Hines to build 45-story office tower at Miami Worldcenter

It will be the first large Class A office tower to be built in the central business district since 2010, developer says

May.May 22, 2017 01:45 PM

Rendering of 110 10th Street. Inset: Michael Harrison, Hines senior managing director

Miami Worldcenter will now include a 45-story office tower.

Houston, Texas-based Hines plans to build 110 Tenth Street, a 600,000-square-foot office tower between Northeast First and Second avenues and between Northeast Ninth and Tenth streets in the Greater Downtown Miami area, the company announced on Monday.

The building will be the first new Class A office building of that size to be built in the central business district since 2010, according to the developers.

Miami Worldcenter Associates, led by Nitin Motwani and Art Falcone, is developing the 27-acre, mixed-use project. Construction of the first phase, which includes Paramount Miami Worldcenter, a 360,000-square-foot high-street retail component and a Class A rental building, is underway. The $1.2 billion project will also have a 1,700-room Marriott Marquis Miami Worldcenter Hotel & Expo, to be built in two phases.

New Haven, Connecticut-based Pickard Chilton Associates is designing the office tower, which will include three indoor/outdoor terraces and high-street retail space. The developer plans to break ground on the building during the second quarter of next year and deliver it between the end of 2020 or the beginning of 2021.

Michael Harrison, senior managing director of Hines, said the project will be geared toward a wide range of tenants. Harrison cited the project’s proximity to Brightline’s new MiamiCentral station, as well as to Biscayne Boulevard and major highways. When it opens this summer, MiamiCentral will offer high-speed train service to Fort Lauderdale, West Palm Beach and eventually Orlando. It will also add new office buildings and retail space to the area.

Harrison told The Real Deal that Hines has not yet closed on the land purchase, and declined to provide a sale price.

“Hines has been looking for the right opportunity to develop a new office building in downtown for over a year,”  Harrison said. “In talking with users, our customers, the tenants, as well as a lot of the key brokers that handle the large office tenants in the city of Miami, what we really heard loud and clear [is] that with all the development downtown, the biggest issue [is] traffic and how long it was taking their employees to get to work.”

Class A office rents, which have been rising in the central business district for the past three years as vacancy rates fall, are in the high $40s to $50s per square foot range, brokers have said. Asking rents declined slightly in the first quarter of this year from the fourth quarter of last year as suburban markets like Coral Gables saw increased activity, according to a report from Colliers International South Florida.

“You’re going to see a sort of Brickell City Centre-effect on the downtown side of the bridge,” said Matthew Goodman, managing director of JLL’s Miami office. In the upper halves of Class A buildings in downtown Miami, asking rents are all pushing more than $50 per square foot, he said.

Rents have been rising in part due to the size and volume of Class A office building sales over the past couple of years, Goodman said. “You’ve had a lot of buildings sell and trade at very high numbers, and that’s always going to put pressure on rates to increase,” he added.

In downtown Miami, Hines developed the Southeast Financial Center, once the tallest building in Miami at 55 stories. Spanish billionaire Amancio Ortega recently purchased the 1.3-million-square-foot office tower for roughly $500 million.

“It’s pretty clear that there can’t be more growth south,” Harrison said. “What’s effectively happening in downtown Miami is it’s being squeezed like a tube of toothpaste. Downtown is going to have to grow north. That’s really what led us to focus on Miami Worldcenter.”

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