MIAMI – In a sign that demand for South Florida’s trophy real estate assets persists despite economic volatility, I&G Miami, Inc. has purchased downtown Miami’s landmark Miami Tower office building from owner Blue Capital US East Coast Properties, L.P. for $105.5 million. Designed by renowned architect I.M. Pei and constructed in 1987, the 600,000 square foot, Class A Miami Tower has grown to become one of the world’s most recognized office buildings due to its changing palette of exterior lighting schemes. The transaction, which closed on December 17, 2010, ranks as the highest-valued real estate trade in the Miami market this year.
Details of the sale were made public by Manny de Zarraga and Hermen Rodriguez of HFF (Holliday Fenoglio Fowler, L.P.) who represented seller Blue Capital US East Coast Properties, L.P. in the transaction. Attorney Carey Stiss of Bilzin Sumberg Baena Price & Axelrod LLP served as legal counsel for the seller, which is affiliated with Atlanta, Georgia-based Wealth Capital Investments, Inc.
Miami Tower lit up in Jamaican Colors for Jamaican Independence
Several factors contributed to steady interest among prospective buyers since Miami Tower was placed on the market earlier this year, according to Manny de Zarraga of HFF. “Once we zeroed in on a buyer for Miami Tower, both parties involved recognized that we were dealing with a trophy asset sporting a strong occupancy rate, stable balance sheet, and a grade-A tenant roster. The Tower’s iconic status on the downtown Miami skyline was an added plus. In the end, this is a classic example of a quality asset attracting a quality institutional owner. This trade is a big boost for the Miami real estate market and we expect a spark of momentum will stem from this sale heading into 2011.”
Attorney Carey Stiss of Bilzin Sumberg pointed out that among the challenges presented by this transaction, Miami Tower is situated atop a City of Miami-owned parking garage, meaning that the City’s consent was required to proceed with the closing. “In an economic climate where capital can be difficult to secure and transactions tend to encounter steep obstacles en route to closing, the sale and purchase of Miami Tower proves that institutional owners looking to add top-tier assets to their portfolios can still access financing and get deals done,” said Mr. Stiss. “The fact that this complex transaction closed on a relatively short timeline is an encouraging sign for would-be owners in the market to acquire premium commercial assets in South Florida.”
Among the factors that drew prospective buyers were Miami Tower’s track record of steady leasing activity among high-quality tenants and its current occupancy rate of 80%, which continues to outpace the market average. Building tenants include law firm Carlton Fields, UBS Financial Services, law firm Boies Schiller & Flexner, Vector Group, and law firm Buchanan Ingersoll & Rooney. In addition, the tower houses more than 20,000 square feet of street-level retail space that is home to an Au Bon Pain café, U.S. Century Bank, and an on-site dry cleaning service.
Beyond strong occupancy, Miami Tower’s previous ownership team earned accolades for its sound operations and asset management. Recent initiatives included a $2 million capital improvement project and a robust energy efficiency and sustainability program involving environmentally-sound upgrades and the launch of an on-site recycling program. These initiatives were key factors in the building’s receipt of “Office Building of the Year” honors from the Building Owners and Managers Association’s (BOMA) in 2007, 2008, and 2009.
Features setting Miami Tower apart in the competitive downtown Miami office market include convenient access to I-95, an on-site MetroMover station with connections to MetroRail and Tri-Rail, a state-of-the-art health club, a sit-down restaurant and adjacent indoor/outdoor event space that can accommodate up to 1,500 guests, and an auditorium with seating for 150 people.