Miami Heads to icy Northeast to lure businesses

By: Catherine Lackner

Miami News Today

Representatives if Miami’s Downtown Development Authority, the Beacon Council, and the Greater Miami Convention and Visitors Bureau were schedules to venture to the frozen Northeast (temperatures predicted in the 20s and 30s) this week to pitch Miami’s case.

 

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Downtown Miami’s office market is diversifying: That’s good news for our local economy

By Danet Linares
January 25, 2019

Miami’s pursuit of Amazon thrust our region’s technology sector to the forefront, but new data from the Miami Downtown Development Authority indicate that tech companies have been eyeing our urban core as a viable home base for years.

The DDA’s newly released office sector survey, which tracked market activity over the past five years, found that 72 percent of all new-to-market technology firms coming to Greater Miami are settling in Downtown.

This metric is just one example of how our region’s largest office market is becoming more diverse as new industries set their sights on our city, lured by favorable demographics, an improved transit system, a variety of housing options, and significant cost advantages compared to other gateway cities.

Our Downtown office market comprises more than 22 million square feet of rentable space, amounting to Florida’s most significant employment hub and one of its primary economic engines. All told, over 250,000 people spend their weekdays in our urban core — more than ever before.

A quick survey of the market’s tenant list is a “who’s who” of the business world, with brands like Royal Caribbean, JP Morgan Chase, HIG Capital, Fortress Investment Group, Mastercard, Facebook and Porsche calling Downtown Miami home.

The Downtown office market has historically been dominated by a handful of sectors, most notably law and professional services, real estate, and banking and finance. In fact, Downtown is home to the highest concentration of financial institutions in the United States outside of New York, including 60 international banks, 100 alternate investment firms, and regional headquarters for four of the world’s largest accounting firms.

While these industries still occupy most of the space in Downtown, the DDA study found that our tenant base is becoming more varied. Notably, the past few years have seen an uptick in the number of tech, hospitality and media companies leasing space. Together, these three sectors have accounted for 38 percent of all new-to-market leases signed since 2013.

Recent examples of tenants that have relocated to Downtown from out-of-town or from other markets in South Florida include the CONCACAF soccer association, Cisneros, Google, Uber, Viacom/MTV, and I-Squared Capital. Two of the country’s largest operators of co-working space — WeWork and Regus — are also expanding in our Downtown.

Given Downtown Miami’s evolution from a 9-to-5 business district into a thriving 24/7 residential and commercial neighborhood over the past decade, these dynamics shouldn’t come as a surprise. For the first time, our urban core offers companies and their employees a walkable district that is densely populated and home to a range of housing, dining and entertainment options.

These factors are becoming more important as employees gravitate toward job opportunities in close proximity to their home.

A series of improvements in the urban core — from new transportation options and public parks, to the debut of cultural outlets and improved pedestrian access — have coincided with stability in the office market. Average occupancy levels, rental rates and tenant renewal rates are at their highest points in years, driven by pricing that remains well below that of places like New York, Washington, D.C., and San Francisco.

There’s reason for continued optimism.

The launch of Virgin Trains’ service into Downtown in 2018, coupled with the planned connection to Tri-Rail this year, will make commuting from points north even easier while significantly broadening our workforce.

Few downtowns in the country can compete when it comes to location. From an accessibility standpoint, office users are placing immense value on the fact that our Downtown is right off I-95, minutes away Miami Beach and Miami International Airport, and adjacent to PortMiami.

The advent of new arts and culture venues within the past decade has greatly enhanced quality of life in Downtown, with the Adrienne Arsht Center, Pérez Art Museum Miami, Frost Science Museum, and ArtMiami earning high praise among companies surveying the market.

Likewise, mixed-use developments such as Brickell City Centre, MiamiCentral and Miami Worldcenter are enhancing Downtown’s stature as a shopping, dining and entertainment destination.

The next chapter in Downtown Miami’s story will be centered on sustaining commercial and residential growth through investments in mobility, walkability and education, ensuring Downtown remains a desirable place to live and work. Projects like The Underline, the Downtown Baywalk and the renovation of Flagler Street will be welcomed additions.

As Miami’s urban core strengthens its appeal as a vibrant neighborhood that is home to a growing number of companies and residents, our Downtown office market is becoming more diverse. The result is a healthier, more resilient local economy.

