The bleak outlook for Miami’s commercial real estate market is not confined to the downtown core. Even in the formerly robust Airport West submarket, marquee projects like One Park Doral are flagging.
One Park Doral, which opened October 2009, is Miami’s newest Class A office building. The project is the first phase of Park Square at Doral, a 51-acre mixed-use development with office, retail, hotel and multi-family residential properties. As 2010 progresses, its only tenants are its developer, Shoma Group along with Alcora Group and Visit Us, which signed a lease earlier this month.
Blanca Commercial Real Estate took on the task of filling the building in a down market. It’s one that offers landlords far fewer prospects, as businesses fail or stay put in a weak economy, providing prospective tenants with ample negotiating power. Still, Blanca believes One Park Doral’s strategic location near the airport, Class A facilities, amenities, and prime position in a suburban mixed-use project will woo commercial tenants.
“There is no new supply of office space in Coral Gables, which represents an opportunity for both Brickell and Doral to attract tenants,” said Tere Blanca, a principal at Blanca Commercial Real Estate. “Airport West has historically been one of the best performing markets in Miami-Dade from a net absorption standpoint. This market should perform well in 2010.”
Jose Juncadella, principal of Miami-based Fairchild Partners, has been working in the Doral part of the Airport West market for 28 years.
He’s witnessed the growth of Doral as one of the most successful industrial markets in the nation.
But Doral has not fared well in recent months. Last October, BankUnited filed a $10 million foreclosure suit against commercial condominiums inside the Point at Doral, a 31-unit condo with no recorded sales. Boston Scientific announced its planned departure from its 14-acre Doral office space in November. Also, Executive National Bank closed its doors at the end of 2009, citing declining balances from real estate industry clients. All this is in addition to recent multimillion-dollar multi-family property foreclosures.
“Vacancies are running over 15 percent in Doral,” Juncadella said. “Long-term, Doral will perform well because there are major distributors and office users in the Airport West market.”
Jay Caplin, managing principal at Steelbridge Capital in Miami, said One Park Doral’s failure to draw more tenants in the past six months is a reflection on the market, not the building. He points to similar microtrends in Coral Gables, Downtown Miami and other pockets of Miami-Dade. One Park Doral’s near-term fate may rely more on job growth than Blanca’s prowess.
“Clearly, the immediate answer is growing employment. That will lift all boats,” Caplin said. “Tere Blanca has been working hard to lease that project for about six months. It’s going to take some time for those efforts to materialize. She’ll have to chip away at it over time, like most other brokers in most other areas.”