Ex-Google CEO Eric Schmidt and his New York-based partners are ready to start courting high-profile, deep-pocketed tenants for a planned office project in Miami Beach’s South of Fifth neighborhood.
In a statement, Schmidt’s partners Sumaida + Khurana and Bizzi & Partners said the joint venture will begin leasing at The Fifth Miami Beach, a five-story office building with 3,125 square feet of ground-floor retail on two vacant lots at 944 Fifth Street and 411 Michigan Avenue. It is not yet under construction.
Schmidt and his wife have an 88 percent stake in the entity that owns the properties, while the New York development firms retained 12 percent, according to an ownership disclosure statement filed with the city of Miami Beach last year. The joint venture paid $8.9 million for the lots last year, and the Miami Beach Historic Preservation Board approved The Fifth Miami Beach in June. Schmidt was Google’s CEO from 2001 to 2011, and then served as the company’s executive chairman until 2015.
Construction will commence in the coming months and leasing is being handled by Cushman & Wakefield, the statement said.
Alessandro Pallaoro, Bizzi’s managing director, and Amit Khurana, a Sumaida + Khurana founding partner, declined comment about Schmidt’s ownership stake in the project. In a phone interview, Pallaoro and Khurana said the partnership is initially targeting a select group of prospective tenants with whom the developers and their leasing brokers already have relationships. These include family offices, hedge funds and finance firms relocating and expanding in South Florida, Pallaoro and Khurana said.
“We are doing a VIP soft launch for one month and then go to market,” Khurana said. “We want to give insiders a first look.”
“We are going to be very selective with prospective tenants,” Pallaoro added.
Cushman & Wakefield’s Brian Gale said asking rents are starting at $170 a square foot triple net — a price that would boldly surpass the $100-plus per square foot that a handful of new office towers in Miami’s Brickell neighborhood and downtown West Palm Beach are fetching. The floor plates are 15,000 square feet, and that each floor will accommodate one or two tenants, Gale said.
Pallaoro and Khurana declined to comment about the asking rents. They are relying on the Cushman leasing team to drive asking rents for the building, Khurana said. “Our sense is that there will be strong numbers,” he said. “There are a few projects under construction that have absolutely achieved record-breaking prices on leasing.”
Designed by Spanish architect Alberto Campo Baeza, The Fifth Miami Beach is offering high-quality office amenities that will justify asking rents that have never been achieved in the South Florida market, Pallaoro and Khurana noted.
The building will feature a dumbwaiter that can deliver meals and drinks to every office from the ground-floor restaurant, as well as 10-foot-deep terraces that can serve as outdoor meeting rooms, among other amenities not available in typical boutique office buildings, they said.
In New York, Bizzi & Partners and Sumaida + Khurana partnered in February to buy a development site in Hudson Heights for $12 million, and the joint venture is finalizing development plans. Bizzi, with partners Howard Lorber’s New Valley and Cindat Capital Management, also developed an 88-story condominium at 125 Greenwich Street.
Sumaida + Khurana and LENY are co-developing a 35-story condominium in New York’s Hell’s Kitchen.