Tag Archive for: 360 rosemary

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Microsoft, Citadel and Elliott Management are all in talks to lease office space in South Florida, adding fuel to the trend of major tech and finance firms expanding in the region.

Seattle-based Microsoft is reportedly in talks to lease 30,000 square feet at 830 Brickell, a 57-story office tower being developed by Vlad Doronin and his joint venture partner Cain International, according to Business Insider.

Billionaire Ken Griffinā€™s Chicago-based hedge fund Citadel is also eyeing 830 Brickell, and is on the hunt for up to 80,000 square feet in Miami. Griffin has beenĀ acquiring landĀ on Miami Beachā€™s Star Island, and his Citadel Securities has been operating a temporary trading room in Palm Beach since the pandemic began.

Baker McKenzie is also in talks for space at 830 Brickell, according to Business Insider.

MSD Partners, the private investment firm of Dell Technologies billionaire Michael Dell, provided aĀ $300 million loanĀ to construct 830 Brickell in 2019. WeWork was announced as an anchor tenant, though itā€™s unclear whether the co-working operator will still be a tenant. When it is completed in 2022, the building will mark the first new large Class A office tower in the downtown Miami market in the last decade.

Elliott Management, the hedge fund founded by Paul Singer, is expected to sign a 40,000-square-foot lease at Related Companiesā€™ 360 Rosemary office tower in downtown West Palm Beach. (Related is expected to close on the nearby Phillips Point office towers forĀ $282 million.)Ā Elliott ManagementĀ has been looking in the market for months, the Palm Beach Post reported.

New Day USA, a mortgage company based in Maryland, is also reportedly finalizing a lease for about 50,000 square feet in the same building as Elliott Management.

Blackstone GroupĀ announced earlier this year that it is taking 41,000 square feet at 2MiamiCentral, an office building at the mixed-use MiamiCentral development, anchored by Brightline.

Virtu Financial plans to sign a 10-year lease in Palm Beach Gardens to relocate about 30 people from New York, Bloomberg previously reported.


Source: The Real Deal

West Palm Beach

Real estate agents are increasingly concerned that first-class office buildings offer too much space to sublet shadows.

Even though another project needs to be considered, downtown West Palm Beachā€™s office market is full of empty space, and real estate professionals say there is little demand for renters outside the area to rent large offices.

Surveys of real estate developers and estate agents indicate that the cityā€™s Class A office buildings, which usually attract the top tenants, have sufficient space directly in the buildings or by office tenants who are trying to rent their space. These sublet offices are a shadow market, indicating that the actual supply of office space is much larger than expected. In fact, the prime A buildings are about 80 to 85 percent full, which means that at least 10 to 15 percent office space is available in each building.

ā€œThere are big holes in all buildings,ā€ said a real estate agent who asked not to be named. ā€œWhereā€™s the demand?ā€

The space flood is revealed when two new office buildings are constructed in downtown West Palm Beach and a third tower is due to be approved by a city committee. The Downtown Action Committee will vote on whether the One Flagler office tower will be allowed to raise 25 floors on land if it has five floors near South Flagler Drive and Okeechobee Boulevard.

The tower would offer 261,000 square meters of office space for rent. These buildings complement the existing range of first-class spaces in the city center. This area includes Class A buildings such as Phillips Point, Esperante and CityPlace Tower.

ā€œBack in June, I had 17 percent vacancy in front of the new buildings,ā€ said Neil Merin, chairman of NAI / Merin Hunter Codman in West Palm Beach. ā€œAdding Rosemary 360 and One West Palm, both under construction and scheduled to open in 2021, will bring the vacancy rate to 35 percent. With 360 Rosemary, One West Palm and possibly One Flagler, youā€™re talking about 750,000 square feet. But even in the prime, we can only take up 100,000 square feet a year. The space will not only last for years, but will also lower rents in other office buildings.ā€

A developer from Flagler, Related Cos., argued for the tall tower, saying there is a lack of Class A rooms with the amenities and water views provided by private equity firms and hedge funds Northeast would be sought to make room in the city center. However, according to brokers and developers of commercial real estate in the city center, numerous high-quality office spaces are currently available.

ā€œThis is due to the fact that the market has seen flat to negative net absorption in the past two years when some companies left and others signed new contracts for smaller spaces,ā€ experts said.

