Airport area projects adding 700,000 feet of class A space
By Sherri C. Ranta
More than 700,000 square feet of new class A office space is expected to become available in the Airport West area this year with the completion of projects by Hogan Group, Trammell Crow Co., Codina Group and Opus South Corp.
The space will bulk up the supply for West Dade and the Airport area, said Dick Neve, regional vice president for Hogan, developers and managers of the massive Waterford at Blue Lagoon office park.
"How long it will take to lease is the unknown factor," Mr Neve said. "There will be quite a bit of space. It will be a very competitive market here."
Richard Schuchts, associate with Codina Realty Services Oncor International, said he has no concerns about finding tenants for Codina's Westside Plaza III, a 105,000-square-foot, four-story building in Westside Corporate Park that will be ready for occupants by month's end.
"There was a large surge of office space in 1999," Mr. Schuchts said. "Now we're seeing a second wave of new development coming on. Last year, all the new construction from 1999 was completely absorbed. It's a very health market and nice to see."
Doral & Airport West Chamber of Commerce President Art Walker said economic slowdowns here and abroad have not affected growth in the area, which is home to many large national and international corporations with ties to Latin America.
"As of now, the economy of the Doral area is the most resilient of any area in South Florida. Indications are that it will continue this way for some time," Mr. Walker said.
Developers in the Airport West area have built many office projects on a speculative basis in recent years, sharing a common belief build it and they will come. And that's just what happened, Mr. Schuchts said. Last year, about 800,000 square feet of office space was leased in that market, he said.
While prospective tenants in the dot-com sector have fallen off, the telecommunications and Internet infrastructure sector of the high-tech market is doing well in the Airport West area, he said.
Many telecom companies went into industrial space in the Airport West market at a time the cargo sector had difficulties. Historically, Mr. Schuchts said, the Airport West market served the cargo needs of the airport. Telecom picked up the slack there, but that market has begun to slow as well, he said.
Mr. Schuchts said developers are looking now to large national and international companies needing regional or headquarters offices in Miami as a base for operations in Latin America. These companies, he said, are looking to lease large blocks of space and appreciate the comparatively large amount of parking associated with Airport West office buildings.
The Airport West area is home to the 250-acre Waterford at Blue Lagoon. As of May 15, the park will open the 703 building, a 10-story, 247,000-square-foot facility that is a twin of the 701 building, now about 92% leased, Mr. Neve said.
He said two full-floor leases in the 703 building are expected to be signed soon and a third full-floor lease is also in negotiation.
"The activity is good. We're optimistic by this summer we'll have the building 50% leased," Mr. Neve said.
Tenants in the 701 building include Caterpillar Latin America, FedEx Latin America and LHS Software. The park is about 94% leased, he said.
Mr. Neve said the planning and permitting phase for the proposed 1000 building a 10-story, 255,000-square-foot facility to rise beside the Hotel Sofitel Miami is already under way.
Next spring, Waterford owner Teachers Insurance & Annuity will analyze the market and occupancy rates in the 703 building before moving ahead with the new project, Mr. Neve said.
Trammell Crow Co. will open the first phase 150,000 square feet of its 17-acre Doral Costa Office Park at 97th Avenue and Doral Boulevard in September, said Walter Robinson, vice president for project leasing at Trammell Crow.
Opening this fall, he said, will be one of two 130,000-square-foot, four-story office buildings planned and a 1-acre outparcel with a 20,000-square-foot, three-story bank building with a drive through.
When completed, Mr. Robinson said, Doral Costa Office Park will include the remaining four-story building for a total of 280,000 square feet.
Construction of the second phase will be tied to first phase leasing. Mr. Robinson said he is "optimistic about the market" and expects the first phase to be leased quickly.
"In the Airport West area, the office market historically has been very strong. When there is supply, there has been absorption," he said.
Eight acres of green space planted with "literally millions of dollars" in Royal Palms and other vegetation, Mr. Robinson said, will create a lush, tropical atmosphere, setting the park apart from its competitors. Lease rates will range from $17 to $19 a square foot, according to company reports.
The park's low density zoning and central location to Miami International Airport and major highways Florida Turnpike, Palmetto Expressway and State Road 826 also set it apart from other office projects, Mr. Robinson said.
Opus South Corp.'s Doral Concourse I, a six-story 240,000-square-foot office building on seven acres at 8400 Doral Boulevard or Northwest 36th Street, opened for leasing this year, said Mark Levy, regional director of real estate in South Florida for Opus.
So far, the project has netted one tenant, brokers familiar with the area say: Ayala, an offshoot of Lucent Technology, has taken 50,000 square feet.
Mr. Levy said the market is strong and showing lots of activity. He said Opus is "very optimistic" that the building will be leased by year's end.
Opus South Corp owns about 11 contiguous acres adjacent to Doral Concourse I, he said, and is looking to offer build-to-suit options or continue office development on the land, depending on the market.
The site, sandwiched between Ryder Systems Inc. and Carnival Cruise Lines, can accommodate two more office buildings for another 390,000 square feet, Mr. Levy said.