No Comments

Co-Working Giant Closing Outpost In Miami Beach In Bankruptcy Restructuring

WeWork-429 Lenox Avenue-South Beach_Photo Credit WeWork 1170x435

WeWork, which filed for Chapter 11 bankruptcy restructuring in November, put the branch at 429 Lenox Avenue in Miami Beach on the chopping block, according to a notice WeWork filed in court on Thursday.

The closing would be the first Miami-Dade County outpost WeWork wants to scrap as part of its restructuring plan. The outpost is among those listed in the filing’s “schedule of rejected unexpired leases.”

WeWork has six branches in South Florida, all of them in Miami-Dade County. This month, it announced it’s keeping four outposts. They are at the Wynwood Garage, 360 Northwest 27th Street in Miami’s Wynwood neighborhood; 78 Southwest Seventh Street in Brickell City Centre in Miami; and two Coral Gables at 2222 Ponce de Leon Boulevard and at 255 Giralda Avenue in the Giralda Place. Both of the Coral Gables offices are at the Giralda Place mixed-use complex.

The fifth outpost is at the Southeast Financial Center at 200 South Biscayne Boulevard in downtown Miami. In 2017, WeWork leased 90,000 square feet on four floors at the 55-story tower owned by billionaire Amancio Ortega’s Pontegadea real estate firm.

The Southeast Financial Center branch is listed in the “schedule of assumed unexpired leases” in WeWork’s court notice, signifying it may also be keeping this outpost.

WeWork first filed a motion to reject its Miami Beach lease last month, though the firm said it was still hoping to remain at the location. At the time, a WeWork spokesperson said that it was in talks with the building’s owner but so far had been “unable to reach an agreement with our landlord,” the South Florida Business Journal reported. The April filing to potentially reject the lease was submitted to the court in case WeWork fails to reach a deal with the landlord.

Now, WeWork confirmed it had finalized its decision to close the outpost.

 

Source:  The Real Deal

No Comments

WeWork’s Last Remaining Miami Beach Office Is Up In The Air

WeWork-429 Lenox Avenue-South Beach_Photo Credit WeWork 1170x435

Major coworking space operator WeWork submitted a move to revoke the lease at its Miami Beach facility.

Based in New York, WeWork submitted a motion to the United States Bankruptcy Court District of New Jersey to reject two leases on April 16. One of the leases is in South Beach at 429 Lenox Avenue. The other is in Irvine, California. On May 31, WeWork may terminate both leases, per court filings.

A spokeswoman for WeWork said the company wants to remain at Lenox Avenue, but has to make preparations to exit in case a deal can’t be worked out. WeWork is the sole tenant in the five-story building.

 

Source:  SFBJ

No Comments

Real Estate Lending Firm To Open 8,000-SF Wynwood Office

Arbor Realty Trust, a publicly-traded lender of residential rental projects, will move into an 8,000-square-foot office in Miami’s Wynwood Arts District later this year.

The Uniondale, New York-based company with $16.59 billion in assets as of March will open an office on the seventh floor of Wynd 28, an eight-story building at 127 N.W. 27th Ave. Its Miami office is currently in a WeWork space at 360 N.W. 27th St. in Miami.

Arbor Realty Trust specializes in providing financing for multifamily and single-family rental portfolios and other diverse commercial real estate assets.

The company opted to stay in Wynwood because the location “symbolizes the trends and growth potential of the Miami market as the neighborhood has emerged as a marquee hub for young creatives — not unlike Brooklyn and Arts District Los Angeles,” the company stated. The neighborhood is also part of Miami’s downtown submarket, “which accounts for one-fifth of the Miami multifamily market’s total inventory.”

Available office space for Wynd 28 is listed on LoopNet.com for $65 per square foot.

 

Source:  SFBJ

No Comments

Industrious To Open 40,000-Square Foot Coworking Space In South Beach

Industrious, a coworking space provider based in New York, is coming to South Beach with a new 40,000-square-foot location.