Real estate sources say the flood of space and new office buildings coming onto the market frighten some building owners who want it. In fact, it can be assumed that the Phillips Point office complex will be launched next year, as well as other buildings.

ā€œThe market is getting nervous,ā€ said a source.

Phillips Point is a Class A office tower on 777 S. Flagler Drive. The two-tower complex offers water views, luxurious finishes, and a top tenant list. Among them: AMG, a global wealth management company.

AMG endeavors to sublet the entire 11th floor of the east tower, which is 16,000 square meters in size and offers a breathtaking view of the water. Also available is a first-class room with a view of the water on the 10th floor of the East Tower, which was once occupied by the Arnold & Porter law firm, which still rents out the room. The 8,000 square meters of space are available for subletting.

ā€œIn fact, 84 percent of the 460,000 square feet at Phillips Point are occupied,ā€ brokers said.

Over there in Esperante, at 222 Lakeview Avenue, the 25,000 square meter tower, according to the real estate agent, has 48,000 square meters of rental space available, which corresponds to an occupancy rate of around 82 percent.

Even if sought-after hedge funds and private equity companies rent space, they donā€™t take much with them. Instead, they typically look for small offices that are sometimes between 800 and 1,200 square feet, according to an expert in commercial leasing. According to brokers, more than 95 percent of the Class A office buildings in the city center were fully let for a short time, but have adjusted to their historic occupancy rate of 80 to 85 percent.

ā€œThere werenā€™t many significant new businesses in downtown West Palm Beach,ā€ said Peter Reed, managing partner of Commercial Florida Realty Services. ā€œItā€™s still a messā€ of existing downtown tenants.

For example, a new tower under construction, 360 Rosemary in Rosemary Square, has replaced Comvest from the nearby CityPlace Tower. It also attracted Lewis, Longman & Walker Law from Northbridge Center, where the firm rented 16,000 square meters. Now both the Cityplace Tower and Northbridge have to fill the soon empty space in their buildings.

At CityPlace Tower on 525 Okeechobee Boulevard, the last new tower in the city center since 2008, the occupancy of the building is only 72 percent according to the leasing information on the website and the broker data. The brokers market a 21,160-story sublease on the 9th floor. The rental price is $ 39 net per square foot, less than the market price of more than $ 50 per square foot for the area in the building.

In addition, according to the buildingā€™s website, the 300,000 square meter building has a further 64,127 square meters of rental space. This includes the top two floors where Intech used to be and which have moved to the One Clearlake Center on Australian Avenue.


Source: The Media Times

West Palm Beach

Developer Jeff Greene is moving forward with a four-building, 352-apartment complex thatĀ looks across Clear Lake reservoirĀ toward theĀ West Palm Beach skyline. But wait ā€” that’s not all.

Greene, who owns probably more West Palm Beach property than anyone, and whoĀ long has drawn city criticismĀ for holding off on construction, says he has pushed the launch button not just onĀ Clear LakeĀ Estates but on several projects in and around the city.

Among them:

–Ā One West Palm, a two-tower, hotel/office/apartment complex downtown at 550 Quadrille Blvd., whose groundbreaking was last month, is scheduled for completion in the first half of 2021.

– A Westgate neighborhood apartment complex, off Congress Avenue north of Belvedere Road, is in the permit process.

– An industrial project off Jog Road, south of Okeechobee Boulevard, is a few weeks from construction.

– He hopes to start a refrigerated distribution center for McArthur Dairy off Florida Mango Road in 30 days. That would allow McArthur to move from its current location on Flamingo Road, where the developer plans to expand hisĀ Greene SchoolĀ and buildĀ indoor tennisĀ courts.

– A residential complexĀ overlooking Currie Park, with the city’s tallest towers, could be under construction in 12 to 18 months, depending on permitting and the city’s ability to more forward renovating the park.

Housing Affordability A Growing Challenge

The city commission gave initial approval Monday to site plan changes to will allow Clear Lake Estates to rise on the 11-acre site of the scuttledĀ Sail Boat ClubĀ project, just across the water from downtown. A vote on final approval is expected as soon as May 20.

