MetLife buys three Blue Lagoon buildings for $97.5 million
By Marilyn Bowden
With the purchase of three more buildings at Waterford at Blue Lagoon Office Park in Airport West, MetLife has become the park's largest landlord.
MetLife closed Friday on a $97.5 million deal to buy the Atrium Building portfolio, said Charles J. Foschini, senior director of CBRE-Melody, which represented the seller, Teachers Insurance Annuity Association.
"Like most investors," Mr. Foschini said, "Teachers sells when they believe the timing is optimum for investors. From MetLife's perspective, it's a good time to be a buyer and an opportunity for MetLife to control more of one of the best-designed parks in the Southeast."
The three buildings — at 6303, 6505 and 6100 Blue Lagoon Dr. — total 494,746 square feet. MetLife, which bought five buildings at Waterford in July 2005, now controls about 800,000 square feet of Class B office space in the park. The company's South Florida portfolio has grown from 180,000 square feet to about 1.6 million over the past four years, said Brian S. Gale, managing director of Taylor & Mathis, which leases MetLife's properties at Waterford.
He said the three buildings are about 82% leased.
"When MetLife bought the West buildings in July 2005, they were 72% leased," he said. "Now they're 95% leased, and we have increased rent by about 12%. So having seen the success of those buildings, MetLife is very bullish on this market and really wanted to buy this portfolio."
Mr. Gale said MetLife was impressed by the quality of the tenants in the Atrium buildings. They include Bank of America, The Discovery Channel Latin America, Ford Motor Co., Komatsu America, Johnson & Johnson, Oracle Corp., Royal Caribbean Cruise Lines, Seabourn Cruise Lines and Sharp Electronics.
MetLife poured $1 million into upgrades of the five buildings purchased in 2005, but only minor renovations are planned for the Atrium buildings, which are newer and have been well-maintained, Mr. Gale said.
At about $197 a square foot, the price tag for the newer buildings is significantly higher than the $121 MetLife paid for last year's acquisitions. In February, Hines paid about $157 a square foot for Airport Corporate Park in the same area, said Grant Killingsworth, a broker at Jones Lang LaSalle who tracks building sales.
"The market is still going up," Mr. Killingsworth said. "Landlords are benefiting from increased rental activity and increasing rental rates."
He cited recent sales prices in other parts of the county that trounce the Waterford price level, including 255 Alhambra in Coral Gables, $289 a square foot, the SBS Tower in Coconut Grove, $350, and The Lincoln in Miami Beach, $458.
"Now that MetLife is getting greater control of the Class B market in Waterford," Mr. Killingsworth said, "they can reposition some of these buildings that are older assets and reintroduce them to the Airport West market."
For Teachers, the deal probably will lead to a sharper focus on Waterford's existing and planned Class A product, said Dick Neve, regional vice president of The Hogan Group, which handles development, management and leasing of Teachers' buildings there.
"We have five Class A buildings now," Mr. Neve said, "and we can build another 1.5 million square feet in the future. It is my understanding that this was an opportunity to unload the B- and C-quality buildings.
"We are about 94% leased in Class A, and it's possible we will start construction on the next building, at 1000 Waterford, in the first quarter of next year."