🌴 Boca Beckons Wall Street

Why should Miami and West Palm Beach get all the new office buildings?

If South Florida’s going to have a wave of workplace construction — and buck the national trend of empty office woes — well, then Boca Raton’s getting in on it too.

Plans are afoot for the city by the beach to get its first new downtown office building in 25 years. And for local officials, it’s both a cause for celebration and a tool to boost recruitment of financial firms from elsewhere.

“It’s a really big deal,” said Kelly Smallridge, CEO of Palm Beach County’s Business Development Board — the corporate recruiter-in- chief for 39 municipalities, including Boca.

“A lot of these cities want to land corporate headquarters and higher paying jobs,” Smallridge said. “A mayor will call me and ask: ‘Why didn’t that company consider my city?’ And I’d say, ‘Mayor, where would you put them? What office would they have gone to?’ And they realize they don’t have the infrastructure to win that deal.”

So Boca’s working on that.

Developer Compson Associates has plans to construct two office towers in downtown Boca — at 110 E. Palmetto Park Road and 120 E. Boca Raton Road. The $250 million development, called Aletto at Sanborn Square, will have 128,000 square feet of space for lease within walking distance of the Brightline commuter train. And a rooftop restaurant.

The project won’t break ground until next year, but the search for tenants has started. The landlord is seeking rents of $65 and $75 per square foot, depending on the floor, said Scott Brenner, executive vice president at brokerage Colliers, who’s leading the Aletto leasing team.

That’s a premium for the East Boca market, where Class A office space averaged $41.50 in the third quarter, according to Colliers data.

“The calls have been incessant looking for new Class A space,” Brenner said in an interview. “The financial services arena, from investment bankers to banks—we believe that we’ll get those.”

Even the would-be competition agrees. Mark Corlew owns two buildings across the street from the Aletto site, which his firm, Grover Corlew, acquired and renovated with amenities that well-heeled firms now demand, but are hard to find in older office markets: open floor spaces, common areas with standing islands, and lots more glass windows.

One of those buildings had a 60% occupancy when Grover Corlew acquired it in 2022. It’s now 94% full with rents that have nearly doubled from $47 per square foot to $85 today, he said.

At least 30% of his new tenants are firms that came from outside of Florida, from places like New York, Chicago and California, he said.

“We’re kind of an anomaly of what’s going on in the industry,” Colliers’ Brenner said of Florida’s office market. “People are throwing keys back on Class A office space in San Francisco and other major markets and here we are, saying: ‘We’re counter-cyclical.”

Amazon founder Jeff Bezos announced last night that he’s leaving Seattle, his home for nearly 30 years, and moving to Miami.

Bezos shared the news in an Instagram post. He said his parents —”my biggest supporters” — recently moved back to Miami, where he spent part of his childhood, and he’s seeking to live near them.

The move also brings him closer to Cape Canaveral, where his rocket company, Blue Origin, has been shifting operations, he wrote.

Bezos has already been spending lavishly on local real estate. Last month, he purchased a mansion in Indian Creek for $79 million, Bloomberg reported. He bought the neighboring home a few months earlier for $68 million.

Last week, we wrote about an unusually tall rental tower proposed for Miami Beach. Montreal developer Jesta Group suggested it could build a 30-story building along the iconic Art Deco strip of Ocean Drive. Jesta then whittled the plan to 18 stories after some community pushback.

Local officials still hate the idea, according to this Miami Herald report, which is worth a read if only for the catalogue of Canadian insults.

Let’s make one of them the Quote of the Week:

When Manhattan cafe chain Maman was eyeing new cities for expansion, the natural choice was to follow its loyal patrons— south.

The French bakery and cafe with 31 locations will add as many as 10 new shops to the state over the next few years.

Three are coming now, to neighborhoods in Miami and West Palm Beach heavy with high-end office development —and with relocated New Yorkers who may already be fans of Maman’s chocolate chip cookies and “everything bagel” croissants.

“You’re seeing financial services companies open secondary headquarters, CEOs spending half the year, and there’s plenty of people who moved full time,” to South Florida, said Taryn Brandes, founder of retail brokerage and advisory firm Brand Urban, which represents Maman in its growth plans.

“There’s a lot of brand recognition,” she said.

Maman will locate its flagship Florida store in Miami’s Wynwood neighborhood, with a 4,202-square foot cafe at the base of Sentral Wynwood, a new apartment building with flexible and furnished rentals. It’s also signed leases on Coral Gables’ Miracle Mile, and in West Palm Beach, at a Related Cos. office building within the retail district called “The Square.”

Other out-of-area brands are taking a similar tack— intentionally seeking out South Florida’s office districts as a place to plant a flag.

Canadian chain Cactus Club Cafe announced last month that it will open its first U.S. location in Miami ‘s financial district, inside a 10,000-square foot space in the Citigroup Center. Brand Urban represented the cafe in its location search.

“There’s a lot of eyeballs from national brands on South Florida,” Emily Green, a Brand Urban director, said. “And it becomes a snowball effect. When someone’s excited, everyone else is excited.”

Starting Price for these West Palm Condos: $5.9 Million

New York’s Related Cos. is the largest holder of Class A office space in downtown West Palm Beach. Now it’s about to test the depths of the city’s luxury condo market.

The developer is launching sales this month at its 108-unit South Flagler House on the downtown waterfront, its first high-end condo in Florida, Related said in a statement.
 

Prices at the two-tower project — designed by Manhattan’s go-to luxury condo architect Robert A.M. Stern — start at $5.9 million and go as high as $72.5 million.

Related paid nearly $195 million in August to acquire the already-planned development from Hines and Frisbie Group. That’s more than four times what the sellers paid for the site.

That’s it for today!

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