Posted Mar 11, 2024, 1:20 PM
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New Yorker for life
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Join Date: Jul 2001
Location: Borough of Jersey
Posts: 52,417
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I’m sure Related can pull it off…
https://www.wsj.com/real-estate/miam...space-b43b42ea
Miami’s Office Market Was Red-Hot. Now Its Tallest Planned Tower Can’t Fill Its Space.
The 1,000-foot project under construction is still searching for an anchor tenant
By Deborah Acosta
March 11, 2024
Quote:
The challenges swirling around a skyscraper known as One Brickell City Centre, which at around 1,000-feet high would be Miami’s tallest corporate tower, show how the city’s once-sizzling office market is starting to cool.
New York developer Related Cos. and Swire Properties, an international development firm founded by the British Swire family, are struggling to find an anchor tenant roughly a year after the groundbreaking. Related is restructuring its agreement with Swire, which owns the land, according to people familiar with the matter.
Swire even has considered selling the 1.55-acre site in Miami’s downtown, according to a document viewed by The Wall Street Journal.
…Swire said it “continuously evaluates different options for its development sites” and that the one for One Brickell City Centre “is currently not for sale.” Related said it was continuing to work with Swire.
Rising interest rates and hybrid work have punished the U.S. office market. Miami for years weathered such headwinds better than most cities, thanks in part to a steady stream of corporate relocations and limited supply of office buildings.
Now, Miami’s exceptionalism appears to be fading. Leasing activity in the Miami office market was down 25% last year from 2022, according to commercial real-estate services firm JLL. Sublease vacancy increased by 66% through the end of the year, a sign that existing tenants want to cut back on space.
“There’s a slowdown of new-to-market activity,” said Steven Hurwitz of JLL. “We’re sort of at a new inflection point.”
Miami office-construction starts have slowed down after a recent peak in the second quarter of 2023, according to Juan Arias, director of market analytics for CoStar in South Florida. He said that new construction was being affected by higher interest rates, elevated costs for construction material and labor, and a slowdown in leasing activity amid a softer economic environment.
…Related chairman Stephen Ross is among those whose interest in new South Florida projects has intensified. One Brickell City Centre, the 1.5 million-square-foot tower with 68 floors, is one of his more ambitious efforts. At the groundbreaking, Ross called it “the most important project in Miami,” while Swire president Henry Bott said the building would be “a beacon” for the city, with outdoor terraces on almost every floor.
Ross had pledged to bring in big-name tenants to the tower, which is scheduled for completion in 2028. He spoke with Ken Griffin about moving his hedge-fund firm Citadel to the site, according to people familiar with the matter.
In November, the two moguls seemed to deepen their relationship over a mutual interest in football. Griffin was in negotiations to buy a minority stake in the Miami Dolphins, in which Ross is the majority owner, according to people familiar with the matter.
Now the Citadel chief executive is no longer in discussions for a Dolphins stake. His company also passed on becoming the anchor tenant at One Brickell City Centre in favor of developing the waterfront site Griffin bought in 2022, where his plans include a luxury hotel for the top of the office tower.
“I’m not doing anything with Ken Griffin,” Ross told the Journal last month.
Still, the two billionaires indicated they could work together in the future. In a joint statement, Griffin and Ross said they “look forward to partnering together on initiatives that will benefit the community.”
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NEW YORK is Back!
“Office buildings are our factories – whether for tech, creative or traditional industries we must continue to grow our modern factories to create new jobs,” said United States Senator Chuck Schumer.
Last edited by NYguy; Mar 11, 2024 at 1:35 PM.
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