Office Retail And Condo Projects May Interact To Change Face Of Miamis Brickell Area
By Sherri C. Ranta
Office tenants looking for high-end office space will have new choices later this year on Brickell Avenue in Espirito Santo Plaza and The Millennium, both mixed-use developments.
Estoril Inc. and Millennium Partners are courting some of the same clients to fill some of the newest space to open on Brickell in more than a decade with the exception of Barclay’s Financial Center, last year renamed Mellon Financial Center.
Millennium officials are aggressively negotiating with prospective tenants to fill its 230,000 square feet of office space but do not have signed contracts at this time, said Brian Collins, project principal. The 70-story Millennium, expected to be the tallest building south of Atlanta, is to open in late fall.
The project’s Four Seasons hotel is attractive to prospective office tenants, Mr. Collins said
"The clients can stay in the Four Seasons and the tenants can entertain there. That has added value," he said.
The 36-story Espirito Santo Plaza is expected to open by late summer, said Estoril President Bill Ross. Banco Espirito Santo will be the tower’s first office tenant, taking 70,000 of 260,000 square feet, he said. They have no other signed contracts.
Both developers say their buildings will have staying power. Both companies or parent companies plan to remain operators and owners of some components of the projects after opening.
"The Group Espirito Santo name, the family name, makes prospective clients feel the building will remain a top class A building. You don’t have absentee owners," Mr. Ross said.
Estoril does plan to sell the project’s 203-room hotel component, but a transaction is still pending.
"We had a hard time immediately after Sept. 11," Mr. Ross said, "but since then we’ve had multiple contracts to choose from."
The buildings will bring about 420,000 square feet of new office space – not counting 70,000 pre-leased by Banco Espirito Santo – to the Brickell marketplace, not a huge supply of new space, said Charles V. Barton, principal, CRESA Partners, a corporate real estate services firm.
"In the [Brickell] market today that’s very static, we’re not seeing much in the way of real absorption or growth. We’re seeing some return of space," he said. "It’s a real unknown as to how these buildings will ultimately do."
The Miami office market is "notoriously slow in pre-leasing," Mr. Barton said. "People really like to see the buildings and know what they look like. People are just starting to wake up and pay serious attention to them."
Rents in the Espirito Santo Plaza and Millennium will probably run from the low- to mid-$30s a square foot. Existing Class A office space in the area, he said, runs from the high $20s to low $30s per square foot.
Both will also have residential and retail components.
The Millennium will have 84 condo-hotel units to be managed by Four Seasons and 186 private residences. Amenities will include a 45,000-square-foot health club and a 2-acre pool deck above the garage.
Mr. Collins said more than 20% of the private residences and 25% of the condo hotel units are sold. Prices range from $460,000 to $6 million for the private residences.
The Espirito Santo Plaza sales center is expected to open at 1401 Brickell Ave., suite 340, next month. The strongest response among prospective tenants, Mr. Ross said, is in the retail sector among restaurant owners. The project will have about 7,500 square feet of retail and 15,400 square feet of restaurant space.
"We’re reviewing quite a few proposals from restaurants. As Brickell keeps expanding, the restaurants are very happy to come into the building," he said.
Restaurateurs, Mr. Ross said, can see a great increase in the resident population along Brickell. "They want to service that demand."
Space on and around Brickell Avenue for retail use is also expanding as mixed-use developments that focus on residential, such as Summit Brickell, are finished and attract natural customers.
About 20,000 square feet of retail associated with Summit Brickell, 50 SW 10th St., is expected to open in March, said Ken Hawkins, a partner at Bermello, Ajamil and Partners.
Some of the planned businesses, such as Baja Fresh, a restaurant taking 4,000 square feet in a separate building on South Miami Avenue, and Patrice Bourgier Unisex Salon in ground floor space on 10th Street, are expected to open in March.
Other ground floor retailers expected in Summit are Marble Slab Ice Creamery, 1,000 square feet; Archie’s Pizzaria, 4,152 square feet; and Royce Dry Cleaners, 500 square feet on 11th Street. About 3,800 square feet is not leased at this point, Mr. Hawkins said.
