Newgard Development Group and Midgard Management Company are raising commissions for One Flagler, a redeveloped office building in downtown Miami.
The joint venture partnership increased commissions from 5 percent to 7 percent for the rest of February and all of March. One Flagler, at 14 Northeast First Avenue, is 80 percent sold, up from 70 percent in August and 50 percent in February 2015.
Available space includes full-floor office condos. About 28,000 square feet of Class A office space remains with prices ranging from the $300,000s to $4 million, according to a press release. Per square foot, that breaks down to about $360 excluding the penthouse.
Fabio Faerman of Fortune International Realty is the exclusive sales and marketing broker on the 15-story office building. Faerman said the 6,300-square-foot penthouse, which is on the market for $3.7 million, includes signage. He expects to sell out in the next two to three months.
Faerman told The Real Deal that buyers at One Flagler are mostly foreign, with a majority of buyers from Argentina and Venezuela. About 13 percent are domestic. “The developer wants to release the last ones and end the condo conversion,” he said.
One Flagler has a total of 143,000 square feet and was originally designed by architect Morris Lapidus in 1952. Newgard and Midgard entered into the venture to convert the building into office condos in late 2014. The developer put $10 million in upgrades into the building, starting with the top-floor office units and working down to the lobby. Renovations include upgrades to the lobby, restrooms, elevators, HVAC and electrical systems, and the building is now certified LEED Silver.
Juan Pedro San Martin, vice president of development for Newgard, said in a press release that the condos allow investors to receive immediate income from a pre-leased space. “If a tenant has not been secured prior to a purchase, the development team will pay the lease for up to 24 months or until the tenant is secured, thus ensuring the investor a return,” he said.
“We cannot build out fast enough,” Harvey Hernandez of Newgard told TRD. Rents average about 30 per square foot and tenants include attorneys, marketing firms, real estate firms, technology companies and more. Hernandez told TRD the 2 percent commission bump is an incentive for brokers to get to 100 percent sold.
The building is in the heart of the Flagler Street district where investors have been buying up older properties at high premiums. The city of Miami, Miami-Dade County, the Miami Downtown Development Authority and property owners are funding a $13 million renovation and beautification project for the half-mile stretch between the county courthouse and Biscayne Boulevard. The project, geared to modernize downtown Miami and make it more pedestrian friendly, includes new bike racks, enhanced crosswalks, new street lighting, upgraded sidewalks and oak trees.
Faerman said that the beautification project and new retail, including Whole Foods, contributes to the area’s appeal. “Absorption is very good, vacancy is going down,” he said. “I think 2016 will be a very good year for downtown Miami.”