Swire sells Brickell City Centre office buildings for $163M
Swire Properties has sold its two office buildings at Brickell City Centre for $163 million.
The Hong Kong-based firm sold both 130,000-square-foot buildings to affiliates of the Santa Monica-based Northwood Investors, according to the South Florida Business Journal, which first reported the deal. The office building at 78 SW Seventh St. sold for approximately $80.3 million; the building at 98 SW Seventh St. sold for $82.7 million, according to The Real Deal. The offices were first listed on the market in January 2020.
Swire declined to comment on the specifics of the deal. A spokesperson for Brickell City Centre said in a statement,“Having averaged close to 100% occupancy for some time now and with a tenant base comprised of some of the corporate world’s most respected companies, the two class-A towers have reached a point of maturity that made these unique assets attractive to numerous investors.” Tenants include the Akerman law firm, WeWork and McKinsey & Company.
The statement continued, “Swire has finalized the sale of both towers and intends to reinvest the capital into our future developments and continue our vision to create a world-class urban destination in Miami and Brickell.”
The company previously announced plans to build two additional towers as condos on an adjacent site. A spokesperson said via a statement that “there is more design work to be completed before more information can be made public.”
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The Class A office market nationwide remains in flux as many companies rely on remote working arrangements during the COVID-19 pandemic.
Still, asking rents in Brickell have rebounded since earlier this year, said Stephen Rutchik, executive managing director for office services at Colliers International, which was not involved in the sale. The asking rent in Brickell was $65.25 per square foot in the second quarter 2020, up from $63.69 per square foot in the first quarter 2020.
“From a leasing velocity perspective, we are seeing Brickell outperforming every market in Dade county. We are seeing significant new-to-market tenants. Companies want to be in Brickell because of its amenities. It’s safe and walkable,” Rutchik said.
While the buildings are nearly fully leased, the few vacancies are a plus, he said. “Having vacancy in a project is advantageous because it gives the opportunity to lease at today’s office rates. The leases signed prior to pandemic are significantly lower than what is being signed today.”
While some developers are betting that the pandemic will drive companies into the suburbs, new-to-market tenants continue to look at Brickell, Rutchik said. “We are finding that tenants are not making long-term decisions to relocate to the suburbs...The view is that the pandemic is a relatively short-term issue.”
This story was originally published July 28, 2020 at 7:00 AM.
