🏈 The Office Quarterback

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Happy Friday Highest & Best! I’m starting today with a note of thanks: we have crossed the 10,000 subscriber mark 🎉 Thank you to all the readers who have joined, clicked, and opined so far. Here’s to the next milestone. 🥂

Now here’s the rundown of the South Florida real estate week:

🏈 Miami offices get Tom Brady.. and a new price record.

🌴 Huge plans for Miami’s Watson Island (if voters approve)

😲 Underwater foreclosure — like, literally UNDER. WATER

🔄 From Salvation Army..to a Tesla fix-it shop?

Let’s get to it!

Tom Brady, Lymph Boots, and a Record Miami Office Lease

Here’s a post about retired NFL quarterback Tom Brady AND setting new records. It’s not about football, though. Both things reflect news this week from Miami’s office market:

 🌴 Brady’s family investment firm, TEB Capital Management, signed a lease for 8,415 square feet of office space at an under-construction building on Miami’s Bay Harbor Islands. The five-story office building — called The Well, for its health-themed offerings of vitamin B12 drips and full body acupuncture — is expected to be complete by summer 2025, Bloomberg reported.

The glass-sheathed project at 1177 Kane Concourse, in one of Miami’s more exclusive neighborhoods, will include nearly 96,000 square feet of offices, 66 condo units and a spa where annual membership costs about $5,000. Office tenants like Brady get access to a host of wellness perks including: weekly juice programs🧃, fitness classes 🏋️‍♀️ , and items like infrared blankets and lymph boots, the developer, Terra, said on the property website.

🫰But it doesn’t come cheap. Asking rent for the The Well’s office space is $120 per square foot — nearly double the $65.47 average asking rents for prime Miami office space.

The Well office project — seeking to benefit from Florida’s in-migration of wealth and executives’ desire for boutique offices near their ritzy homes — has tenant commitments for 35% of its space, according to its leasing broker.

 Dwight Capital, a commercial real estate lender that relocated from Manhattan to Miami earlier this year, is the other planned occupant of The Well building. Dwight’s future headquarters will take up the entire fifth floor, Bloomberg reported.

💰 AND A RECORD: Meanwhile, 830 Brickell — Miami’s original ‘It” new office building— announced that a Brazilian bank leased its last bit of available space at a price that sets a new high watermark for the city and state.

Banco Master signed a lease for 26,000 square feet at the not-yet-complete building in Miami’s financial district, according to Bloomberg. The bank is paying about $190 per square foot, setting a leasing record for Florida and putting it in league with some of Manhattan’s most prime office buildings.

Or maybe beyond? In Manhattan, average asking rents for Class A office space on Fifth and Madison Avenues was $113.51 per square foot in the second quarter, according to brokerage Cushman & Wakefield.

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⏪ Catch up on recent Highest & Best issues:

• Florida’s Cold Feet Wave, July 26, 2024

• Tale of Two Condos, July 19, 2024

• Flock of Floridians, July 12, 2024

Building Up Miami’s Watson Island — with Voters’ OK

Watson Island, a diamond shaped land mass that connects downtown Miami to Miami Beach with an elevated roadway, could soon become one of the city’s biggest redevelopment sites.

If voters approve in November.

Two major development plans would bring hundreds of condos, two hotels, office space, retailers, restaurants, a city park and an enhanced waterfront promenade to the 86-acre city-owned island in the middle of Biscayne Bay.

But first, developers need public permission to purchase a bit of city-owned land and extend a lease for the rest. Here’s what Miami voters are being asked to consider on November 5:

1) A joint venture called Ecoresiliency Miami LLC is seeking to pay $135 million for 5.4 acres on the island’s north side, upon which it would erect two condo buildings with a combined 600 units. The partnership — comprised of ESJ Capital, the owner of tropical theme park Jungle Island, and Terra (developer of “The Well” office above ⬆) — would also build a 13-acre public park at an estimated cost of $38 million.

2) The island’s south side has even grander plans — courtesy of a group that includes Merrimac Ventures (developer of the $6 billion Miami Worldcenter) and BH3 Management.

The partnership took over a 75-year lease for 10.8 acres on the island in 2023, after a previous redevelopment plan, two decades in the making by another firm, failed to materialize. Merrimac and BH3 are now seeking to purchase 3.2 acres of the site they now lease at 888 Macarthur Causeway, upon which they plan a hotel with condos on top, Nitin Motwani, managing partner of Merrimac, said in an interview.

They’re also seeking to extend their lease on the remaining acreage to 99 years, build another hotel 🏨 , and get permission to add some office space — a use that was not considered when the city first floated a redevelopment plan for Watson Island twenty years ago.

“If you want the retail to really thrive it can’t be solely dependent on weekend traffic,” Greg Freedman, co-CEO of BH3 Management, said in an interview. “You need weekday traffic and the best weekday traffic is office.”

Should voters approve their sale and lease extension, Merrimac and BH3 will contribute $9 million for affordable housing elsewhere in Miami and create a 2.2-acre public promenade along Watson Island’s waterfront, as well as a maritime museum. ⚓

“The city wants to see this happen, the residents deserve for this to happen — to improve a part of the city that has been vacant for so long,” Motwani said.

When Your Loan— and Land — is Under Water

Talk about a project that’s under water.

A 57-acre parcel that’s submerged under a lake near Miami, is facing foreclosure after the developer— who purchased it with plans to build apartments there — failed to do so.

The owner of the site, underneath Silver Blue Lake, has defaulted on a $1.2 million mortgage that came due in 2019, according to a lawsuit filed by the lender in court last week (as reported by property intel site Vizzda).

The lender, listed in court documents as Lake Sana Acquisition Trust LLC, is seeking to force the sale of the underwater property in order to satisfy the debt.

The developer purchased the site, off Northwest 17th Avenue, in 2018 for $750,000, with plans to fill in a portion of the man-made lake, and build a rental community on top of it. The plans, initially for 249 apartments then scaled back to 100, faced pushback from both public officials and neighbors, who feared traffic and the potential loss of their waterfront views.

The site remains undeveloped and under water 🌊

NYC Investor Flips Salvation Army Store into EV Fix-It Hub

Florida is second in the country in the number of registered electric vehicles. With so many EVs zipping around the Sunshine State, they’re bound to need some body work.

Which could explain why a New York City developer is poised to buy the site of a Salvation Army thrift store in West Palm Beach with plans to transform it into an EV collision repair shop.

New York-based O’Connor Capital Holdings is in contract to buy a shopping center at 655 N. Military Trail from the non-profit Salvation Army, according to the South Florida Business Journal.

O’Connor seeks to convert the 39,688-square foot retail plaza into an electric vehicle repair center that could service up to 80 vehicles per week. Palm Beach County’s zoning commission approved the project this week.

O’Connor’s application doesn’t specify the company that would operate the EV repair facility. But the Tesla Model 3 is the most driven electric vehicle in the West Palm Beach area, where EV drivers average 12,389 miles annually, according to a study by iseecars.com.

Tesla, the largest EV retailer in the United States, has only one collision center in South Florida…. an hour south in Fort Lauderdale.

 That’s it for today!

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