Business Monday

A new design for South Florida DCOTA

John Garvalia, leasing director with Cohen Brothers at DCOTA, is shown at the center.
John Garvalia, leasing director with Cohen Brothers at DCOTA, is shown at the center. MIAMI HERALD STAFF

Take a walk through the Design Center of the Americas (DCOTA) in Dania Beach and it quickly becomes apparent that the complex has evolved from the bustling design hub it was pre-recession into a mixed-use complex that aims to house nearly as much office space as high-end furnishings and accessories showrooms.

With the announcement earlier this month that Chiquita Brands International is moving its banana division into 14,500 square feet in the complex, DCOTA has moved closer to an office occupancy that can sustain the amenities and maintenance costs at the sprawling center.

The center, built in 1985 and made up of three large buildings along I-95, suffered when Florida’s real estate market collapsed. Some design showrooms closed shop, others pared back, and some even moved into less expensive warehouse space nearby in an area of Hollywood that has become known as another design cluster.

While there still remains substantial vacancy, owner Charles Cohen said that eventually the 775,000-square-foot complex will house about 300,000 square feet of offices in its A and B buildings and the rest will be showrooms. New York-based Cohen Brothers Realty Corp. continues to lease the showroom space; however, the owner has hired commercial broker Cushman & Wakefield to aggressively attract office users with advertised rents ranging from $28 to $30 a square foot (compared with $36 to $50 a square foot for advertised rents for showroom space). DCOTA’s largest office tenant is Chewy.com, an online pet supply company that signed a five-year lease for 48,000 square feet in August 2013.

After buying the property a decade ago, Cohen, who owns design centers in Manhattan, West Hollywood and Houston, said he realized that the South Florida destination needed to shift its focus. “It was overdeveloped for the design industry by about 200,000 to 300,000 square feet. The area just doesn’t have enough high-end showrooms to fill the capacity. We realized we needed to position it marketwise to the office user who wants the amenities of a country club type environment.”

Cohen has invested more than $30 million upgrading the center with better landscaping, lighting and improvements to common areas. The atrium in Building C is under renovation at this time. A small on-site restaurant is open on the lower level, parking is plentiful, and Cohen said he plans to add a fitness center.

Some of the office users at DCOTA now include Empire Estate Holdings, an Internet marketing firm, Avis Budget Group, the law firm of Behar Gutt & Glazer, and Magic Leap, an augmented reality company with 11,500 square feet that recently announced that it is consolidating the majority of its Florida workforce into a former Motorola facility in Plantation. (The company declined to comment on what would become of its DCOTA space, but Magic Leap does have an eight-year lease that runs through 2021.)

Don Ginsburg, owner of Realty Masters Advisors in Fort Lauderdale, said DCOTA is achieving respectable office rents on par with the downtown Fort Lauderdale market. He attributes its central Broward location and ample parking to its appeal.

Cohen said newly signed leases for showroom and office space show DCOTA is moving in the right direction. Still, empty showrooms are visible throughout the complex and about 200,000 square feet of space remains vacant. “We are going to trade shows, meeting with prospects. ... We are the largest owner of design showrooms and we have got the right people who know the right resources,” Cohen said.

Dedon, manufacturer of woven outdoor furniture, will become one of the new showroom tenants. The company, new to South Florida, has signed a lease for 5,300 square feet in DCOTA and will open a showroom in Building C in November. Drew Duncan, Dedon’s Southeast regional sales manager, said his company had considered going into the Miami Design and Fashion District but chose DCOTA because rents were about a third of the cost. “We’re a luxury brand so it was important we go into a luxury building,” Duncan said. Sharing space with office tenants wasn’t a concern: “It’s better to have a full building and see people in the building,” Duncan said. “Plus, the more tenants, the more it helps to keep the building maintained.”

Wilton Manors-based designer Louis Shuster, president of Shuster Design Associates, said he no longer visits DCOTA regularly as he did in the 1990s when it was in its heyday and had a certain cachet. Shuster said the interior decorating business has changed with more online shopping, and buying direct from out of state vendors, making a trip to DCOTA less necessary. “It’s just not as conducive for designers to shop there. Of course, there are favorites we love and are loyal to, but many of them have gotten smart and said, ‘We will come to you.’”

Jeff Howard, president of Howard Design Group in Miami, agreed with Shuster that the South Florida design industry has changed. Where DCOTA used to be one-stop shopping for designers, the industry has become spread out with showrooms scattered in Hollywood, Miami and its Wynwood neighborhood, he noted. “To do what I used to do in three hours in DCOTA, I now have to go three places. If I get a big job, it’s easier to go to the Los Angeles Design Center, where there are more showrooms and I can see them all in one day.”

Cohen said the commercial and residential interior design business always will be a tactile experience where decorators and clients come to a showroom to touch the product. With this in mind, his staff is trying to attract design tenants from his design centers in other cities. In the meantime, Cohen will continue to pursue office leases to fill vacancies: “I think it’s validating for us to be able to conclude lease transactions with Class A office tenants. For us, business is good and getting better.”

DCOTA

Design Center of the Americas (DCOTA)

Year built: 1985

Original developer: Marvin Danto

Sold to: Charles Cohen (Cohen Brothers realty) in 2005; modified its $185 million mortgage in 2012

Location: 1855 Griffin Road, Dania Beach, I-95 and Griffin Road, close proximity to Fort Lauderdale-Hollywood International Airport

Size: 775,000 square feet on four floors

Renovated in phases: Buildings A in 2010, Building B in 2012, building C in 2015

Designer showrooms: 60

Large design tenants: Judith Norman Collection, Kravet, Donghia, Sutherland

Large office tenants: Magic Leap, Chewy.com, Mako Surgical Corp., Avis Budget Group, Chiquita Brands International (new)

Current occupancy: About 74 percent

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