BAC Florida Bank, the namesake of the BAC Colonnade, chose to stay over relocating to 1450 Brickell
After fierce competition from other high-end office buildings, BAC Florida Bank has renewed its lease at the stately Colonnade building in Coral Gables, providing a significant boost for the landlord and the overall market.
While BAC Florida Bank has been a tenant in the Colonnade for eight years, has its name on the building and a lease for another two years, the landlord, Deka Immobilien still had to work hard to retain the bank.
“Other buildings were being extremely aggressive,” said Maggie Kurtz, a director at Cushman & Wakefield, which is the leasing agent for the BAC Colonnade and represented Deka. “At one point, they could have gone to another market, because everybody was going after them, but they chose to stay in Coral Gables. We were competing with newer buildings, but the ownership is putting $2 million of improvements on the project.”
Kurtz said Deka, which purchased the BAC Colonnade building two years ago, was putting in substantial renovations, including new bathrooms, elevator paths and cooling systems.” The bank is leasing 40,857 square feet.
“There are 1.2 million square feet of space coming on in Brickell,” she said. “When you’re a landlord in today’s world you really have to take care of the building and upgrade it, to meet the same standards that are sprouting around you.”
The lease follows a series of announced deals at downtown Miami’s two newest office towers, Met 2 Financial Center and 1450 Brickell for a combined total of more than 400,000 square feet.
The bank actually narrowed its final short list to include the Colonnade and 1450 Brickell, according to Jon Bourbeau, executive managing director at Newmark Knight Frank, which represented the bank.
“We went through a traditional process where we looked at a lot of alternatives,” Bourbeau said. “At the end of the day, the ability for us to save money early and keep our presence in the Gables were the driving factors.
The bank saved money by negotiating its lease 23 months before it was scheduled to end. By restructuring its deal early and extending for ten years, the company was able to reset the rent upon execution, Bourbeau said, instead of waiting until it expired.
“The relocation was very attractive,” he said. “But at the end of the day, the landlord was good to work with, they’re going to put money in the building, they agreed to some big building improvements, and I think that, along with the ability to save money today, is what really drove the deal.”
According to CoStar, the Coral Gables submarket has a lower vacancy rate than downtown Miami, largely due to the new space coming on line in Miami. About 17 percent of the Class A space in Coral Gables is vacant, compared to more than 20 percent in downtown Miami and the Brickell corridor.
The BAC Colonnade is now 94 percent leased out of 205,000 total square feet. Its major tenants are Chevron Caribbean, SB Architects and Regus Executive Center.