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SFOBA December Recap and January Preview

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In preparation for the 2015 SFOBA kickoff meeting Thursday January 15 at noon, hosted by Steelbridge Capital and Jones Lang LaSalle at Cypress Financial Center 5900 Andrews Avenue, here is our December recap and January preview. I also tried to include some of my own “borderline insightful” market commentary.

Thursday, December 11 marked the final meeting of the South Florida Office Brokers Association for it for 2014. The meeting was hosted by Donna Korn of Taylor and Mathis, agent for Brookdale Group, owners of a five-building portfolio totaling over 400,000 square feet of Class-A Office space in Sawgass International Corporate Park. The meeting was held at Brookdale’s International Place.

Our first speaker was Eric Messer, Research Manager for Newmark Grubb Knight Frank. Eric gave us a brief synopsis of the overall state of the office market. The news was very bright for the market as 2014 is shaping up to be the best year since 2005.

Approximately 685,000 sq. ft. of office space was absorbed in 2014 in Broward County, reducing vacancy rates from 15.0% to the current 13.4%. An interesting observation was that the Class B market was unusually strong, which according to Eric is the result of tenants being priced out of the Class-A market. This assertion was further supported by our panel discussion.

The December meeting featured a panel discussion featuring three top brokers in the market..The panel consisted of Scott O’Donnell, a CBRE investment broker specializing in private equity investments, Caroline Fleischer, a tenant representation specialist at Cushman and Wakefield and Chris Gallagher, a leasing specialist for Duke Realty. The panel was moderated by Paul Marko, President of Stiles Realty.

According to Scott, we are in the third strong year of a robust investment cycle. We are seeing a new layer of foreign investment as the market’s strong demographics are attracting funds from Latin and Asian sources. It does seem however, that many domestic investors are being priced out of the market due to the demand from these offshore sources.

Caroline discussed the vibrant CBD market in Fort Lauderdale. Properties along Las Olas Boulevard have seen net rent increases of $5-$10 per square foot over the past 12 months. Downtown tenants are urged to jump on leasing opportunities as spaces are disappearing rapidly and rents continue to increase. Chris Gallagher concurred with Caroline’s assertions, saying that he felt bad coming up with higher rates and fewer concessions in his Weston and Plantation properties. He felt like he was taking the first born from brokers with whom he had grown up in the business. But that is where the market is today.

This led to the inevitable question of whether the market is right for new development. According to Gallagher, Duke has recently signed 100,000 sq. ft. of leases in Weston and he could use a new building to lease. Caroline believes that we are 12 months away from needing new space in Fort Lauderdale CBD. But here’s the interesting piece that will have a major impact on the near term future of the office market. Residential developers will pay three times what office developers will pay for sites. With this price difference, as well as the pre-leasing requirements demanded by lenders, new office development may very well lag behind demand. Therefore, we can expect a trend of increasing rental rates and declining vacancies over the foreseeable future.

Other key trends in the market discussed by the panel included the trend toward urbanism. Fort Lauderdale has seen increasing residential development in the downtown core and the upcoming wave streetcar project will soon provide a mass transportation alternative. With millennials expressing a preference to live and work in an urban environment, the CBD should remain red hot. The panel and our host Donna Korn also pointed out the strength of the West Broward market which has been enhanced by the completion of the new express lanes on I-595 that are reducing travel times for commuters. In addition new mixed use projects such as Metropica will continue to draw residents to the western submarkets.

Our kickoff meeting for 2015 will be held at Cypress Financial Center in Fort Lauderdale’s uptown market and will be hosted by Sandra Andersen and Chase Kulp of Jones Lang LaSalle. Our guest speaker will be discussing All Aboard Florida, the proposed high-speed rail system that will be connecting our state’s major markets.

Stay tuned to the SFOBA blog as we continue to keep you updated on trends in The South Florida office market. And special thanks to Joanne Diaz and Ted Harris who do such a great job in creating programs to keep South Florida’s office brokers connected and informed.

Crocker Picks Up 339,000 SF In Boca

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Crocker Partners has acquired two high-profile office towers in Boca Raton from MetLife Real Estate Investors, adding 339,000 square feet of Class A space to its growing South Florida portfolio.

Crocker paid $81 million for the Boca office complexes.

The two buildings, both originally developed by Crocker entities, are One Town Center and The Plaza, located just south of Glades Road.

The two buildings are currently 42 percent leased and major tenants include Wells Fargo and Kayne Anderson Real Estate Advisors.  This latest acquisition, in partnership with Siguler Guff, brings Crocker Partners’ holdings in Boca Raton to more than 616,000 square feet. Earlier this year, Crocker Partners acquired the 277,390-square-foot One Boca Place office center, and the company expects to finalize another major acquisition by year-end that will bring its Boca Raton portfolio to more than one million square feet.

“Buying Class A vacancy in one of South Florida’s most desirable office markets is central to our investment strategy,” said Thomas J. Crocker, Founder and Managing Partner. “Our basis in these assets is a fraction of the cost it would take to replace them and we have significant upside potential as both buildings come with extensive development opportunities.”

Crocker Partners will manage the properties and has engaged CBRE for leasing, according to Angelo J. Bianco, Partner. He said Crocker Partners sees upside potential from development of surplus land surrounding the projects. The company, Bianco noted, has deep roots in the Boca Raton market, where it is headquartered and has developed many of the city’s most prominent buildings.  In addition to The Plaza, built as Boca Raton’s first Class A office tower, and One Town Center, home to W.R. Grace and later Tyco, Crocker introduced the City’s two major mixed-use centers, Downtown Boca Raton’s Mizner Park, and suburban Boca Center.

