Miami's Office Bizarro World

You know all those headlines about record office vacancies, tenants who won’t commit to office leases, and investors who are shying away from office buildings?

There was nothing like that in Miami in this week.

Instead, there was this: Several developers unveiled plans for a combined 1.2 million square feet of new office space in the city.

🏢 848 Brickell: Key International announced it would build a 50-story skyscraper with 750,000 square feet of offices on a site it currently owns in Miami’s financial district.

It hired Skidmore, Owings & Merrill — the architects of Dubai’s Burj Khalifa and New York City’s One World Trade Center— to design a workplace with column-free interiors and floor plates as large as 27,000 square feet. The better to attract legal, tech and finance firms as tenants, the developer said in a statement.

There’s also the requisite fun stuff for the come-back-to-work era: outdoor walking paths, a ‘best-in-class’ gym, and two regulation-sized Padel courts.

🏢 3601 Biscayne (aka “Tower 36”): A proposal to build a 47-story office building with 312,000 square feet was presented for discussion this week at Miami’s Urban Development Review Board.

The project would include a restaurant on the 5th floor, a “sky garden” on the 32nd and a garage with 671 spaces (135 of them for electric vehicles).

Condo developer One Thousand Group is behind the development plan, which would be its first office project, according to Bisnow.

🏢 3601 North Miami Ave: A plan for a 20-story office building with 199,000 square feet was also presented for review to Miami’s development board.

The Design District project is a joint venture between New York-based Tricap, Integra Investments and Lndmrk Development, Bisnow reported.

So here’s the question: Can Miami absorb all the new office space in these projects (among others)?

“We can put them in the aspirational category for now, but I have no doubt that if and when they do deliver, they will be successful,” said Kevin Gonzalez, a senior vice president at the Miami office of brokerage Colliers, who represents tenants and landlords in leasing deals.

“New product is leasing at a much higher velocity than legacy product,” Gonzalez said.

The Miami market, he said, has matured — from a place where Latin American firms might set up a temporary office, to a city that’s drawing in companies seeking premium space for new headquarters.

Besides, for projects unveiled this week there’s a long runway ahead. To get construction financing, developers would have to first find tenant commitments for as much as 40% of their space, Gonzalez said. And then there’s the 36 to 48 months it would take to build each tower.

“The scale of these projects is such that they may not deliver until the end of the decade,” Gonzalez said.

Bahamas After Work? Take the Chopper 

How do you measure the wealth migration into South Florida? You could look at Census numbers — or just ask Kurt Carlson.

Carlson is the chief executive officer of HeliFlite, a New York-based helicopter charter company.  And in the past 12 months, his firm completed four times the number of flight hours within South Florida than it did before 2020. “And we’re looking to double that again this season,” he said in an interview.

By December, HeliFlite will increase its South Florida fleet— by relocating two helicopters from its New York base. And it just secured landing rights in several Bahamas locations, which means flights to there from Florida will begin…. starting now. 

The rides— a private trip on a Sikorsky or Agusta that seat between six to eight passengers — come at a price point fit for a hedge fund manager:

🚁 The 24-minute fight from Miami Beach to Bimini starts at $7,750 for a one-way trip and could go as high as $14,100.

🚁 The 72-minute flight from Palm Beach to Marsh Harbor ranges from $7,400 to $14,500, one-way.

🚁 Clients may buy “HeliCards,“ a prepaid flight debit account, for discounted hourly rates. It costs $193,750 for 25 hours.

The Bahamas is one more offering catering to South Florida’s new population of C-suite executives (who’ve previously used the firm’s choppers for trips to the Hamptons).

Charter flights from West Palm Beach to Miami — where HeliFlite has rights to land on Watson Island — are already common, Carlson said. So are trips to Disney World, the Florida Keys, and visits to golf courses and polo clubs. Some newly re-located execs are using choppers to avoid the newly increased traffic from all that migration, he said.

“They refer to a helicopter as a time machine,” Carlson said. “Because it creates time for their people to fit in a lot more meetings, a lot more work, and a lot more fun than sitting in the back of a limousine or SUV for hours on end getting from one place to another.”

New York’s Naftali Group Unveils 67-Story Condo Tower

For the latest news of “New York-developer-goes-big-on Florida,” we spoke to Miki Naftali, chief executive officer of Naftali Group.

This week, his firm launched sales for — and offered the first details about — its 700-foot condo tower within the Miami Worldcenter district, the 10-block urban re-development project just north of downtown.

“It’s a brand new neighborhood that’s designed with the understanding of the lifestyle that people want to have today,” Naftali said. “You just walk out your front lobby and you walk to retail stores, you walk to restaurants, you walk to coffee shops and you walk to beautiful parks. That’s very new and unique to Miami and to South Florida.”

Here’s the details of the project, called JEM Private Residences:

• 259 condos — ranging from 143-square foot studios to 2,052-square foot four-bedroom units. Plus ten penthouses at the building’s crown.

• Condos will start on the 43rd floor to “maximize breathtaking views.” Rental apartments will be located below that.

• Prices for the smallest units start at about $540,000 and go up to about $7 million for the penthouse on the uppermost floor, Naftali said.

• The project is currently seeking a permit to start the foundation, which it aims to do in April.

• The developer will not be seeking a construction loan until at least the end of 2024. Naftali said the firm ”has a lot of equity to spend” until then.

• Project completion is expected by early 2028, he said.

• The development is Naftali’s first in Florida— and he suspects that those relocating from urban areas like New York might find a Worldcenter address most appealing.
   
  “People want to buy because they have an office now in Florida, or because they’re working from home,” he said. “Whatever the reason is, they want to live in Miami, and they want to keep the lifestyle.”
  

That’s it for today!

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