Office Space In Flux As Regus Sublease Specialists Await Chapter 11 Action
Written by Frank Norton on March 6, 2003
By Frank Norton
Nearly 100,000 square feet of Miami-Dade County office space may be in flux as office space provider Regus Business Centre Corp. awaits Chapter 11 bankruptcy proceedings.
Regus Group worldwide leases bare office space from building landlords and re-leases finished suites with workstations and support equipment to companies looking for short-term, work-ready offices. The office specialist has been hit by business retraction and the lack of demand for short-term space office space by its traditional clients in expanding small businesses and corporate branch divisions.
Locally, Regus operates 50,000 square feet at Waterford Business Park, 5201 Blue Lagoon Drive; 22,500 in the Mellon Financial Center, 1111 Brickell Ave.; and 23,500 at Miami Center Downtown, 201 S Biscayne Blvd.
Local Regus offices referred questions about operations to its US headquarters in New York, which did not return messages.
Regus Business Centre, the company’s US division, in January filed for bankruptcy protection and announced a plan to return to profitability. The division is working to restructure terms of its leases and related guarantees through negotiations with landlords, according to a Jan. 15 statement from the Regus Group.
"They are in ongoing discussions with their three Miami landlords, said Jack Lowell, vice chair of Codina Realty Services and chairman of the Greater Miami Chamber of Commerce.
Mr. Lowell also said Regus’ troubles could be the reason Brickell-based Americas Capital Partners’ deal late last year to buy the Mellon Financial Center from Spanish real estate giant Testa Inmuebles en Renta fell through.
Other local commercial real estate brokers agreed.
"If you have concerns about a tenant’s solvency it’s more difficult to underwrite the future revenue," said Lawrence Sullivan, senior vice president with Jones Lang LaSalle.
According to Mr. Sullivan, resellers of office space and support not only face slowed demand but growing competition with landlords more eager to settle their own needs.
"Owners like suite operators when times are good because they don’t have to deal with a number of small tenants. It’s less of a hassle," he said. "But when times are bad, the suite company competes with the owner. Between the suite company, vacancy and other subleasing it’s a triple whammy."
Responding to questions about how Regus’ bankruptcy sits in the minds of local landlords, Barbara Liberatore Black with Miami’s Cresa Partners said: "It’s another chunk of space they have to worry about subleasing."