Overall, Crocker Partners’ portfolio now includes more than 8.0 million square feet of office real estate in the Southeast U.S. and Texas, representing more than $1.5 billion invested.

CBRE Recognized With Four TOBY® Awards

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CBRE received four The Outstanding Building of the Year® (TOBY®) Awards by the 2014 Building Owners and Managers Association (BOMA) of Fort Lauderdale and the Palm Beaches.

The TOBY Awards are the most prestigious and comprehensive programs in the commercial real estate industry, recognizing outstanding performance and rewarding excellence in building management.

“This is an important honor as it recognizes CBRE’s commitment to excellence and our Asset Services team’s professionalism and outstanding client service delivery capabilities,” said Patty Nooney, Senior Managing Director, CBRE Investor Services.

The awards recognize four office properties that CBRE manages on behalf of its clients and were presented in the following categories:

  • Renovated Building: Sabadell Financial Center, Plantation (Client – Clarion Partners)
  • Suburban Office Park (Low Rise): International Plaza, Boca Raton (Client – Clarion Partners)
  • 100,000 – 249,999 SF Building: The Plaza, Boca Raton (Client – MetLife)
  • 250,000 – 499,999 SF Building: Coastal Tower, Fort Lauderdale (Client – CBRE Global Investors)

 

CBRE Closes 16,000 SF At The Plaza

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CBRE has signed Imperial Finance & Trading, LLC, a subsidiary of specialty finance company Imperial Holdings, Inc. (NYSE: IFT),  to an 11,000 square foot lease at MetLife’s newly renovated, 11-story office tower, The Plaza in Boca Raton.

The firm moved into their new office space this month.

Antony Mitchell, CEO of Imperial, commented, “We are thrilled to move to our new Boca Raton location at The Plaza. This new space satisfies our operating needs while meaningfully lowering our annualized rental costs.”

Michael Erickson, Senior Vice President with CBRE handled the real estate transaction on behalf of building owner MetLife. Imperial was represented by co-brokers Ryan Nunes, Scott Allen and Shay Pope of CBRE’s South Florida Occupier Services Group.

Imperial provides customized liquidity solutions to owners of illiquid financial assets.

Other recent leases included Weingarten Realty Investors (NYSE: WRI) 5,000 square foot lease for the company’s South Florida regional office.

Crocker Picks Up Boca Office Complex

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One Boca Place, a 277,390 square foot Class A office complex in Boca Raton, changed hands in a $76.35 million transaction, according to a deed recorded Friday in Palm Beach County.

One Boca Place Inc. made a 70 percent premium on the sale after paying $44.73 million in 2001 for the property at 2255 W. Glades Road off Northwest Executive Center Drive. The seller secured about $32 million above what it paid to acquire the property.

A local investment group, CP Boca Place LLC, a Crocker Partners affiliate, purchased the office complex, including the 340,530-square-foot parking garage.

One Boca Place, also called Boca Raton Glades Road Center, is a premium office complex west of I-95.

Tenants range from federal clients, like the Florida Southern Probation Office, to financial services providers and law firms like Proskauer Rose.

Leasing for the property was represented by CBRE‘s Deborah Fink, Michael Wilson and Lisa Lawson.

It is now being represented by Jon Blunk, Mark Pateman, Danielle Vennett and Tara England of Cushman & Wakefield.

 

Source:  DBR

Deanna Lobinsky Tapped To Lease 200 East Broward

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CBRE has been selected as the exclusive leasing agent for 200 East Broward Boulevard, a landmark, Class A, 225,650-square-foot office tower located in Fort Lauderdale’s Central Business District, according to a release.

The property was recently acquired by Realty Associates Fund X LP, a company linked to Boston-based institutional investor TA Associates Realty LLC, making it the fourth office property to trade in the downtown submarket in the past 12 months.

The new owner will embark on an impressive renovation program for 200 East Broward to capitalize on robust market fundamentals and growing demand for high-quality office space downtown.

Downtown Fort Lauderdale’s office market is performing strongly, with 387,000 square feet of positive absorption over the last year and a half, bringing vacancy down to a pre-recession low of 13.6% (Q2 2014). Since 2011, CBRE has tracked 27 tenants totaling 375,000 square feet that have relocated from the suburbs to the CBD, and projects 32% market rent growth in Fort Lauderdale over the next five years.

lobinsky_deanna_brokerage_ftlaud.jpg“Ideally located in the heart of the ‘live-work-play’ environment of downtown Fort Lauderdale,  200 East Broward is well positioned to capitalize on Fort Lauderdale’s growth spurt and, under the ownership’s new vision and leadership, solidify its position as one of the most desirable office properties in the downtown market,” said CBRE Senior Vice President Deanna Lobinsky.

The 1992-built, 21-story office tower is prominently located at the intersection of Broward Boulevard and SE 3rd Avenue.

The Energy Star-rated project provides for retail and bank space on the ground and mezzanine floors, and eight stories of parking, with the office space on floors nine through 21. Additionally, the property features an attached 9-story parking garage, built in 2002, which combined with the pedestal garage provides for a 2.4 per 1,000 SF parking ratio.

The property is nearly 88% occupied, with tenants including Greenspoon Marder, PNC Bank and  Shutts & Bowen.

CBRE’s Jarred Goodstein and Avi Fisher are collaborating with Lobinsky in representing 200 East Broward Boulevard.