Major Leases Pending New Office Building Reps Say
Written by Marilyn Bowden on April 24, 2008
By Marilyn Bowden
Brickell Financial Centre, the last of three new office buildings to break ground in the downtown-Brickell corridor, was the first to sign an anchor tenant, but landlord representatives at competing properties say they expect to follow with lease announcements of their own in the near future.
"Major leases are always complicated and take a long time," said Jack Lowell, vice chairman at Flagler Real Estate Services, who handles leasing at Met 2.
"We are still working on our first couple of deals and expect to do a couple of them very soon."
While the large prospects looking at the new buildings right now are already in the market, Mr. Lowell said he thinks as the credit crisis gets resolved more financial service firms will come back.
"Also," he said, "since rates in existing buildings in downtown and Brickell are so high, a tenant can move to a new building and have lower rent."
Cushman & Wakefield’s Maggie Kurtz, who is a leasing representative at 1450 Brickell, said that in the past couple of weeks "we have been super busy, and the feeling is different. Prospects are not just asking for proposals but are actively negotiating."
She said she expects each of the new buildings "will land a decent-sized tenant sometime this year.
"If somebody is serious about moving, this is the time to do it. They may not want to be in the same building as a competitor, and that gives the other new buildings a chance to land other quality tenants.
"Only the earliest tenants get the better views, better incentives and better locations within the building."
The law firm Bilzin Sumberg last week signed a 10.5-year, $58-million lease for 115,000 square feet at Brickell Financial Centre, filling about 15% of the building, said Danet Linares, senior vice president and director of Real Estate Services for Foram Group.
The 601,379 square-foot, 40-story office tower is scheduled for completion in January 2010. Bilzin Sumberg will occupy the 24th through 28th floors.
"We are very committed to this development, and we are experienced," Ms. Linares said, "but until the first tenant signs nobody knows for sure whether a building is moving forward. So I think this will start the momentum."
In appreciation, Ms. Linares said, as soon as the deal was inked, Foram presented John Sumberg, Bilzin Sumberg’s managing partner, with a smart car.
One of the two witnesses to the lease signing, she said, was Mayor Manny Diaz.
Representing Bilzin Sumberg in the transaction were Barbara Liberatore Black and Matthew Goodman of Cresa Partners. The new lease included a 30,000-square-foot expansion.
Mr. Sumberg said his firm had a preference for Brickell over downtown, where it’s had offices for more than two decades at Wachovia Financial Center, for several reasons, one of which was ease of access.
"We think that the egress and access is much better," he said. "We also think that with Mary Brickell Village and other new developments Brickell has become a more interesting site."
Another deciding factor, Mr. Sumberg said, was Foram Group’s commitment to holding the property for many years after completion.
"We think they are really committed to doing a landmark project," he said.
"They have held this property for 20 years waiting to build, and their national headquarters will be here. So they will not be selling it to somebody else. It is their legacy.
"Another thing we were very attracted to is their environmental commitment. They are precertified for LEED silver certification, and they are going for gold certification.
"We think this will be very important going forward. There are intangible but significant health benefits to green buildings, and according to studies people working in them are happier."
Developers of both Met 2 and 1450 Brickell have announced they will seek LEED silver certification.
Other factors for choosing Brickell Financial Centre, Mr. Sumberg said, were a gym in the building free to all employees and an efficient layout without columns.
"For a law firm, the layout works extremely well," he said, "because columns interrupt offices and take up space. We’re able to have significantly more efficient use of space because of not having columns in the floor plate; the loss factor is below 10%."
Tim Prunka, long-time leasing agent for Wachovia Financial Center, said he recalls that Bilzin Sumberg moved into a partial floor as a subtenant for Southeast Bank more than 20 years ago, and grew to 86,000 square feet.
"Their lease isn’t up for three years," he said, "so there is no impact for us yet. But when they do leave, it will be a huge opportunity for another tenant. They have added about $100 a foot in improvements."