Regions Southeast | Miami
Nov 14, 2007
By: Amanda Marsh, Associate Editor
Downtown Miami has snagged yet another large office lease in a submarket that has been relatively quiet in 2007 due to a dearth of available space.
For the second time in a little over a week, the submarket has grabbed a significant lease with the signing of Terremark Worldwide to a $15 million-plus, 10-year, 37,000-square-foot deal at One Biscayne Tower. The deal is the submarket's second-largest this year.
Last week, law firm Carlton Fields signed a $40 million-plus, 11-year early lease extension and expansion for 76,900 square feet at Bank of America Tower at International Place, Downtown's largest this year. KPMG International also recently signed a deal to move from One Biscayne Tower to Wachovia Financial Center in 2008, although additional details have not been released.
Miami's central business district--which is made up of the Brickell and Downtown submarkets--has low space availability, so significant leasing opportunities have been limited. Top-tier Class A buildings in the entire CBD have a 2.1 percent vacancy rate, and Downtown's overall vacancy is 7.6 percent., noted Alan Kleber (pictured), senior director of Cushman & Wakefield of Florida Inc, who represented Terremark along with colleagues John Marshall and J.J. Snow Hansen. Brian Gale of Taylor & Mathis Commercial Real Estate represented landlord L&B Institutional.
"There aren’t a lot of large contiguous blocks of space," Kleber noted. "Additionally, there's a lot of pent-up demand with current tenants, so many deals (go to) the first at the finish line. As a tenant rep, you're in a poor position, and we're going to maintain a landlords' market for a while." That said, many tenants on the ground for new space are finding that established tenants have superior rights to available space, which may further squelch deals.
But the three recent deals may be at the forefront of possible flurry of leasing activity as the Miami's CBD enters a new year. "As long as incumbent buildings provide expansion space, 2008 to 2009 will see a decent amount of expansions and early renewals," Kleber said. As last week's Carlton Fields deal shows, many landlords are making a push to get tenants to renew early, as the market is anticipating up to 1.8 million square feet of new Class A office delivery by 2010.
The Terremark deal is also unique in that it bucks a trend of Downtown tenants moving to outer submarkets like Coral Gables and Airport West. The company, which resided in the Coconut Grove submarket, found its flexibility waning as the submarket quickly turned into office condominiums. Downtown also offered amenities attractive to Terremark, namely its close proximity to the Network Access Point of the Americas and the Metro mover.
By: Amanda Marsh, Associate Editor
Downtown Miami has snagged yet another large office lease in a submarket that has been relatively quiet in 2007 due to a dearth of available space. For the second time in a little over a week, the submarket has grabbed a significant lease with the signing of Terremark Worldwide to a $15 million-plus, 10-year, 37,000-square-foot deal at One Biscayne Tower. The deal is the submarket's second-largest this year.
Last week, law firm Carlton Fields signed a $40 million-plus, 11-year early lease extension and expansion for 76,900 square feet at Bank of America Tower at International Place, Downtown's largest this year. KPMG International also recently signed a deal to move from One Biscayne Tower to Wachovia Financial Center in 2008, although additional details have not been released.
Miami's central business district--which is made up of the Brickell and Downtown submarkets--has low space availability, so significant leasing opportunities have been limited. Top-tier Class A buildings in the entire CBD have a 2.1 percent vacancy rate, and Downtown's overall vacancy is 7.6 percent., noted Alan Kleber (pictured), senior director of Cushman & Wakefield of Florida Inc, who represented Terremark along with colleagues John Marshall and J.J. Snow Hansen. Brian Gale of Taylor & Mathis Commercial Real Estate represented landlord L&B Institutional.
"There aren’t a lot of large contiguous blocks of space," Kleber noted. "Additionally, there's a lot of pent-up demand with current tenants, so many deals (go to) the first at the finish line. As a tenant rep, you're in a poor position, and we're going to maintain a landlords' market for a while." That said, many tenants on the ground for new space are finding that established tenants have superior rights to available space, which may further squelch deals.
But the three recent deals may be at the forefront of possible flurry of leasing activity as the Miami's CBD enters a new year. "As long as incumbent buildings provide expansion space, 2008 to 2009 will see a decent amount of expansions and early renewals," Kleber said. As last week's Carlton Fields deal shows, many landlords are making a push to get tenants to renew early, as the market is anticipating up to 1.8 million square feet of new Class A office delivery by 2010.
The Terremark deal is also unique in that it bucks a trend of Downtown tenants moving to outer submarkets like Coral Gables and Airport West. The company, which resided in the Coconut Grove submarket, found its flexibility waning as the submarket quickly turned into office condominiums. Downtown also offered amenities attractive to Terremark, namely its close proximity to the Network Access Point of the Americas and the Metro mover.
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