The Weekly Dirt: Will developers’ Brickell office bet pay off?

Planned office towers in Brickell are devoid of preleasing. Will they get built?

Miami’s financial district’s success since the pandemic has made headlines across the country. It’s the site of billionaire hedge fund manager Ken Griffin planned mixed-use office tower on the bay, where his firms Citadel and Citadel Securities will have their headquarters. 

So, developers are doing what developers do. As Vlad Doronin’s 830 Brickell, which was fully preleased during construction, nears completion, other developers are planning additional glassy towers with the high-end amenities to match. 

Preleasing is underway for at least two of the towers, 848 Brickell (Key International) and One Brickell City Centre (Steve Ross’ Related Companies and Swire Properties). Banco Santander plans a third to replace its existing office building. Construction hasn’t started for any of them, except for demolition at One BCC. 

But tenants have not signed leases at any of the three major high-rises in the works, Lidia Dinkova reports.

The buildings would add 2.8 million square feet to the market. 

Cresa broker Robert Orban says that all of those towers will probably not get built because it’s near impossible to get sufficient preleasing to lock in construction financing right now. Leasing activity in Miami-Dade County is increasingly for smaller offices. The only major new lease signed — not renewals — was Apple’s lease for 42,000 square feet at the newly completed Plaza megaproject in Coral Gables. 

The rush of out-of-state companies signing headline-worthy leases has ended. 

Still, Brickell’s office market is healthier compared to other major cities in the U.S.

“It’s a question of will there be enough demand?” Orban said.

What we’re thinking about: A receiver was appointed to take over an older condo complex in Pembroke Pines, after a majority of the units/buildings were declared unsafe, which the association alleges is due to intentional mismanagement of the property. Do you have a similar story to share? Send me a note at kk@therealdeal.com. 

CLOSING TIME 

Residential: Interior designer Victoria Hagan and her media mogul husband, Michael Berman, sold the 9,700-square-foot, five-bedroom home at 130 Banyan Road in Palm Beach for $60.4 million, marking one of the priciest non-waterfront homes sold on the island. A trust purchased the 1-acre property. 

Commercial: Ares Industrial Real Estate Investment Trust sold the two warehouses at 1280-1300 Northwest 22nd Street and 2151 Blount Road in Pompano Beach for $23.8 million. Invesco acquired the 5.7-acre site, which has about 105,000 square feet of industrial space. 

NEW TO THE MARKET 

Spec home developer and former race car driver Eddie Irvine is listing his waterfront 0.3-acre estate at 424 West Rivo Alto Drive in Miami Beach for $38 million. The Venetian Islands house is under construction and could be completed at the end of this year, according to the listing. “Purchase while under construction + save 3 years of your life avoiding planning and building,” it reads. Julian Johnston of the Corcoran Group is the listing agent.

A thing we’ve learned 

University of Miami student Matt Bergwall orchestrated a sophisticated refunding scheme to the tune of $5 million, allegedly facilitating nearly 10,000 fraudulent returns between the end of 2021 and April 2022 — just five months — according to New York Magazine’s feature on Bergwall. 

Elsewhere in Florida 

• A senior airman in the U.S. Air Force was shot and killed Friday by a sheriff’s deputy in Okaloosa County, NBC News reports. Law enforcement forcefully entered the wrong home, killing Roger Fortson, a 23-year-old Black man. That deputy was placed on administrative leave. 
• Heritage Insurance was fined $1 million by the Florida Office of Insurance Regulation over how the Tampa-based firm treated policyholders with claims after Hurricane Ian. Heritage has nearly 150,000 policies in the state, according to the Tampa Bay Times. 
• Nearly all of Donald Trump’s children will serve as delegates for the Florida Republican Party at the GOP’s presidential convention in July, led by delegation chairman Eric Trump. That’s not uncommon, but it shows Trump’s domination in Florida, less than a year after Gov. Ron DeSantis launched his short-lived presidential campaign, the Orlando Sentinel reports.