Greene said in an interview that another nearby apartment complex he built four years ago, Cameron Estates, is so fully leased it indicates the market is ripe for the Clear Lake project. He’s getting rough construction cost estimates now and would start building as soon as possible, with city approvals. As planned, the project is short 106 parking spaces of the 721 required, so in exchange for a waiver on that requirement, Greene has offered to contribute to transit alternatives.

He would build a waterfront walking and bike trail on the property’s lakefront, and a publicly accessible path linking that trail to Executive Center Drive, or pay the city $158,000 to do the work, by the end of 2020. That work would create a non-vehicular connection between the Palm Beach Outlets, Okeechobee Boulevard and downtown. The developer also agreed to install a PalmTran bus shelter on Executive Center Drive.

At Monday’s city commission meeting, commissioner Cory Neering asked planning officials whether they would require Greene to include workforce housing in the project. Housing affordability has been a growing challenge as the city works to attract companies and their employees downtown. Neering was told the city could broach that issue with the developer over the two weeks before the final approval vote.

But Greene told The Palm Beach Post the site, which he bought in 2015 for $17 million, was too expensive to offer subsidized, below-market rents.

“This building, with the cost of construction and rents will just barely make it” financially, Greene said. “It only works for someone like me, who builds it for what it’s worth when its done. The rents just aren’t high enough and construction costs have gone up so much. The problem is, I can build it if I just make a return on investment, make cash flow, like owning a bond. But if I had to sell it to make a profit, there’s not enough there,” In short, he concluded, “if you try to have any kind of reduced rents, it would probably kill the project.”

No Tenants Yet For One West Palm

One West Palm, its foundation finally under construction, also faces challenges. The project, which Greene announced several years ago and got city approval for two years ago, has yet to line up a tenant for its 209,000 square feet of Class A office space.

Meanwhile, The Related Cos. is coming out of the ground with a competing downtown office tower,Ā 360 Rosemary, to be completed about the same time, next to Rosemary Square (the renamed CityPlace development).

And the city’s Community Redevelopment Agency this week approved a letter of intent for developer Charles Cohen to build an office tower as big as 490,000 square feet, on the ‘tent site’ at the corner of Okeechobee Boulevard and Dixie Highway. Greene, who owns the former Opera Place lot just north of the tent site, where he could develop as much as 1 million square feet, said that despite the current shortage of Class A space, he doubts there are enough tenants out there now to fill three or more buildings.

All the construction comes at a time of sustained growth in the city, which counts $3 billion of substantive projects in its development pipeline and has been challenged for solutions to the traffic that inevitably will generate. These includeĀ highrise residences off N Flager DriveĀ in the North End, a sprawlingĀ Anchor Site mixed-useĀ development and Currie Park redevelopment on opposite ends of Northwood Road, the renovation of theĀ 1930’s-era Sunset LoungeĀ in the Historic Northwest, aĀ rebuilt golf courseĀ and tennis center in the south end, aĀ Drive Shack indoor golf entertainment centerĀ and Mitsubishi dealership near the airport, condo towers onĀ S Flagler Drive, and a possible doubling in size of the county convention center, just to name a handful.

Of course, not all proposed projects get built. Greene has tabled a number, himself. His Opera place site has remained vacant for years. He dropped a micro-apartment building a block from Clematis Street and tabled a residential project on Clematis, after commissioning drawings by the same high-profile firm that designed One West Palm, Miami’s Arquitectonica. For the 20 acres he owns around the Currie Park waterfront, he has hired an even higher-profile firm, the Switzerland-based Herzog & de Meuron, designers of the Beijing Olympics’ Bird’s Nest stadium, but that’s another site he’s been talking about for a long time that remains vacant land.

Despite complaints from city officials or neighbors of his vacant sites, the Palm Beach billionaire gets construction cost estimates, does the math and only moves forward when the numbers add up to a profit, particularly since he’s generally not using other people’s money but his own.

At One West Palm, he waited on the market, held off while the city politicked zoning changes that benefited a competitor and he took time off for a run for governor. Now he’s done the numbers again and they add up to a worst-case scenario in which he makes only a little money, and best-case in which he makes a lot, he said. So, the cranes are in place.

Meanwhile, seeing occupancy stabilize at Cameron Estates at a healthy 95-97 percent, the numbers told him that despite construction costs trending high amid the building boom, Clear Lake Estates stood a good chance at success.


Source: Palm Beach Daily News