 

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Downtown Miami: No Longer 9 to 5

By David Wilkening
December 28, 2018

Perhaps it is not surprising the area’s office market is changing but it may be news to some that downtown’s population now of 250,000 has helped it evolve from a daytime business market into a 24-hour live-work-play city.

This shift has led to major transit improvements (including the launch of high-speed rail and a free trolley service); the rise of the neighborhood’s bar and restaurant scene; and billions of dollars in new mixed-used development.

So says Miami DDA (Downtown Development Authority) in their study on office leasing trends in the past five years.

“Downtown Miami has long been a preferred location for multinational companies seeking access to North America, South America and Europe, and we’re increasingly seeing domestic firms enter the market as we improve our urban infrastructure, welcome new residential options, and cultivate a strong entertainment and hospitality scene,” explains Miami DDA Board Member Danet Linares.

Also Vice Chairman of Blanca Commercial Real Estate Inc., she adds: “Our downtown neighborhood is now viewed as a true live, work, play district and the result is an office market that has stabilized and is becoming more diverse.”

Some key study findings

• More than 6.3 million square feet of office space was leased in Downtown Miami since 2013, with finance, banking, law and real estate tenants accounting for over 60 percent of all lease activity.

• Tech firms are catching up. Altogether, 72 percent of the new-to-market tech and innovation firms leasing space in Greater Miami are selecting the urban core.

• Approximately 58 percent of companies entering the Miami market for the first time choose to locate downtown, “drawn by the neighborhood’s strong quality of life component, walkability and transit connections,” the study says.

• Tenant renewals are driving leasing activity, with 89% of downtown users staying in place and/or expanding their office when faced with an expiring lease. “This stability has fueled the rapid growth of downtown’s daytime population, which now exceeds 250,000 people,” the report says.

• Average rents for Class-A space have climbed nearly 15 percent since 2013 but remain affordable by comparison with other gateway cities in the U.S., such as New York, Boston, and San Francisco, according to the study.

• Downtown Miami has the highest concentration of banks and financial institutions outside of Manhattan.

 

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One Cocowalk signs co-working operator, Spaces, as anchor tenant

Blanca Commercial Real Estate, Florida’s leading independently owned commercial real estate brokerage firm, today announced its rehiring of David M. Valdez who rejoins the firm as a Senior Vice President and Chief Operations Director for the firm’s tenant advisory and brokerage services practice.

Downtown Miami Office Buildings Landing More Tech Companies

Miami didn’t land Amazon.com’s massive second headquarters, but the city’s downtown has attracted a larger share of technology companies in recent years, according to a new study of the office  market by the Downtown Development Authority (DDA).

The annual report was produced by the Miami DDA in conjunction with Cushman & Wakefield. From 2013 through the first quarter of  2018, over 700,000 of office leases were signed by new-to-market firms in downtown Miami, representing 58 percent of all new-to-market leases in Miami-Dade County.

For technology firms, downtown Miami attracted 72 percent of the new-to-market leases countywide. That includes offices for Facebook, Uber, Twitter, Expedia, and Google, said Danet Linares,  vice chair of Blanca Commercial Real Estate and leader of the DDA’s office market advisory group.

County business leaders have been trying to attract more high-paying tech jobs. Although it has made progress, Miami still trails cities such as New York, Boston, San Francisco and Washington, D.C. as a tech hub.

Technology companies made up 19 percent of the new-to-market leases in downtown Miami from 2013 through the first quarter of 2018. Linares said downtown is the ideal environment for many tech firms because it very walkable, there’s plenty of housing, a young population, public transportation, and plenty of restaurants.

“They will make decisions based on quality of life issues,” Linares said.

However, tech companies accounted for only 6 percent of all office leases signed downtown since 2013, compared to 26 percent for law firms, 16 percent for financial services, 11 percent for healthcare, 11 percent for real estate firms, and 10 percent for banking.

Downtown Miami is home to the largest concentration of banks and financial institutions outside of Manhattan, according to the DDA study. It boast 60 international banks, 100 alternative investment firms, and offices of four of the world’s largest accounting firms.

Office rents in downtown Miami have been increasing in Class A buildings in recent years, Linares said. The office vacancy rate downtown has increased slightly to 14 percent, but Linares said that’s a positive given that two major office buildings — Brickell City Centre and MiamiCentral — were recently delivered. Brickell City Centre’s office is fully leased while MiamiCentral is nearly full, she added.

