Portman-CMC Reveals Cost-Effective Master Plan for Miami Beach Convention Center

By Georgiana Mihaila, Associate Editor

After last month’s buzz over the stunning South Beach ACE proposal for the Miami Beach Convention Center, it is now time for the contending development team to take the spotlight. Portman-CMC, which is also bidding to re-develop the 52-acre Miami Beach Convention Center, has focused on the potential financial benefits of the development.

In a letter of intent addressed to the City of Miami this week, Portman-CMC laid out the proposal’s business and management terms, emphasizing the ongoing cooperation with city staff and officials when it comes to financing, management and land leases.

“One of the key areas we focused on was making public financing for the project responsible and sustainable, minimizing cost and risk to the city’s pocketbook,” said Ambrish Baisiwala, CEO of Portman Holdings. “For example—no new taxes and less bonding in order to finance the convention center improvements and expansion, as well as associated parking and infrastructure improvements.

“Additionally, our plan fast-tracks construction and phasing, shaving at least a year off of what many would consider the duration of this project in an attempt to generate a faster return on revenues for the city.”

Portman-CMC’s vision and overall approach to the redevelopment includes maintaining low building heights, providing a high level of connectivity to surrounding areas, creating a superior urban environment for conventioneers and residents, and maximizing the economic benefit to the City of Miami Beach. Focusing on convention center, hotel, retail, cultural and entertainment uses, the plan also includes the preservation of Fillmore Miami Beach at the Jackie Gleason Theater.

According to the Portman-CMC blog, city commissioners and staff have responded in a positive way to their proposal, as it would seem to be more economical for the city. The project would be constructed one year faster and would call for less public funds spending.

When comparing the two, the Portman-CMC proposal calls for $73.4 million less in public costs and would charge fewer fees to Miami Beach. Yet it would spend more in cultural facilities—calling for an $88 million investment in cultural facilities, as opposed to $6.3 million.

The final decision, originally scheduled for June 5, was pushed back, the South Florida Business Journal reports. Miami Beach commissioners, apparently overwhelmed by the high volume of information, need more time to evaluate the benefits of each of the two proposals and have not yet released an official date for announcing the development team of the $1 billion-plus redevelopment.

Images via Portman-CMC

For more Miami market data, click here.

Parkway to Pay $66M for Fully Leased Miami Property

 By Georgiana Mihaila, Associate Editor

In a move to expand its presence in South Florida, Parkway Properties Inc. will be buying the 140,000-square-foot Lincoln Place for $66 million in debt and stock, the South Florida Business Journal reports. The company recently announced entering into a purchase and sale agreement to acquire the South Beach office/retail building and add it to the portfolio of 45 office properties in eight states—with an aggregate of approximately 13.0 million square feet in which the company has interest.

“We are excited for the opportunity to expand into the South Florida area,” said James R. Heistand, Parkway’s president and CEO.  “We believe this market is in the early stages of a recovery and has the potential to improve quickly given the diversity and vibrancy of its economy.  Additionally, the South Beach submarket is highly land constrained and boasts a current vacancy rate of only 8.7 percent.”

He added: “Lincoln Place is a high-quality, core asset located one block away from the world-class retail destination of Lincoln Road.”

Built in 2002, the Lincoln Place property consists of 111,000 square feet of office space, 29,000 square feet of retail space on the ground floor, and an adjacent five-story garage with 534 parking spaces. The property is currently 100 percent leased to LNR Corporation through June 2021 with no renewal or early termination options.

Company officials say that Parkway is under contract to acquire Lincoln Place in exchange for the assumption of the existing secured first mortgage, which has a current outstanding balance of approximately $49.6 million, a fixed interest rate of 5.9 percent that matures in June 2016, and the issuance of 900,000 operating partnership units. Based on Parkway’s closing stock price of $18.20 on May 3, 2013, the implied purchase price would be approximately $66 million, or $472 per square foot.

The deal is expected to close by the end of the third quarter of 2013, subject to customary closing conditions, the successful assumption of the existing first mortgage, and Parkway’s satisfactory completion of due diligence.

Images via CoStar

For more Miami market data, click here.

Three-Building Industrial Portfolio in Sunrise Trades for Nearly $40M

By Georgiana Mihaila, Associate Editor

CBRE recently assisted Irving, Texas-based Cobalt Capital Partners in finding a buyer for a three-building, Class A industrial portfolio located within the prestigious Sawgrass International Corporate Park in Sunrise, Fla. Industrial Income Trust of Denver paid $39.35 million for the Sunrise Distribution Center, located at 900 International Pkwy., 14599 NW 8th St. and 13801 NW 4th St.

Totaling 401,650 square feet and featuring 24- to 26-foot clear heights, the buildings in the portfolio were first acquired by Cobalt Capital in August 2010, at the time boasting a 91 percent occupancy rate with one vacancy. Cobalt leased the vacant space and renewed two other tenants on a long-term basis during its ownership.

