The Real Deal Miami

‘Feeder’ buildings help fill 1450 Brickell, Met 2 in downtown Miami

By Alexander Britell | June 08, 2010 07:00PM

There was doubt about the ability of Brickell’s two newly constructed Class A office towers to find tenants in a sagging commercial market.

But in the last year, each tower has begun to fill up space with the help of large law firm tenants — Bilzin Sumberg and Greenberg Traurig — moving from so-called “feeder buildings” in downtown Miami.

Bilzin Sumberg is 1450 Brickell’s headline tenant, having signed a lease for 80,000 square feet, and Met 2 Financial Center has leased 128,450 square feet to Greenberg Traurig.

“What traditionally happens is tenants who are looking to upgrade or need more space, move into the new buildings,” said Jack Lowell, vice president at Flagler Real Estate Services, which is representing MDM development in leasing Met 2. “This frees up space in the old buildings, and that is exactly what is happening. The older buildings that are giving up tenants we call ‘feeder buildings.'”

Bilzin left Wachovita Tower in downtown Miami, where it had been located for 22 years, and Greenberg Traurig left its former space at 1221 Brickell Avenue.

HIG Capital relocated to 1450 Brickell from its former space at 1001 Brickell Bay Drive, where it had been for 10 years, leasing 38,661 square feet.

 
     

In total, Met 2 has signed three tenants, including the two-floor lease of 50,389 square feet to accounting firm Deloitte, and its only other signed tenant is Right Space Management, an executive suite company.

1450 Brickell has signed leases with nine tenants, one of whom is undisclosed, and Blanca Realty is also leasing a small amount of space in the building. After its deal with Bilzin, 1450’s biggest leases have been its aforementioned deal with HIG Capital, for 38,661 square feet, and with the unnamed tenant, for an additional 36,559 square feet. The remaining leases are all for less than 8,000 square feet.

Lowell said the construction stop on competing building Brickell Financial Center was also contributing to the buildings’ relative success.

“The good news in our market is that Brickell Financial Center is on hold,” said Lowell of Flagler. “So you have two new buildings being produced in a market where, like most markets in the country, our vacancy rate has gone over 20 percent.”

The nine deals signed at 1450 Brickell mean the building has now leased approximately 34 percent of its 582,817-square-foot space. Its next-largest tenant is HIG Capital, which has leased 38,661 square feet.

Meanwhile, Met 2 has leased 27 percent of its 752,488-square-foot space.

“Because of the infrastructure investments and the quality of the ownership, we don’t have to be the cheapest or the same price as other, second-generation buildings,” said Tere Blanca, founder of Blanca Realty, which is handling leasing for 1450 Brickell. “And any of those tenants are willing to move.”

Blanca said an as-yet-undisclosed tenant was also relocating from office space at the Wachovia Tower, for approximately 36,000 square feet.

“The leases we have pending are exciting,” she said. “If everything we have in the pipeline continues as it’s supposed to we should be around 50 percent or better by the end of the summer.”

The two buildings have pursued different leasing strategies, with developer Rilea Group’s 1450 going after a number of smaller-scale tenants. With that said, Rilea has still managed to snag large-space deals like its lease with HIG Capital.

Met 2 has only targeted tenants for full-floor leases and above, Howell said.