Trophy Deals Galore: Downtown Office Towers Trade in Slowing Market

Excerpt from the Daily Business Review article by Lidia Dinkova; published 2/25/19.

Trophy office towers have been trading across South Florida in spite of the regional market slowing down after five years of robust growth.

“In South Florida in general, (we are) attracted to the job growth and the population growth,” said Kevin Chin, senior vice president with PCCP LLC, which bought two South Florida office towers last year. “There is substantial development going on in downtown.”

The real estate finance and investment management firm with offices in California and New York bought downtown Miami’s SunTrust International Center for $127 million and as part of a joint venture bought downtown Fort Lauderdale’s 1 E Broward for $108.5 million.

1 E Broward “is a well-leased building. It’s the closest office building to Brightline, so we thought that was attractive as well,” Chin, who is based in New York, said using Virgin Trains’ previous name.

PCCP bought the 19-story Fort Lauderdale building in a joint venture with West Palm Beach-based NAI/Merin Hunter Codman from Ivy Realty.

For NAI/Merin, a commercial real estate services firm that has started buying as well, the purchase was motivated in part by Fort Lauderdale’s growth.

“I can tell you a lot of the young people in my office who formerly would have gravitated to Miami or Delray Beach are now choosing instead to move to Fort Lauderdale,” said Neil Merin, NAI/Merin chairman, and founder.

The purchase also made sense for PCCP because the $127 million price tag is much less than new construction, Chin noted. Both SunTrust and 1 E Broward offer an upside in rental revenue, too.

Ivy Realty, which sold 1 E Broward, invested $5 million in renovations in the 1984 tower and raised the occupancy to 91 percent. Since the sale, the rate is up to 93.5 percent.

At the same time, rents have remained below market, according to Merin.

The average now is $18 per square foot, triple net, compared with the average market rate of $30 to $35 per square foot, he said. Rents won’t be increased to the market rate but may hit $28 a square foot.

Aside from the Fort Lauderdale train station, the tower is just south of FATVillage, a once dilapidated warehouse district that’s experienced a rebirth.

“It looks very much like Wynwood five or maybe six years ago,” Merin said, referring to FATVillage. “Instead of being adjacent to the worst neighborhood in Fort Lauderdale, it (1 E Broward) is adjacent to the most attractive neighborhood in the city.”

Original article: PDF | View Article

News Articles Property Management Transactions

NEWS PICK-UP: Hinshaw & Culbertson Renews Lease in Fort Lauderdale

CoStar shared information about Hinshaw & Culbertson’s 16,696 SF lease renewal at 1 E Broward, facilitated by Max Pawk and Neil Merin, who represented the Landlord. Please find an excerpt below.

Chicago-based law firm Hinshaw & Culbertson has renewed its lease on the 10th floor of the One East Broward office building at 1 E. Broward Blvd. in Fort Lauderdale, Florida.

The tenant will remain in its 16,696-square-foot suite under a new five-year deal.

The U.S. law firm has three locations in Florida, including the downtown Miami and Tampa areas. Attorneys in its Fort Lauderdale office in particular specialize in corporate and business law matters, real estate, financial planning, liability and corporate organization, construction litigation, environmental law and labor/employment law, according to its website.

Built in 1984, the 19-story, 351,705-square-foot, 4-Star office tower sits on 4.6 acres in the Downtown Fort Lauderdale submarket of Broward County. The building underwent a common-area renovation in 1999 and it features reserved parking in a subterranean garage, 24-hour availability, an atrium, on-site banking and convenience store, conferencing facilities, a fitness center, restaurant, cafe and other tenant amenities.

Click here to read the full article.

News Articles Transactions