It’s a property that has had many uses over the years, including a sales office for CityPlace South Tower condominiums. Most recently, the 8,000-square-foot building has been used by Digital Domain as a display center for the company’s former affilation with Florida State University. The building consisted of administrative offices, marketing and enrollment services. But there won’t be much need for that in the near future after Digital Domain’s Chapter 11 bankruptcy filing and the severing of the company’s ties to FSU.
With the office market starting to recover from its long slide, Related is betting that by 2015, when the property is set to open, there will be fresh demand for a state-of-the art office building downtown, complete with hurricane-resistant windows.
Related now is marketing the property with the help of brokerage Cushman & Wakefield. According to a marketing brochure, the 200,467-square-foot property will have ground level retail of 16,000 square feet. It will have valet parking and several floors of interior parking with offices starting on the sixth floor.
Office rental rates are between $32 and $36 a square foot, not including $16 a square foot for operating expenses, said Mark Pateman, Cushman & Wakefield director. Typical floor sizes are about 27,522 square feet but a penthouse level will be 25,091 square feet.
There always have been plans to develop the site, but the property hasn’t been marketed heavily until now. That’s because Related recently has been fielding inquiries from major users as the office market finishes its down cycle and starts a new up cycle, Pateman said.
Pateman said Related has no intention of building the office on “spec,” without tenants already in mind. “But we’ve got enough serious interest to anchor a building and get it out of the ground,” Pateman said. If all prospects commit, the property could be 90 percent leased before it opens.
The unidentified potential users include a household financial services company, a large law firm and a company in need of a headquarters.
Pateman said the building will be the most visible office tower from Interstate 95, and that provides excellent opportunities for companies to make their presence known as visitors enter the city. “The branding opportunies are huge,” Pateman said.
But at least one broker wondered whether prospects would be willing to wait three years for the project’s completion.
“If they have 90 percent in pre-leasing, they should try to find a way to get it built faster than 2015,” said Neil Merin, chairman of NAI/Merin Hunter Codman in West Palm Beach. Merin said it’s very hard to pre-lease a building and deliver it to all the tenants at the same time if the delivery date is more than a year away.
One interesting issue is which will be built first: Related’s new office building — or the convention center hotel that Related is supposed to be constructing across the street?
The hotel was slated to open in 2015 but with political issues raising fresh doubts about how much taxpaper money will be involved in the project, it’s still not clear when, or whether the hotel will ever get out of the ground. Shannon LaRocque, assistant county administrator, said 2015 still is the target date for the hotel’s opening.
Source: Palm Beach Post
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