Peri Demestihas, Industrious’ senior director of real estate, said his company aims to open its fifth South Florida location at 350 Lincoln Road this summer. It will occupy the space previously filled by WeWork from November 2014 until August 2018, when the company was forced to scale back its operations.

“We are really excited about it. South Florida is the hottest market in the country for us,” Demestihas said.

Nancy Cibrano, asset manager for The Wings Group, the New York-based landlord of the Lincoln Building, stated that Industrious beat out other coworking office companies who sought WeWork’s old space. The real estate agency paid $14 million for the five-story Lincoln Building in April 2008. The property was built in 1946.

“After a very long vetting process, Industrious was a clear choice with its proven success record in being the highest-rated flexible workspace provider,” Cibrano said in a press release.

The South Florida office market in general has been thriving thanks to the migration of out-of-state companies into the region as well as local expanding companies. Brokers credit the state’s low regulations, good weather, and lack of income tax for the office market upswing.

 

Source:  SFBJ

No Comments

Downtown Miami Office Building Targeted In Foreclosure

The Security Building, a 95-year-old office building in downtown Miami, is the subject of a $37.2 million foreclosure lawsuit.

Platform Capital Funding filed a foreclosure lawsuit Dec. 22 against Security Building AR Owner LLC, along with loan guarantors Richard Weisfisch, Andrew Joblon, Arash Gohari and Daniel Gohari.

WeWork, the anchor tenant at the property, remains open. WeWork is not named in the lawsuit, and there is no lawsuit against WeWork from the landlord.

The complaint concerns the 92,910-square-foot office building at 117 N.E. First Ave. The 17-story building was constructed on the 7,500-square-foot lot in 1926, making it one of the oldest office towers in the downtown area.

 

Source:  SFBJ

No Comments

Swire Sells Brickell City Centre Office Buildings

Swire Properties sold two office buildings at Brickell City Centre for $163 million, marking the largest sale to close in South Florida during the pandemic.

Two Brickell City Centre and Three Brickell City Centre LLC, led by Swire Properties President Kieran Bowers sold the office portion of 78 Southwest Seventh Street and 98 Southeast Seventh Street in Miami to US VI 2 Brickell LLC and US VI 3 Brickell LLC, affiliates of Northwood Investors. Tenants include Akerman LLP and WeWork.

The combined $163 million purchase breaks down to $80.3 million for Two Brickell City Centre and $82.7 million for Three Brickell City Centre. Each building has about 130,000 square feet, which means they sold for roughly $630 per square foot.

In a statement, a spokesperson for Brickell City Centre said the buildings are nearly 100 percent occupied and that Swire plans to use the cash for future developments.

Northwood, a Denver, Colorado-based investment adviser, had about $8 billion of assets under management as of December. That includes Cheeca Lodge & Spa in the Florida Keys and the mixed-use project under construction at 1177 Kane Concourse in Bay Harbor Islands.

Swire’s more than $1 billion Brickell City Centre development also includes the East Miami hotel, condo towers Reach and Rise, and the open-air shopping center anchored by Saks Fifth Avenue and the luxury movie theater CMX. Two and Three Brickell City Centre were completed in 2016. Arquitectonica was the lead architect.

Swire Properties is headquartered at Brickell City Centre, but the company is a subsidiary of Hong Kong-based Swire Properties Limited.

The developer has plans for a second phase of Brickell City Centre. In early 2019, Swire and businessman Carlos Mattos scored final approval for a 100,000-square-foot-plus expansion that would have a 54-story, 588-unit residential tower, another 62-story, 384-unit residential tower, commercial space and parking.

 

Source:  The Real Deal

No Comments

Silicon Valley Heads To Wynwood’s Office Market

Wynwood has changed quickly from the early 2000s, when it was home to a number of galleries that came alive the second Saturday of the month, to an established tourist destination with an active nightlife scene. Today, it has residents and short-term rentals, restaurants, breweries and bars, and hotels on the way.

