, more than a dozen luxury hotels, a free public trolley system, and boutiques and restaurants. Eighty-five new eateries opening in the last five years. Meanwhile, more than 1,500 residential units are expected to come online over the next three years.

Seven Office Components Headed for Doral

Responding to market demand, several new office spaces are taking shape in Doral, while there is churn in the market farther east in Waterford, sources say…

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