interest rates fuel sales spree in Miami office building market
brokers say brisk sales of smaller office buildings in the Miami area
is the result of a healthy market and favorable interest rates.
to statistics from The Keyes Co., office-building sales in Miami-Dade
County totaled almost $176.87 million during second-quarter 2000,
and accounted for 102 of the 187 office-building sales recorded across
Coral Gables, said William Kerdyk Jr., CEO & president of Kerdyk Real
Estate, the office-building market has been "extremely active."
Mr. Kerdyk's recent office sales are a 7,573-square-foot property
at 262 Almeria Ave., which sold for $1.3 million, and the $720,000
sale of a 6,244-square-foot building at 1828 Ponce de Leon Blvd.
extensively driven by people setting up their own offices," he
said. "These are professional users such as attorneys, doctors,
public relations companies and CPAs.
looking to allow their money to work for them by buying a building
they hope will continue to go up in value."
inventory is low, Mr. Kerdyk said, office properties are in fact appreciating.
have gone up a lot," he said. "Several office properties
are listed for $230-$240 a square foot. The average used to be about
inventory and rising demand work to lower the amount of time it takes
to close a transaction from an average 135 days to 60-75 days, he
many people are looking for buildings right now," he said. "For
a lot of them its relocations from downtown."
relatively low interest rates. Mr. Kerdyk said, "the mentality
in general has been getting away from leasing and towards purchasing.
may look for a building where they can use half and lease out half,
in anticipation that they could grow into the whole space. In the
meantime, it helps pay their mortgage."
Redlich of ComReal in Miami agreed that relatively low interest rates
are fueling sales of all types of real estate, not just office space.
been in real estate for about 15 years and in commercial banking for
18 years before that," he said. "I've never seen such a
ComReal's recent transactions are the sale of an 11,700-square-foot
office building at 2441 NW 93rd Ave. for $825,000.
there may be a slight increase in the demand for office space, Mr.
Redlich said, due to changes in the way companies do business.
used to be that a product might be made in Atlanta and shipped to
a warehouse here for distribution locally," he said. "But
now it's shipped directly to the store or even the user. So generally,
there's less need for warehousing and more for office space."
most buyers plan to use the space for their own businesses, he said,
"recently there's been an influx of people from Colombia and
Venezuela who are seeking a safe place to invest their money. They
may also plan on going in to business, but that is a secondary consideration."
Lee, a vice president at Miami's Aztec Group, said he thinks any boost
in sales of office properties is a temporary phenomenon brought on
by lower interest rates.
Lee recently negotiated the $4.3 million sale of the 55,000-square-foot
Park Centre, 1111 Park Centre Blvd., to Westfield Financial.
the case of that sale, he said, seller Park Centre Investments, an
affiliate of Panther Real Estate, had bought the building as an investment
in April 1999.
they bought it, it had been suffering from poor management and inattentive
ownership," Mr. Lee said. "They leased it up and sold it
as a full property. That's what Panther does. And what Westfield does
is to buy fully operative buildings.
a pent-up demand," he said. "The majority of people who
have been planning on selling will, as a result of the change of rates."