“This transaction is a good example of our value-add program in the light industrial sector,” said Lewis D. Friedland, Cobalt’s Managing Partner. “Through leasing activity and capital improvements, our asset management and leasing teams worked together to add a significant amount of value to this asset for our investors.”

As part of the Sawgrass International Corporate Park, the buildings benefit from access to nearby interchange of I-75, I-595 and Sawgrass Expressway. Buyer Industrial Income Trust owns two other properties within the Corporate Park.

Christian Lee and Chris Riley, both vice chairmen within CBRE Investment Properties, represented seller Cobalt Capital Partners, assisted by Charles Foschini, vice chairman of Debt & Equity Finance; Tom O’Loughlin, vice president of Industrial Properties Brokerage; and José Lobon, associate of Capital Markets Institutional Group.

In other industrial news, Terreno Realty Corporation signed a Miami-based paperboard packaging and printing company to occupy one of its properties in Doral, Fla. The company, whose name has not been disclosed, will occupy the entire 75,000-square-foot facility at 1401 NW 78th Ave. starting June 1, 2013, with the lease ending October 2020.

Images via Cobalt Capital Partners

For more Miami market data, click here.

PREI Enters Brickell District with $185M Office Tower Purchase

By Georgiana Mihaila, Associate Editor

The 30-story, Class A Sabadell Financial Center located in the upscale Brickell Financial District of Miami recently traded owners. The buyer, Prudential Real Estate Investors—acting on behalf of institutional investors in its flagship core open-end commingled fund—paid $185 million for the high-profile property, also known as 1111 Brickell.

PREI, the real estate investment, management and advisory arm of Prudential Financial Inc., purchased the tower from Spain’s Testa Inmuebles en Renta, which paid $132 million for the building back in 2002, the South Florida Business Journal reports. Testa is the property-rental arm of Sacyr Vallehermoso, one of Europe’s largest commercial real estate and construction conglomerates. This latest acquisition reflects PREI’s strategy to capture opportunities for investors created by the neighborhood’s attributes.

Sabadell Financial Center, located right between Brickell Avenue and Brickell Bay Drive, is one of Miami’s most desirable and best placed office buildings. Originally built in 2000, the 523,000 square-foot building is 85 percent leased to a mix of prominent financial services companies and major law firms.

The building is connected to the 22-story JW Marriott Hotel, which is not part of the acquisition but serves as a convenient amenity for the office tower. Sabadell Financial Center recently commenced the process of attaining LEED certification for existing buildings with an objective to achieve an Energy Star 25 rating and a Silver Certification.

PREI has disclosed plans of enhancing the property through additional capital investments designed to attract new multinational and regional tenants, while also retaining existing occupants.

“With Miami growing in stature among the top business and financial hubs in the Americas, the timing was ripe for PREI’s entrance into the Brickell market,” said Cathy Marcus, managing director at Prudential Real Estate Investors and senior portfolio manager for the firm’s core open-ended equity commingled real estate strategy. “With a location in the sought-after Brickell district and an enviable tenant base, Sabadell Financial Center is a perfect fit with our investment strategy.”

Miami-based Blanca Commercial Real Estate will be spearheading the leasing and marketing efforts for the 30-story tower.

Image via 1111 Brickell official website

Iconic Miami Tower Wraps Up First Sky Lobby Modernization

By Georgiana Mihaila, Associate Editor

Looking to retain its spot as a premier business address, Miami Tower has just completed a major renovation and modernization of its Sky Lobby. The lobby—a unique configuration of indoor and outdoor space—encompasses nearly 35,000 square feet and is marketed as a place where the public and private can gather in a contemporized space, upgraded with modern technologies and amenities.

“The design of the Sky Lobby modernization enables the space to be an accessory to the I.M. Pei design, where the features add character to the building, rather than to compete,” said Eric Groffman, senior vice president with Transwestern, the exclusive leasing agent for Miami Tower. “Less than two years after purchasing the asset, the ownership reinvested into the property, anticipating a strong reaction from existing and prospective tenants alike.”

This is merely the first in a series of modernization works. Phase I added a free flowing one-of-a-kind art sculpture mounted on a main wall, designed by Miami designer Peggy Nye & Lodin; a 21-foot by 14-foot glass wall that creates a central focus for the Sky Lobby, work of the same designer; furniture segmented into quads, featuring orange Knoll Studio accent chairs and stools, flat panel monitors, cafe dining furniture and outdoor lounge chairs, bar stools, bar tables and several unique shade sails; as well as white leather sofas and lounge chairs in the interior space, all classics designed by Le Corbusier in the late 1920s.

The 618,990-square-foot, 47-story Class A Miami Tower is one of Miami’s most recognized office buildings, marking the local skyline with its changing palette of exterior lighting schemes, which feature seasonal, city, sports and private event themes. Designed by legendary architect I.M. Pei, Miami Tower is located at 100 S.E. 2nd Street and is home to notable tenants such as UBS, Carlton Fields, Boies, Schiller & Flexner LLP and Genovese Joblove & Battista PA, all of which have either renewed and/or expanded within the past 24 months.

Image courtesy of Marc Averette