Businesses With Damaged Offices Scramble For Temporary Quarters
By Marilyn Bowden
Businesses whose office space was damaged by Wilma are scrambling for temporary quarters, with executive office suites and sublease space the most viable solutions.
"There are a lot of tenants from buildings with indefinite futures such as One Biscayne, Espirito Santo, 1200 Brickell and 1221 Brickell looking for temporary space," said Tom Capocefalo, managing director at Julien J. Studley commercial real estate. "But there are more discussions than transactions. Is there space out there? Yes. But will it be offered? Probably not."
In a tightening office market, he said, landlords who have space available for lease "don’t need or want to take available inventory off the market. They need long-term cash flow. So the questions are who are you, what do you need, for how long, and is there the opportunity to build a relationship that will benefit my building – say, with a desirable prospective tenant whose lease is expiring soon?"
The newest Class A building in Miami-Dade County – the Hines Partnership’s 2525 Ponce – has about 100,000 square feet available, 65,000 of it contiguous, said Project Manager Gonzalo Cortabarria.
"We had no damage," he said, "and we have received inquiries about temporary and permanent leases. But our objective is long-term."
Danet Linares, manager of Bank of America at International Place, which has about 21,000 square feet vacant, said she has fielded a few calls, but "this would be a last resort for most tenants. Most are scrambling to find accommodation within their own buildings."
And until assessments are completed, tenants aren’t certain of how long they would need to lease elsewhere, Mr. Capocefalo said.
"Tenants are reviewing their restoration clauses in their leases," he said, "wanting to know what their rights are. Usually there’s a process of three to six months in which the landlord can assess damage and communicate the status of long-term leases.
"So the best options are subleases or executive suite operations, and they are filling up quickly. Regus in Waterford will be fully leased by the end of the week."
"We’re bulging at the seams," said Karen Symos, general manager of Aventura Business Center, an executive suite service. "We’ve got people whose offices were destroyed or who don’t yet have electricity from Brickell, Doral, Hollywood and all over.
"What they need most is Internet access and the ability to have phone calls forwarded. We have that all set up."
Colonnade Corporate Center in downtown Coral Gables is also full, and Vice President Victor Rosado said he has a waiting list "that would fill our space four times over. We need to look for those who are going to need longer-term contracts to maximize our value."
For those who may need space for as much as a year while they wait for repairs, suburban office space might also be an option.
"Companies that have been in the Central Business District will have to make a decision whether or not they are willing to move pieces of their staff or even their whole office to another area," said Matt Adler of The Adler Group, which specializes in suburban properties.
"We have regular suburban offices and we also have single-story flex-product that could be built out for office, although it’s not necessarily used that way today."
Adler might be willing to do a lease for a year or less, he said, if a user were willing to occupy second- or third-generation space as is.
Meanwhile, there are less conventional solutions.
Alan Cristantiello of the Sheraton Miami Mart Hotel near Miami International Airport said he has temporary office space available on a weekly basis.
"Our hotel is hooked up to the airport power grid," he said, "so we will always have power."
The Greater Miami Chamber of Commerce provided free office space, Internet access and coffee in its conference room to Trustee and Chairman’s Circle members who were left without power, said spokesperson Lorraine Reigosa.
"We did get a handful of members who came in," she said, "but most have gotten their power back and have gone back to their offices."
In addition, Ms. Reigosa said, the chamber has been acting as a matchmaker between members who need space and those with space to lend.
"Even if someone has one cubicle, it helps," she said. "We have had a very upbeat response."