Now, it’s also emerging as a new office submarket in Miami, even amid the coronavirus pandemic.

Wynwood is seeing a number of new office projects, as major developers target the artsy district, aiming to add hundreds of thousands of square feet of office space. Big name tenants have signed leases, like Spotify, Live Nation and WeWork. Apple Music, Google, Dentsu and other creative marketing agencies have also been looking in the market, brokers and developers say.

The office vacancy rate in Wynwood is expected to spike this year, when most, if not all of the office space is delivered. Already, there is 180,000 square feet of new space in the market, with another 350,000 square feet under construction. That doesn’t include 500,000 square feet more office space in the pipeline, according to Albert Garcia, chairman of the Wynwood Business Improvement District.

Garcia and others expect that the new supply will get absorbed.

“We’ve seen development happen evenly. We’re very pleased with how the market has reacted to zoning guidelines,” he said. “You have to remember, prior to that there was zero Class A office in the neighborhood. Over the next six to 24 months, you’re going to see new office leases moving within the market from Brickell, Doral, Coral Gables.”

Covid-19’s effects

And now, with the uncertainty surrounding the Covid-19 outbreak, Garcia and others believe that Wynwood will be well-positioned to attract new office tenants to the neighborhood.

“The good news is that these are all state-of-the-art office environments that will be adaptable and scalable in ways that the new office tenants are going to be looking for, places that are safe, that offer flexibility in workspace,” Garcia said.

Yet, some developers are pulling back, attorney Steve Wernick of Wernick & Co. said. The pandemic will likely cause a correction in the market and slow down office absorption, forcing landlords to adjust their pricing and the types of tenants they’re trying to attract.

“Wynwood is resilient, it always bounces back. We had Zika,” Wernick said. “Businesses that have capital and have long-term growth potential might be able to secure the office space they need that’s advantageous to them.”

Other market sectors

Brokers and developers expect space to also be absorbed in multifamily and other sectors of the market. Besides Related and East End, the Kushner Companies with Block Capital Group, as well as homebuilding giant Lennar Corp. have multifamily-anchored mixed-use projects in the works.

“At the end of the day, it’s a real neighborhood,” said Gaston Miculitzki of BM2 Realty, a Wynwood-based brokerage.

It’s unclear yet how deep the impact of coronavirus will be. Brokers Tony Arellano and Devlin Marinoff of Dwntwn Realty Advisors said the pandemic will eventually result in opportunities for tenants – and for investors.

“Now if you’re buying something, you’re buying it at a good value,” Arellano said. “All of the foam of the market got taken off.”

Grocery stores and major pharmacy chains are also eyeing the market, according to commercial broker Tere Blanca.

Office space supply

Sterling Bay, a Chicago developer that has built and leases space to McDonald’s Uber, Glassdoor and Twitter, officially entered the Wynwood market in 2018. Sterling Bay is building 545 Wyn, a 10-story, 325,000-square-foot Class A office building that will be completed later this year. It’s the biggest office project under construction in Wynwood.

Michael Lirtzman, director of leasing, said the developer’s aim is for tenants to move in by the end of the year. At 545 Wyn, the developer has secured Gensler, a major design and architecture firm, which signed a lease for 13,000 square feet.

Gross rents are in the high $50s and $60s per square foot for new construction in Wynwood, brokers and developers said.

Lirtzman said the push into a neighborhood like Wynwood is typical for Sterling Bay. “We tend not to go for the traditional downtown high-rise markets. We’ve gone into neighborhoods with a little more live, work, play,” he said.

Wynwood, previously home to a number of industrial warehouses, is similar to Chicago’s Fulton Market district, near the west side of Chicago, where Sterling Bay is looking to sell the McDonald’s global headquarters building, Lirtzman added.

Amenities in Wynwood are comparable to those offered by residents of new apartment towers in downtown Miami, Edgewater and the Arts & Entertainment District.

