Prospects for One Brickell Square sale auspicious, say area brokers
By Marilyn Bowden
One Brickell Square, put up for sale this week, should do well in today's market, brokers said, but a deal is not likely to involve an adjacent parcel that was once part of the same development plan.
The 415,000-square-foot, 26-story office tower at 801 Brickell Ave. has a 2001 assessed value of slightly more than $47 million. The attached 9-story parking garage is assessed at $10.8 million.
No price has been established for One Brickell Square, said Carol Nichols, senior managing director in Insignia ESG's New York-based Capital Advisors Group, which is marketing the property.
"This is clearly a class A institutional quality property," she said. "We would anticipate that pension funds, insurance companies, offshore groups and international buyers would be most interested."
Tom Dixon, president of Tom Dixon & Associates, said that in general assessed value is about 85% of market value.
"With large commercial buildings, though, there are a lot of other criteria that come into play," he said. "They're assessed on cost and sell based on their income."
Developed in 1984 by Tishman Speyer Properties for Equitable Life Assurance Society, One Brickell Square was originally conceived as the first of three towers. The other two were planned for the 3-acre lot south of the building, which is now a surface parking lot.
Original site-development orders obtained by Equitable for up to 920,000 square feet of office construction were extended until 2005 by the Miami City Commission, said Jack Lowell, who was in charge of Tishman Speyer's Miami operations when One Brickell was built.
When the first tower opened in 1985, he said, Equitable decided to wait until the market could support more development. In 1994 Equitable sold One Brickell Square to AFA Asset Services, whose principal is Amos Kaminski, for $70.75 million. AFA also owns Brickell Bay Office Tower, 1001 Brickell Bay Drive, and the 1221 Brickell building. Mr. Lowell, then CEO of Summa Properties, was a broker in that transaction.
Equitable held on to the property next door at 845-999 Brickell, Mr. Lowell said. When Australia's Lend Lease bought Equitable's real estate arm in 1997, he said, the undeveloped 3 acres were briefly offered for $11.95 million. But in an abrupt turnaround, Lend Lease announced it would bank the land for future development.
Last year the company put the site back on the market for $18 million. Mr. Lowell, now vice chairman at Codina Realty Services Oncor International, is co-broker for the property.
Ms. Nichols said it could very well be that one buyer would look at the whole property with a view to completing the original plan for more towers.
But Mr. Lowell and Mr. Dixon said they thought that scenario unlikely.
"Usually the buyer groups for a completed building and for a development project are very different," Mr. Dixon said.
Ms. Nichols said occupancy at One Brickell Square is less than 90%. A first quarter office market overview from Cushman & Wakefield puts overall vacancy in the submarket at 12.6%, one of the lowest in Miami-Dade County. However, more than 236,000 square feet is being marketed, the report says, of which 44% is sub-let space, including 75,000 square feet to be vacated by Barclays Bank at Barclays Financial Center on Brickell Avenue. The completion of Espirito Santo Plaza and Four Seasons Tower will add another 485,000 square feet to the Brickell market in 2003.
Local brokers said the property should do well in today's market.
"One Brickell Square is the No. 3 class A building on Brickell," said Douglas Campbell, executive director at Cushman & Wakefield, "after Barclays and 701 Brickell."
He said several tenants have signed for expansions and those that have recently moved out have done so for internal reasons. For example, he said, Atlantic Security had to find new space because of a change in its business model.
Mr. Dixon said instability in the stock market is continuing to fuel interest in real estate among institutional investors.
"It's an excellent property," Mr. Lowell said. "I suspect if given enough time to go through the sales process they will get the price they want."
Some brokers questioned the choice of out-of-state brokers to handle the sale.
Ms. Nichols said she and Kenneth Zakin, the two brokers marketing the property, were responsible for the sale of the former CenTrust Tower, 100 SE Second St., to a pension fund a couple of years ago.
"We are excited about the opportunity of working again in the South Florida marketplace," Ms. Nichols said, "where we have been successful before.
"We believe that the foundation of economics and the demographics in South Florida are positive and bode well for new investors coming into the marketplace."
Locally, Insignia is also handling the leasing of Espirito Santo Plaza and the Barclays Bank sub-let - a concentration in one market drawing criticism from some local agents.
"The two lease obligations represent an extreme conflict of interest," Mr. Campbell said. "Insignia has never in the past been a strong player in the financial services marketplace here in South Florida. I find it strange that they were awarded the disposition of 801 Brickell Ave."