The deed to a Brickell Avenue office building housing Helm Bank USA and other financial industry tenants has been transferred by a Boston company seeking to avoid foreclosure on a $22.1 million loan. A deed in lieu of foreclosure was filed on Aug. 19 by Brickell CFII, an affiliate of The Congress Group. The Boston firm had owned the 999 Brickell Ave. office building since August 2007, when it paid $28.5 million, according to Miami-Dade County records.
Helm Bank USA anchors the 11-story, 97,500-square-foot 999 Brickell building. The 38-year-old Class B office building is currently about 85 percent occupied, according to CRE-sources. Other tenants include Geico, Midway Financial Services and Allied Medical.
The buyer is 999 Brickell Property of Miami, according to Miami-Dade records. In June, the company in assumed Congress’ $22.1 million mortgage originally obtained from HSBC Realty Credit. Congress had received a $22.54 million loan from HSBC at the time of its acquisition of the building.
CB Richard Ellis vice president Nöel Steinfeld and senior associate Chris Dekker handle leasing at 999 Brickell for Congress. The brokers are marketing available space at the building from $29.50 to $32.00 per square foot.
Congress might still have a stake in 999 Brickell following the deed transfer, according to one tenant in the building. Tenants have not been notified of any ownership changes by Congress or the property management team, said Jay Caplin, managing principal at Miami-based Steelbridge Capital. Steelbridge’s Miami office is located at 999 Brickell. “My gut feeling, without any factual confirmation, is that Congress Group still has something to do with the ownership, but with new investors and new financing,” Caplin said.
The building has managed to stay competitive in a crowded Central Business District office market where smaller tenants in Class B and C buildings are tempted with opportunities to move into Class A trophy buildings, he said. “When there is overbuilding, there is always a flight to quality,” Caplin said. “But that doesn’t mean there is not still a layer of demand for Class B buildings. Some tenants don’t want to pay the higher rents.”
By recapitalizing through the deed transfer and mortgage assignment, Congress would be in a position where its brokers could aggressively court office tenants by offering below-market rents, according to broker Matthew Cheezem, senior advisor at CresaPartners. Cheezem represents numerous office tenants who have toured 999 Brickell. He does not represent any current tenants at the building.
Congress “has been pretty successful over the past 24 months ramping up their leasing efforts,” said Cheezem, who estimated that the building was 50 percent vacant two years ago. Several tenants who are new to the Brickell office market, including Aspen Reinsurance, have recently leased space at 999 Brickell.
“They implemented a program where they built out many of the spaces on a [speculative] basis and were successful with that,” Cheezem said. “They identified niche market tenants who needed to be in the space quickly and did deals that way.”
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