Iconic Miami Tower Office Building Fetches $105.5 Million In Market's Largest Office Building Sale Of 2010
In a sign that demand for South Florida's trophy real estate assets persists despite economic volatility, I&G Miami, Inc. has purchased downtown Miami's landmark Miami Tower office building from owner Blue Capital US East Coast Properties, L.P. for $105.5 million. Designed by renowned architect I.M. Pei and constructed in 1987, the 600,000 square foot, Class A Miami Tower has grown to become one of the world's most recognized office buildings due to its changing palette of exterior lighting schemes. The transaction, which closed on December 17, 2010, ranks as the highest-valued real estate trade in the Miami market this year.
Details of the sale were made public by Manny de Zarraga and Hermen Rodriguez of HFF(Holliday Fenoglio Fowler, L.P.), who represented seller Blue Capital US East Coast Properties, L.P. in the transaction. Attorney Carey Stiss of Bilzin Sumberg Baena Price & Axelrod LLP served as legal counsel for the seller, which is affiliated with Atlanta, Georgia-based Wealth Capital Investments, Inc.
Several factors contributed to steady interest among prospective buyers since Miami Tower was placed on the market earlier this year, according to Manny de Zarraga of HFF. "Once we zeroed in on a buyer for Miami Tower, both parties involved recognized that we were dealing with a trophy asset sporting a strong occupancy rate, stable balance sheet and a grade-A tenant roster. The Tower's iconic status on the downtown Miami skyline was an added plus. In the end, this is a classic example of a quality asset attracting a quality institutional owner. This trade is a big boost for the Miami real estate market and we expect a spark of momentum will stem from this sale heading into 2011."
Attorney Carey Stiss of Bilzin Sumberg pointed out that among the challenges presented by this transaction, Miami Tower is situated atop a City of Miami-owned parking garage, meaning that the City's consent was required to proceed with the closing. "In an economic climate where capital can be difficult to secure and transactions tend to encounter steep obstacles en route to closing, the sale and purchase of Miami Tower proves that institutional owners looking to add top-tier assets to their portfolios can still access financing and get deals done," said Mr. Stiss. "The fact that this complex transaction closed on a relatively short timeline is an encouraging sign for would-be owners in the market to acquire premium commercial assets in South Florida."
Among the factors that drew prospective buyers were Miami Tower's track record of steady leasing activity among high-quality tenants and its current occupancy rate of 80%, which continues to outpace the market average. Building tenants include law firm Carlton Fields, UBS Financial Services, law firm Boies Schiller & Flexner, Vector Group and law firm Buchanan Ingersoll & Rooney. In addition, the tower houses more than 20,000 square feet of street-level retail space that is home to an Au Bon Pain caf, U.S. Century Bank, and an on-site dry cleaning service.
Beyond strong occupancy, Miami Tower's previous ownership team earned accolades for its sound operations and asset management. Recent initiatives included a $2 million capital improvement project and a robust energy efficiency and sustainability program involving environmentally-sound upgrades and the launch of an on-site recycling program. These initiatives were key factors in the building's receipt of "Office Building of the Year" honors from the Building Owners and Managers Association (BOMA) in 2007, 2008 and 2009.
Features setting Miami Tower apart in the competitive downtown Miami office market include convenient access to I-95, an onsite MetroMover station with connections to MetroRail and Tri-Rail, a state-of-the-art health club, a sit-down restaurant and adjacent indoor/outdoor event space that can accommodate up to 1,500 guests and an auditorium with seating for 150 people.
About Bilzin Sumberg
Bilzin Sumberg Baena Price & Axelrod LLP is a full-service, commercial law firm based in Florida. The firm has extensive experience in the areas of commercial finance, corporate and securities, environmental law, government relations, land use, litigation, real estate, restructuring and bankruptcy, tax and wealth transfer. For more information, visit www.bilzin.com.
About Holliday Fenoglio Fowler, L.P.
Holliday Fenoglio Fowler, L.P. ("HFF") and HFF Securities L.P. ("HFFS") are owned by HFF, Inc. (NYSE:HF). HFF operates out of 17 offices nationwide and is a leading provider of commercial real estate and capital markets services to the U.S. commercial real estate industry. HFF together with its affiliate HFFS offer clients a fully integrated national capital markets platform including debt placement, investment sales, advisory services, structured finance, private equity, loan sales and commercial loan servicing. www.hfflp.com.
About Miami Tower
Miami Tower offers tenants the powerful combination of upscale amenities with the convenience of downtown Miami's central location. The 600,000 square-foot office tower, which overlooks downtown Miami and Biscayne Bay, was designed by world renowned architect I.M. Pei and is widely recognized for its changing palette of exterior lighting. Amenities include an eleventh-floor Sky Lobby and Terrace, three restaurants, a health club, a 150-seat auditorium, florist, hair salon, retail facilities and a modern communications infrastructure. Offering direct access to I-95, the Tower has its own MetroRail Station and is connected to the Miami Convention Center and the Hyatt Regency Miami. Visit www.MiamiTower.net to learn more.