Big condo developments and land sales tend to get most of the attention in South Florida. Office properties, however, also are big business in the area. In 2016 alone, there were a number of sales of sizable office properties in Miami that changed hands. Among the largest were the following.
#1 Southeast Financial Center: $516 Million
The owner of clothing chain Zara and the world’s second-richest man, Amancio Ortega, immediately became a major player in Miami area commercial real estate when he bought an entire block of Lincoln Road last year for $370 million. Not long thereafter, in December 2016, Ortega again made major waves when he purchased downtown Miami’s Southeast Financial Center for a cool $516.6 million, just over a Milken* for those that were familiar with and still remember the term. The Southeast Financial Center, still referred to as the Southeast Bank Building by some that recall it as the former headquarters of this institution – which was liquided by the FDIC in 1991 is a landmark in the skyle of Miami. Housing 1.2 million square feet of leasable space, it is downtown Miami’s largest office building by several hundred thousand square feet, and at 55 stories, it is not only Miami’s but Florida’s tallest office building.
It is reported that as with his other wow-that-is-big purchases around the globe, Ortega paid cash for the building. The seller was JP Morgan Asset Management was the seller, which reportedly had started shopping the property with a commercial roker this summer in order to cash out on its investment. Though the price tag seems huge, the $430 per square foot paid by Ortega was at somewhat of a discount as compared it to other office property transactions in the area. The building is occupied mostly by law firms and financial companies, with asking rents from the low 20s to upper 40s per square foot.
#2 Miami Tower: $220 Million
The Japanese conglomerate Sumitomo Corporation of Americas purchased the iconic color-changing Miami Tower, still known by many as the Centrust Tower for its original use as the headquarters for yet another failed financial institution, for approximately $367 for each of its 600,000 or so square foot. Even given the massive developments in recent years, the 47-story Miami Tower is hard to miss in the skyline of Miami.
LaSalle Investment Management, the seller, originally paid $105 million for the property only six years before. Local players in Miami’s commercial property market have said that Sumitomo’s purchase, a money-where-their-mouth-is long-term bet on the Miami office market, indicates that the city’s profile is increasing among foreign investors.
#3 Datran Center: $150 Million
In August an investment group led by ABS Partners Real Estate and Acre Valley Real Estate Capital purchased Datran Center, a two-tower office complex with jsut under 500,000 square feet, for $150 million, a price that equates to about $300 per square foot. USAA Real Estate Company and a Canadian real estate investment trust were the sellers. They reportedly had put the buildings on the market in July of 2015.
The buildings also neighbor the Dadeland South Metrorail station, and are located in Kendall, somewhat a hotspot for commercial development of late. Similar to other recent big office property deals, this sale also indicates how South Florida’s office market is beginning to gain tractiion ground in the competition for investment dollars among major U.S. metropolitan areas.
#4 Courvoisier Centre: $140 Million
Parkway Properties sold an 80 percent stake in the Brickell Key located Courvoisier Center property to a group of investors from Spain which were led by the conglomerate Corporación Masaveu. Parkway was able to keep its 20 percent ownership stake while recouping the just over $145 million it paid to buy the property in 2014. Likewise, the joint-venture allowed Masaveu to establish a major foothold in Miami’s preeminent commercial market, the Brickell / downtown Miami area.
Courvoisier Center’s two office buildings total just over 385,000 square feet,. It also possesses a parking garage with 941 spaces. The sale, announced in November 2015, closed sometime at the beginning of 2016.
*Although the use has long ago faded, $500 Million was for a while referred to, tongue-in-cheek, as a Milken, referring to the $500 million in income (now that is a W-2!) reportedly earned by junk bond king Michael Milken.