Trophy Office Property Goes On The Block

The first trophy office property in South Florida for 2012 has been listed for sale.
Miami Center is the first to hit the market this year, according to the broker hired to work a deal.
Sumitomo Corporation of America retained Miami broker John Bell of Rockwood Real Estate Advisors to market the building at 201 S. Biscayne Blvd. Sumitomo wants to sell a 90 percent stake in the 786,000-square-foot building, which is adjacent to the InterContinental Miami hotel, and retain 10 percent ownership, according to Bell.
The company “is trying to restructure the capital stack” and would be flexible about the structure of a joint venture with another investor, according to Bell. But the “absolute primary goal” is to sell the 90 percent stake and preserve the 10 percent ownership position, he said.
Sumitomo paid about $260 million, or about $332 per square foot, for the 34-story building in 2008, but has not disclosed an initial asking price.
Miami Center is about 84 percent leased, according to CRE-sources‘ data. Major tenants include Citibank, which occupies more than 157,000 square feet; the law firm Shook Hardy & Bacon, which leases about 86,000 square feet; and the law firm Shutts & Bowen, which occupies more than 68,000 square feet.
Miami Center recently completed significant design enhancements throughout its lobby.
Earlier this month, Transwestern, who leases and manages the building, announced that Levine Kellogg Lehman Schneider & Grossman agreed to a new lease for nearly 15,000 square feet and Black Srebnick Kornspan & Stumpf signed a long-term lease renewal for close to 11,000 square feet.
Maturing debt could be a factor in Sumitomo’s decision to market Miami Center. According to CMBS analytics firm Trepp, a $170 million loan secured by the building is to mature this year. Bell declined comment on the status of the loan, other than to confirm that there is an existing mortgage on the property. “The asset is being offered free and clear of debt,” Bell said. “The loan would be paid off” at the time of sale.
Although South Florida’s most expensive office deals in 2011 occurred in Broward and Palm Beach counties, Sumitomo executives would likely be encouraged by the per-square-foot prices those investors paid. J.P. Morgan spent $400 per square foot on Bank of America Plaza at Las Olas CityCentre in downtown Fort Lauderdale. That sale was only surpassed by the $421 per square foot KBS Realty Advisors paid in April 2011 for CityPlace Tower in West Palm Beach.
But Sumitomo, the New York-based subsidiary of Japanese conglomerate Sumitomo Corp., paid a top-of-the-market price for Miami Center in September 2008, while the U.S. economy plunged into a recession. Real estate experts say the company would be fortunate to obtain a similar sale price this time around.
Broker Robert Orban, senior vice president and co-branch manager at tenant representation firm Studley, predicts that Miami Center should sell for $250 million to $275 million, or about $318 to $350 per square foot.
Source:  DBR



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