“We have a few buildings in the pipeline to be constructed and they are talking to companies looking for 60,000 to 100,000 square feet of space,” Linares said.

By Brian Bandell, Senior Reporter
South Florida Business Journal

Flagler Street upgrade downtown delayed once again

By Catherine Lackner
October 24, 2017

The glacial pace of Flagler Street’s renovation downtown has built frustration since the project was proposed in 2011. Last week, directors of Miami’s Downtown Development Authority agreed to another delay, this one for three months. Supporters say it’s a good thing.

“The task force is recommending a 90-day pause,” said Brian Alonso, who co-chairs the Flagler Street Task Force with Neisen Kasdin, authority vice chair and office-managing partner of Akerman LLP. “And, based on the history, this was not taken lightly.”

Moishe Mana, who has invested in Wynwood and bought a portfolio of Flagler Street properties, wants to study with his architect, Bernard Zyscovich, a possible incorporation of cobblestones into the driving surface, said Mr. Alonso, a principal in his family’s real estate business.

Mr. Mana will pay for the study, which comes as the project is between contractors. The city fired the first, F.H. Paschen; Lanzo Construction has been chosen to continue the work but isn’t under contract yet. The board didn’t discuss whether Mr. Mana would contribute to the upgrade if the study finds incorporating the pavers is the way to proceed.

Adding cobblestone would probably require drainage changes and add engineering challenges, so reconstruction can’t go forward in tandem with the study, said board and Flagler Task Force member Gary Ressler, a principal of the Tilia family of companies, which owns the historic Alfred I. Dupont Building at 169 E Flagler St.

“90 days?” asked board member Danet Linares, executive vice president of Blanca Commercial Real Estate. “We’ve already lost so much time. And this is coming at the 11th hour.”

Mr. Mana is the street’s largest stakeholder, said Ken Russell, authority chair and Miami commissioner, and it’s appropriate that he weigh in on the project.

Construction began in early 2016, but only one block has been finished. Authority members faulted Miami’s Office of Capital Improvements for not supervising the contractor. Multiple problems at the jobsite have include a maze of underground utilities that didn’t conform to site maps and other unforeseen obstacles.

The project began before Mr. Mana acquired his properties, Mr. Ressler said. “Mana is now the largest property owner on Flagler, and he is passionate about the street’s success.” The street is already shut down and there is usually a construction moratorium in November and December for the holidays, he said.

“It’s a moment in between,” Mr. Zyscovich said. “It’s three months at no cost to the city, to see if this is worth doing, and it’s the last possible moment” to make such a large-scale change before reconstruction resumes.

“Does the city accept?” asked board member Jerome Hollo, vice president of Florida East Coast Realty.

“We don’t object,” said Jeovanny Rodriguez, director of the Capital Improvement Program. “We realize it’s going to take time; there’s a question of the impact on utilities. We can’t do the construction at the same time.”

“It’s a matter of doing it right versus doing it fast,” Mr. Russell said. “I really trust the task force; they’re the stakeholders on the street.” Directors agreed, and unanimously approved the pause.

 

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South Florida lease roundup: Doral Logistics Center fills up & more

New leases also at the Miramar Park of Commerce and Royal Palm Office Park

August 2, 2017

Clockwise from top left, Miramar Park of Commerce, Royal Palm Office Park and Doral Logistics Center


Doral Logistics Center fully leased

The Doral Logistics Center, a 174,024-square-foot industrial complex, is 100 percent leased after an aircraft supply company leased the remaining 88,680 square feet, Transwestern announced.

Parts supplier NexGen Aero LLC will move into the south side of the building at 2900 Northwest 112th Avenue in Doral.

The landlord, Seagis Property Group, was represented by Transwestern’s Thomas Kresse, Walter Byrd and Ben Eisenberg, and Carlos Gaviria, according to a release. Wayne Schuchts, of Avison Young, represented the tenant.

Seagis Property Group owns about 10 million square feet of industrial real estate in South Florida, New Jersey and New York.

Miramar Park of Commerce gets 150,000 square feet of new leases, renewals and extensions

The Miramar Park of Commerce, a 5-million-square-foot business park, just announced three new leases, five lease renewals and three expansions. Sunbeam Properties & Development represented the park in the transactions. Cyborg Instruments, an online European furniture distributer signed a lease for 26,976 square feet of space in building MPC-7C at 3930 Executive Way in Miramar.

