Office hunters grab up downtown space
By Marilyn Bowden
Large-scale lease transactions brought a major new tenant to the downtown area and secured several key renewals well past the delivery date of the new buildings in the wings.
Coconut Grove-based Terremark Worldwide, developers of the NAP of the Americas, relocated from SBS Tower in Coconut Grove to downtown Miami's One Biscayne office tower in a relocation valued at more than $15 million, said Cushman & Wakefield Senior Director Alan Kleber, who represented the telecommunications giant in the deal.
SBS Tower announced a conversion to condo space a couple of years ago, but some unsold space is now being marketed for lease, according to several market reports.
"Terremark didn't want to buy their space," Mr. Kleber said, "and though they had an option to lease at SBS Tower, one of their key drivers was to be proximate to the NAP. So ideally they wanted to be downtown."
The move will also involve an expansion from 20,000 square feet to 37,000, he said.
Finding that amount of space in a very tight market involved taking advantage of an unexpected opportunity.
"What happened was KPMG was going to renew," said Brian Gale, managing director of Taylor Mathis, which leases One Biscayne tower, "when all of sudden they went to Wachovia Financial Tower instead. The same day I called the broker for Terremark, and five weeks later we signed to lease. It was the quickest deal of that size I have ever done."
Terremark is now the building's largest tenant, he said.
Mr. Gale said Pathman Lewis law firm inked a 10,000-square-foot renewal and expansion at One Biscayne. In August, Astar Air Cargo signed for 8,891 square feet, and NL Communications took 16,500 square feet, between them filling the space vacated by Credit Suisse.
That brings occupancy at the property to 95%. Several leases will roll over in 2009, Mr. Gale said, "and we are talking to a lot of the tenants now."
The law firm Carlton Fields has signed an 11-year lease valued at more than $40 million to remain at Bank of America Tower at International Place, said Danet Linares, who handles leasing there.
The firm is currently in 56,000 square feet, she said, and will gradually expand to 76,000 square feet over the next three years as other leases in the building expire.
"That secures one of our largest tenants for the next decade while other buildings are being delivered," Ms. Linares said.
Bank of America Tower is home to UBS, whose lease is up in the middle of 2009, and Bank of America, expiring at the end of 2009. Both are considered candidates for the three new class A buildings under construction in the downtown-Brickell market, but with delivery dates announced for mid 2009 to early 2010, timing will be key.
New World Tower has recently signed several transactions, said Jones Lang LaSalle's Grant Killingsworth, who leases the building with Jones Lang LaSalle's Scott Strickland.
"We renewed the anchor tenant, the architectural firm Zyscovich, for more than 27,000 square feet," Mr. Killingsworth said. "We signed a lease for LVMH's Latin American headquarters for 17,000 square feet, and GSA took more than 10,000 square feet for administrative offices."
LVMH, whose portfolio includes Moet & Chandon, Louis Vuitton, Dior, Sephora and Fendi, was formerly at 1200 Brickell, another condo conversion project.
"We now have only one full floor remaining," he said. "We've been able to put in some very high-profile and strong credit tenants. This is a solid class B building."
New World Tower, which traded less than a year ago, has been put back on the market again after major renovations. It's one of two for sale in the downtown area. The other is Sun Trust International Center, which Mr. Strickland is marketing.
"It's hard to find a class A building in Miami that hasn't sold in the past five or six years," he said.
Peckar & Abramson law firm recently signed a renewal and expansion for 19,875 square feet at Sun Trust, said Michael Taylor of Stiles Corp., the building's broker.
"We are 95% occupied right now," he said, "and we don't have significant rollover in the next two years."