Coral Gables Office Market June 2010

With increased competition from downtown Miami and Brickell office markets, where two new towers are adding 1.6 million square feet of Class “A” office space, leasing rates in Coral Gables are heading further south.
Gables rates are still competitive. Average asking rates there for class A space is $36.86 per square foot, slightly lower than both downtown and Brickell/. The Gables' total vacancy now is 19.6% — higher than downtown's 16.6% and Brickell's 15.9%. But that could change once Met2 Financial Center and 1450 Brickell open as each project has a lot of space to fill.

One of the largest transactions that has occurred within the last four quarters in the Miami-Dade County market is the sale of Bacardi Building in Coral Gables to the Ponte Gadea Group. This 251,464-square-foot office building sold for $120,000,000, or $477.21 per square foot. The property sold on 12/3/2009.

Office leasing activity in Coral Gables has definitely picked up since first quarter of last year. Among leases closed in the Gables in the first quarter were Carolina First Bank, d/b/a Mercantile Bank, leased 18,767 square feet at 255 Alhambra Circle. Law firm Colson Hicks Eidson is to occupy the 17,000-square-foot penthouse previously occupied by BankUnited in that building, and the Consulate of Barbados is moving within the Gables to the 13,000-square-foot penthouse at 2121 Ponce de Leon Blvd.

The fact that there is no new office product being delivered this year is helping to fill some holes in the Coral Gables office market. Nearby, Allen Morris Co. is also moving ahead with its Ponce de Leon Towers, a 210,000-square-foot luxury office building that's part of seven-acre Old Spanish Village.

 The Gables-based company is going through the last project approvals before moving forward with plans and has two tenants committed, including itself and The Rockefeller Group. Mr. Morris has said he plans to begin construction by year's end to complete the 16-floor project by the end of 2012.

The new projects central location and high-end amenities have caught the attention of several large-scale banks said to be shopping for office space that are eyeing the Gables. Mercantil Commercebank is looking for a 100,000-square-foot space, Gibraltar Private Bank & Trust is searching for 60,000 square feet and TotalBank has been touring the Gables and downtown for a 50,000-square-foot headquarters.

One of my clients has been considering purchase opportunities in the Gables and here are the comps that were identified for Coral Gables class A & B office buildings between 5,000 – 25,000 rentable square feet sold within the last year.

312 Minorca: Class “B” Office Building
The remodeled free standing 1950 Coral Gables 2 story Office Building in the Heart of the Gables Business District, which has 7 parking spaces, 7,899 Sq. Ft sold for $3,000,000 or $380 per square foot.

Merrick View Office Condo:

Bayview Financial sold 6 commercial condominium units at Merrick View, located at 135 San Lorenzo Avenue in Coral Gables, to a Fairchild Merrick View, LLC, a private investor, for $2.4 million on April 16, 2010.

The units, which total 9,373 square-feet, are 100% leased to tenants. The actual cap rate was reported by the seller to be 8%. The NOI, given the cap rate, would be $192,000.

This was an all-cash deal under contract for 30-45 days.

301 Almeria Ave - Class “B” Office Building
The subject property located at 301 Almeria Ave Coral Gables,Fl 33134 sold in a Owner User sale for $2,980,000 or $181.77 per square foot. 

Reportedly, the sellers were off-shore second generation owners looking to sell. The buyer is an attorney (ACOSTA STROMMEN - Julio Acosta ) who processed an SBA loan and will occupy space at the location. There was no cap rate, and the property was 50% vacant at the time of sale.

2850 Douglas - Class B Office building

Another owner/user - Professional Translating Services, Inc. occupying building sold at $4,250,000 or $183.11 per square foot.
 
Owner occupants could be eligible for SBA 504 financing, which would business owners to obtain 90% financing.

Please call me @ 305-720-7925 if you are interested in Keith Darby’s services.