Roses Delight, a warehouse and distribution center for healthcare products, canned and dry foods, paper and disposables, leased 11,640 square feet of space in building MPC-11C at 2721 North Commerce Parkway.

Blue Wave Communications, a technology and cable company, leased 7,400 square feet of space in building MPC-2A at 10330 USA Today Way. Broker and global freight forwarder Promptus, LLC renewed its lease for 29,094 square feet, and corrections-related services company JPay, Inc., renewed its 24,487-square-foot lease.

Kone, Inc., represented by Gregg Raus of JLL, signed the largest lease extension. The elevator and escalator company extended its lease for 18,959 square feet of space at 3421 Enterprise Way. Its location at the Miramar Park of Commerce serves as an office, warehouse and distribution center for associated parts.

The Miramar Park of Commerce has about 180 tenants and 5.2 million square feet of warehouse and office space.

Royal Palm Office Park in Plantation gets 54,603 square feet of new-to-market and renewed leases

Royal Palm Office Park, a 465,592-square-foot office park in Plantation, announced 54,603 square feet of new-to-market and renewed leased space at the office park, according to a release. Blanca Commercial Real Estate’s Tere Blanca, Danet Linares, and Flavia Eternod represented the landlord. According to LoopNet, asking rents are $26.50 per square foot.

Brookfield Hospitality Properties, an arm of Brookfield Asset Management based in New York inked a 40,310-square-foot lease space at the park. Other tenants include iConstructors, a Tampa-based construction company, and Province, which will lease 2,093 square feet. In total, 44,242 square feet of new leases were signed at the park at 900 and 1000 South Pine Island Road.

Lease renewals include the party rental space The Daily Room and accounting firm Rosenbaum Sobel, PA.

The Lincoln Property Co., a Dallas, Texas-based real estate investment firm, bought the park from Duke Realty for $128 million in August 2014. — Amanda Rabines

 

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Stearns Weaver Miller to open office in Coral Gables

By Brian Bandell
July 31, 2017

Stearns Weaver Miller, one of South Florida’s largest law firms, will open a new office in the new 2020 Salzedo mixed-use building in Coral Gables.

The firm signed a 3,000-square-foot lease for the penthouse space in the building with developer Codina Partners. Danet Linares of Blanca Commercial Real Estate represented the landlord in the deal.

Stearns Weaver Miller currently has offices in downtown Miami, Fort Launderdale, Tampa and Tallahassee. It ranked No. 9 on the Business Journal’s Law Firms list with 98 South Florida attorneys.

Armando Codina, executive chairman of Codina Partners, is a rare breed – a visionary who delivers more than he promises,” said Eugene Stearns, board chair and shareholder at Stearns Weaver Miller. “We listened to him more than 30 years ago when he asked us to move our then-small law firm to the other side of town in Museum Tower. Looking back on it that was a pivotal decision in our lives. We have since grown into a successful statewide law firm headquartered in the building Armando built. Now for our second Dade County office, we join Armando on the other side of Coral Gables at 2020 Salzedo.”

Codina Partners and its affiliates CC Homes and CC Residential are also tenants in 2020 Salzedo, which has its 49,379 square feet of office space 95 percent leased. The building also has 213 apartments and 6,882 square feet of retail. Pastry chef Antonio Bachour will open a restaurant and bakery on the ground floor.

“We are proud to help companies establish operations at 2020 Salzedo, a centrally located, luxury property that will enable their next phase of growth,” Linares said.

Stearns Weaver Miller Weissler Alhadeff & Sitterson is the No. 8 law firm in Southeast Florida by number of lawyers and partners, according to the South Florida Business Journal‘s 2017 Book of Lists.

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INSTITUTIONALS REMAIN BULLISH ON DOWNTOWN MIAMI OFFICE

May 27, 2016
As Sumitomo shells out $220M for Miami Tower and JPMorgan stakes a for-sale sign on Southeast Financial Center in a transaction that could exceed $500M, some Miami office experts say it’s still a good time to be an institutional investor here.

Even with sub-5% cap rates on some transactions, “there’s a very good demand for Class-A office buildings in Central and Downtown Miami,” says Aztec Group CEO Ezra Katz (on right with Jason Katz), a Miami-area investor who has placed bets with other sponsors all over the Southeast. “I believe that the Miami Downtown and Brickell market will continue to improve and will get higher rents in the next several years,” he tells us.

