This downtown Miami office building spent $4M on renovations. But was it worth it?
An office building in downtown Miami completed a $4 million, year-long renovation in October 2019.
Now, its property owner is reaping the reward.
MetLife, the New York-based life insurance company, saw occupancy rates and leases increase at the Wells Fargo Center at 333 SE Second Ave. after it upgraded a 7,500-square-foot space on the ground floor.
The Edgewater-based interior design firm Insight Design was hired to convert a shell space, once planned to house a Wells Fargo bank branch, into a cafe and conference rooms exclusive to all of the building’s office tenants. It is the first time all office tenants have access to an amenity space in the building.
Three tenants signed a total of 50,000 square feet in the last two weeks, said Cushman & Wakefield Vice Chairman Brian Gale. Cushman & Wakefield manages the tower and oversees office leasing on behalf of MetLife.
“The new tenants loved the amenity space,” Gale said. “It’s the most leasing that we’ve done in 10 years in a four-month period.”
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Two tenants are relocating from Brickell, one from 111 Brickell and another from 1450 Brickell, and another is a new-to-market tenant from Brazil.
The tower is 90% leased, Gale said: “It’s the highest occupancy rate the building has ever had since it opened in 2010.”
The Wells Fargo Center also saw an approximate 10% increase in rent in the last 12 months, from about $45 per square foot to $50 per square foot, Gale said.
The average direct asking rate for office space in downtown is $39.16 per square foot, according to the Colliers 2019 fourth quarter Miami-Dade County office market report. The average lease rate for Class A office space is $45.40 per square foot and $31.05 per square foot for Class B office space in downtown Miami.
“There’s not a definitive measuring stick [for the success of the renovations] but based on the rent growth and 50,000 square feet of leases,” Gale said, “ the amenity lounge is proving itself worthy.”
The Intermezzo, the cafe, primarily services soft drinks, coffee and sandwiches but it expects to add a wine and beer menu once its liquor license is approved.
The upgrades are meant to distinguish the office tower from an increasingly competitive office market, Gale sale. According to the JLL third quarter 2019 Office Insight report, Miami-Dade County had about 1.8 million square feet of office space in the pipeline in 2019, the highest amount of square footage the county has had under construction since 2009.
“There is competition coming. Those buildings coming are going to have amenity centers. This is going to set the building apart,” Gale said.
Other office towers in neighboring Brickell either completed renovations of their amenity or lobby space, or will soon commence them, including One Biscayne Tower, Citigroup Center and 701 Brickell.
“You are seeing tenants going from Class B to Class A office buildings,” Gale said. “Existing buildings are renovating their amenity space because there is a flight to quality.”
This story was originally published February 20, 2020 at 7:00 AM.