Ground-floor retail is also planned at BAP’s Brickell View condominium under construction at 30 SW 12th St. The $47 million, 37-story project is expected to include 18,000 square feet of retail with possible tenants being a restaurant and CVS pharmacy, BAP officials said.
A significant number of shops and restaurants could follow completion of Mary Brickell Village in a few years, a mixed-use development along South Miami Avenue between Ninth and 10th streets.
After multiple construction start dates have come and gone, developers at Constructa US say groundbreaking is very close. Officials say they are close to announcing the name of a development partner for the 35-story residential tower, one component of the project.
Constructa US and its partners plan to develop the retail portion of the project. About 41% of the commercial space has been leased, officials said, including a management company for the parking garage. Retail tenants are expected to include a 27,000-square-foot Publix, Redstone American Grill, Oceanaire Seafood Room, Starbucks and P.F. Chang’s China Bistro.
Condominiums with ground-floor retail are planned or under construction throughout the area.
For example, Renzi Development hopes to begin construction this year on The Sail, 170 SE 14th St., and The Beacon, 801 Brickell Plaza. Both are mixed-used condominiums with ground floor retail, said developer Pasquale Renzi.
Groundbreaking and construction is expected by March on The Sail, a $26 million, half-acre project in the permitting stages with the City of Miami. Units will range from 750 to 1,200 square feet and cost $210,000 to $390,000. Plans also call for about 3,000 square feet of ground floor retail. Completion is expected in spring 2005.
Most of the early buyers, Mr. Renzi said, are locals looking to relocate to Brickell, empty nesters or investors. Very few are foreign nationals, he said, because project advertising has not yet begun.
A sales office is to open at 840 Brickell Plaza by Feb. 15.
The city approved a major use permit for The Beacon, Mr. Renzi said. The $45 million project is now in permitting stages, a process expected to take four months. Construction is expected to begin in the fall.
Plans for The Beacon call for a 40-story, 252-unit tower. Units will range from 700 to 1,800 square feet. Prices are expected to range from $220,000 to $600,000. Retail space will range up to 5,000 square feet.
Three years after first acquiring the needed lots for a new, mixed-use development in the heart of Brickell Village, developer Kevin Reilly hopes to begin construction by year’s end on the $150 million Brickell Station condo, 1101 SW First Ave.
Removal from the site of the original Miami High School, known as The Bungalow and built in 1909, on Jan. 18 to Southside Park, cleared the way for construction, Mr. Reilly said. The developer donated the building for preservation and $35,000 to assist with the move.
Plans for Brickell Station call for two towers of 359 condos. Units will range in size from 800 to 1,500 square feet and be priced from $200,000 to $400,000.
Mr. Reilly said he is negotiating a joint venture agreement with a "strong national development company" to help him to move forward with the project. When 9/11 hit, he said, a planned partner backed out.
"We then regrouped and put the deal together with another strong development partner," Mr. Reilly said.
A sales office will soon open on the 2.1-acre site. Developers need at least 40% of the units sold before construction begins.
The market remains strong, Mr. Reilly said, and based on a feasibility study, he said he expects to meet sales targets before the end of the year.
Other Brickell area residential projects include:
The Rilea Group is demolishing two small buildings to make way for Park Place at Brickell, 1440 Brickell Ave. Construction of the first, 36-story, 372-unit tower is expected to begin in May and be complete in 18 months, said Alan Ojeda, a principal.
Construction is under way on the $250 million waterfront condominium The Jade at 1295 Brickell Bay Drive, a joint venture between Fortune International Development and Swire Properties. Plans call for a 48-story tower with 326 units on 2.5 acres. Completion is expected in 2004.
Groupe Pacific plans Brickell on the River, a 42-story condo project just off Brickell on Fifth Street. A north tower is to have 384 units priced from $227,000 to the $600,000-plus range. Developers on Tuesday announced that Fortune International would be exclusive sales agent.
The Related Group plans to begin construction this year on The Residences at Brickell, a 22-story, 138-unit tower at 170 SE 12th Terrace. Conceived as a luxury rental, officials have said they are keeping options open to convert to condo. The building is expected to have 3,000 square feet of ground-floor retail.