The area’s office fundamentals seem to bear that out. With just over an 11% vacancy rate, Downtown Miami’s average rents are clocking more than $40/SF, fueled by Brickell’s office demand—far above the rest of Miami’s office submarkets. Still, there’s some stress: With 305k SF delivered so far this year and another 1M SF underway—mainly in Brickell City Centre—absorption last quarter took a beating by 100k SF, according to Colliers International. “A trend of signed leases in the first quarter of 2016 have been notably smaller in size and the pace of total office leasing activity slowed, thus significantly reducing absorption levels,” Colliers analysts state in a report. Deals of note so far include Sitel’s 21k SF deal at Brickell World Plaza and Coty’s 12k SF renewal at Brickell Office Plaza, and Akerman’s big move-in to 111k SF at Three Brickell City Centre in January.

That hasn’t deterred investors, though. NY-based Brickman paid $27.5M for Courthouse Tower in Downtown Miami; and Triarch Capital Group slapped down $74M for Doral Costa office park from TA Realty, according to Colliers.Ezra says even the addition of 1M SF to Miami’s office market will barely move the needle on total supply in the minds of institutional investors. “I think that there is clearly a lack of new office space,” he says.

Blanca Commercial Real Estate head Tere Blanca says Brickell is the real winner here, netting 300k SF of the 470k SF of deals this year so far. And that’s indicative of Miami’s urbanization, where companies are flocking to the urban core to be closer to a young talent pool. “You cannot define Miami by its history,” Tere says. “What’s happened here in the last five years is unprecedented. We have doubled the population in the urban core in less than a decade.”

If there’s one chink in the office occupancy armor, it’s Downtown Miami (taking out Brickell), which still lags with 19% office vacancy, according to Blanca Commercial Real Estate. But that may be a short-lived problem. As space continues to tighten and rents jump even higher in Brickell—for instance, Tere tells us 1450 Brickell is hitting new lease highs of $58 to $63/SF—that should push some of the activity northward to Downtown.

Brickell and Downtown will be featured topics of conversation 7:30am, June 23 at our Evolution of Brickell & Downtown Miami event at 90 SW 8th St with an all-star panel that includes 13th Floor Investments’ Arnaud Karsenti (here), Royal Palm Cos CEO Dan Kodsi, Blanca Commercial Real Estate’s Danet Linares, One Real Estate Investment’s Jeronimo Hirschfeld and Miami DDA’s
Alyson Robertson. Sign up here.

 

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New tenants and expansion in Doral office building could create 200 jobs

Five companies have opened new locations and another firm has expanded in the One Park Square office building in Doral.

This recent leasing activity in the building, at 3470 N.W. 82nd Ave., should create about 200 jobs based on the floor plates of the companies, Blanca Commercial Real Estate CEO Tere Blanca said. She teamed with her firm’s Danet Linares and Andres Del Corral to broker the leases on behalf of landlord New Boston Fund.

Blanca said the recent opening of CityPlace Doral, which includes residential, restaurants, The Fresh Market, shops, a bowling alley and a CineBistro dine-in movie theater, has made the nearby building more attractive for tenants.

“This has become a very urban environment connected to amenities,” Blanca said. “It’s an exciting time for Doral, the city, and this particular office building.”

Amadeus North America, a technology firm that specializes in the travel booking industry, increased its square footage in One Park Square by 9,800 to reach 115,000. It has been in the building since 2012. Its parent company is based in Spain

Sysmex leased 10,000 square feet in the building. The Japan-based company develops, manufactures and sells medical equipment worldwide.

Legacy Fitness signed a 5,700-square- foot lease for a physical therapy center on the ground floor.

Also on the ground floor, Vivere Furniture leased 4,500 square feet for a showroom. The company sells Brazilian-made furniture.

Orem, Utah-based Unicity, a manufacturer of nutritional products, leased 4,100 square feet. Its website lists the location as a distribution center.

Finally, Great Play leased 3,400 square feet for what its website describes as an “interactive gym for kids.” Jyl and Keith Camhi opened the first Great Play gym in Stamford, Connecticut, in 2006.

Blanca said the 281,000-square- foot office building is now over 93 percent leased.