Once completed, 545 Wyn will include a 4,700-square-foot fitness center with spinning and yoga, a 17,000-square-foot terrace on the fifth floor with a full kitchen and bar, and 26,000 square feet of ground-floor retail space for three large food and beverage and entertainment tenants.

The companies the developer is courting “want their people to be comfortable in the building,” Lirtzman said. “They’re using their real estate as a recruitment tool.”

More projects completed and planned

When Sterling Bay went under contract on the Wynwood land more than two years ago, the developer had no competition.

But now, new office projects are popping up throughout Wynwood. 545 Wyn is being built on the west side, fronting I-95, where larger office projects were or are planned. The Oasis in Wynwood, a mixed-use adaptive reuse project under construction at 2335 North Miami Avenue is east of that, on the northeast corner of the neighborhood.

In January, New York-based R&B Group broke ground on the Gateway at Wynwood, a 460,000-square-foot mixed-use building on the northern outskirts of Wynwood, at 2916 North Miami Avenue. The project will have about 195,000 square feet of office space, plus retail, a rooftop terrace and a garage.

About a year ago, CIM Group closed on a $71.2 million construction loan for a 12-story Wynwood Square mixed-use development at 2201 North Miami Avenue. The project, with 241 apartments and about 27,000 square feet of retail, will have about 60,000 square feet of Class A office. One Real Estate Investment is a co-developer of the project.

The Annex, a 52,000-square-foot office building that Related Group and East End Capital completed last year next to their Wynwood 25 apartment building, is west of Second Avenue, Wynwood’s “cultural spine,” said Garcia, of the Wynwood BID. Tenants there include Live Nation Entertainment, which took nearly 8,000 square feet.

Jonathan Yormak, founder and managing principal of East End Capital, said full service asking rents are about $57 per square foot at the Annex.

Directly across the street is Cube Wynwd, an eight-story, 86,000-square-foot Class A building developed by RedSky Capital and equity partner JZ Capital Partners. Regus was the first tenant to sign and open, taking 21,000 square feet at the Class A building.

In addition to tenants relocating from downtown Miami and Brickell, developers and brokers said there are a number of new-to-market companies looking to plant their flag in Wynwood.

WeWork opened last year at the Wynwood Garage, taking 30,000 square feet at 301 Northwest 26th Street, marking the largest office lease in the neighborhood, according to broker George Pino, president of State Street Realty. The office market in Wynwood is just now in its infancy, he said.

Wooing tenants

Some of the largest TAMI (technology, advertising, media and information) tenants have their eyes on Wynwood – but not necessarily on specific buildings.

Take Spotify. The music streaming company toured 545 Wyn and other projects in the neighborhood before deciding to take all of the 20,000 square feet of office space at the Oasis in Wynwood.

“What’s important about the Spotify lease is Spotify had identified Wynwood. It wasn’t like they were between the Oasis in Wynwood and two buildings in Brickell and Coconut Grove,” said David Weitz, co-founder of Carpe Real Estate Partners, developer of the Oasis.

Not every company is choosing to be in Wynwood, though. Yext, a New York City-based brand management technology firm, looked at Wynwood before deciding to open its Miami office at 600 Brickell Avenue, near Brickell City Centre, sources said.

Erik Rutter, co-founder of Carpe Real Estate Partners, said Spotify wanted to create a campus for its employees where the company could create programming. A rendering of the space shows a stage in front of the Spotify logo.

As a gateway to Latin America, Miami has long attracted a number of creative marketing agencies, but the tech scene has been much smaller, beginning with the LAB Miami, the first co-working space and first coding academy, Wyncode.

Now, that’s changing.

“Wynwood is very culture rich. A lot of submarkets in Miami, from an office market perspective, [prospective tenants] don’t feel like there’s a lot of character,” Weitz said. “I think the low-story pedestrian-oriented nature in Wynwood really makes it attractive. It has culture. It has character. It’s walkable.”

 

Source:  The Real Deal

© 2024 FIP Commercial. All rights reserved. | Site Designed by CRE-sources, Inc.