U.S. law giant opening in Miami, lured downtown to priciest office tower
In the latest sign that downtown Miami’s once-hibernating office market is roaring awake, U.S. legal powerhouse Sidley Austin has signed a milestone lease, among the priciest in Miami, at an unfinished Brickell tower that’s become the financial district’s most sought-after business address — and a striking architectural landmark as well.
Sidley, a Chicago-based giant that boasts 2,000 lawyers worldwide and $3 billion in annual revenue, confirmed Wednesday that it has agreed to a long-term deal for a substantial 60,000 square feet on three floors at 830 Brickell, which is under construction and scheduled for completion by the end of this year. The high-rise is the first new office tower to go up in Miami’s downtown in a decade.
Powered by star architecture and its prime location, the 57-story tower has already lured the likes of Microsoft, private equity firm Thoma Bravo, investment manager CI Financial, Canada’s largest asset management firm, among others, at lease rates that brokers say are shattering records for Miami office space — approaching $150 a square foot.
The surging demand for office space has made Miami an anomaly in the nation amid the COVID-19 pandemic, when in many parts of the country professionals are still working remotely or reporting to work some days.
It will be the first Miami office for Sidley, a new arrival in what has been a wave of Big Law — the annual billion-dollar law firms — establishing a significant local presence as they follow technology and finance clients that are doing the same. Sidley has been recruiting partners from local firms and is also expected to bring lawyers from some of its 20 other offices to Miami.
It expects to have 40 lawyers working in temporary offices in Brickell by September, but the 830 Brickell lease provides space for as many as 100 attorneys and support staff, said Yvette Ostolaza, a Miami native who is chair of Sidley’s management committee.
“It seemed like a natural to expand to South Florida,” Ostolaza, a 1992 University of Miami law graduate, said. “We saw in the pandemic a lot of the talent move to the area along with clients and industries we have long represented, such as private equity and financial services. Now that you can work from anywhere, why not pick Miami, with its friendly business climate and its gorgeous beaches and weather?”
Other big firms that are in the process of opening large practices in Miami include Atlanta-based King & Spalding and Chicago-based Winston and Strawn, both of which are moving into the Southeast Financial Center, a longtime landmark north of the Miami River in downtown Miami. Kirkland & Ellis, the highest grossing law firm in the country, announced last month it’s opening a local office, too.
King & Spalding, which launched in Miami in February, this week announced it will be led by some locally well-known figures, including former U.S. Rep. Kendrick Meek, though he’s not a lawyer, and veteran attorney Thomas Spulak, a University of Miami alum who long worked with U.S. Congressman Claude Pepper and, after the legendary politician’s death, with his foundation. They will be joined by trial lawyer Randy Bassett, who will move from Atlanta to serve as office managing partner.
Though terms of the Sidley deal were not released, the agents who handled it said lease rates at the 830 Brickell building, which topped off last month, have already blown well past the average Miami asking rent for office space and have ranged between $100 and as high as $150 a square foot. Those rates, representing levels usually associated with prestige Manhattan offices and previously unseen in Miami, helped drive up office rents in Brickell by a staggering 42% over last year, according to a new quarterly report from real estate services firm JLL, which represented Sidley in the 830 Brickell deal.
By comparison, average asking office rents across Miami are just over $50 a square foot — a figure that still represents a local record and a nearly 11 percent increase over the past 12 months, according to JLL.
Agents say 830 Brickell’s record-busting rents reflect heated competition for a limited supply of available Class A office space in the financial district, which has a low vacancy rate of just under 9%, as finance, tech and now big law firms stake out large Miami footprints.
Prospective tenants, as a result, have been competing vigorously for space at the tower, which is more than two-thirds leased, JLL Managing Director Barbara Liberatore Black said.
“There has been a certain appeal about this particular development that I have never seen before in a building in Miami,” she said. “There are tenants fighting over certain spaces in the building.”
The size of the space Sidley has secured is on the high end of Miami office leases and confirmation that the burgeoning nexus of finance, tech and law in the city is firmly taking root, Liberatore Black said.
“To get a Sidley come to Miami and take 60,000 square feet right off the bat makes a great statement for Miami and how it’s matured,” she said. “It’s not just about the climate and it’s not just about the tax benefits any more.”
At least some of the appeal of 830 Brickell for high-flying corporate tenants, Liberatore Black said, has to do with the tower’s sleekly futuristic, high-tech design by Chicago’s Adrian Smith + Gordon Gill Architecture, and lavish “lifestyle” amenities more typical in Miami of luxe condominiums than office towers.
Smith designed the Burj Khalifa tower in Dubai, the world’s tallest building, just before breaking away with Gill from architectural colossus Skidmore Owings and Merrill. Smith is also primary designer for a tower in Jeddah, Saudi Arabia, that’s meant to surpass Burj Khalifa to become the globe’s first building to reach a full kilometer in height, though construction has been stalled since 2018.
OKO Group and Cain International, developers of 830 Brickell, boast that the building’s “museum-quality” architecture, amenities and what they describe as state-of-the-art digital infrastructure will set a new bar for office towers in Miami. Plans include a rooftop restaurant by a Michelin-rated chef and a two-story bar on the 56th and 57th floors, a 30th-story sky lobby with a health and wellness center and conference center, plus cafes and retail.
The restaurant would return high-rise dining to the downtown office and business scene for the first time since the once-popular City Club atop the Southeast tower closed sometime in the last decade.
The deluxe amenities are one reason firms signing leases at 830 Brickell are willing to go high, said Ryan Holtzman, managing director at Cushman & Wakefield, which is handling leasing at the building. The talent the firms hope to bring to Miami are accustomed to that level of amenity and expect it, though it’s a new idea to the city, he said.
Another reason Sidley picked 830 Brickell, he and Ostolaza said, is that some fellow tenants are already the firm’s clients. And Sidley lawyers and potential recruits told the firm they wanted to work in Brickell because of its transit connections, central location, nearby housing and food and entertainment options, Ostolaza said.
“These firms never thought about coming to Miami before,” Holztman said. “But Miami has grown into a global hub for talent, for lifestyle and innovation. Now that these big tech and financial services firms are here, these firms want to be close to their clients. That’s why they’re willing to pay the freight.”
But it’s a near-certainty that the new skyscraper, Miami’s second-tallest office tower, won’t be Brickell’s last showstopper.
Billionaire Ken Griffin and his separate Citadel hedge fund and securities firms have announced they’re moving to Miami from Chicago and planning to build their own bespoke office tower, to be developed by Sterling Bay. A source close to Citadel confirmed that the firm is the shadow buyer behind the record-setting purchase of a vacant 2.5-acre lot at 1201 Brickell Bay Drive for $363 million from veteran Miami developer Tibor Hollo’s Florida East Coast Realty.
The source also confirmed that Citadel is also the buyer of an existing tower two blocks away at 1221 Brickell Ave., in its late 1980s heyday Miami’s most in-demand office address. The tower, which Citadel bought for $286.5 million, has recently undergone a multimillion-dollar renovation. Citadel has not disclosed its plans for 1221 Brickell. The firm has already moved some employees into temporary offices at the Southeast tower.
Meanwhile, Swire Properties and New York developer Stephen Ross, owner of the Miami Dolphins and Hard Rock Stadium, have said they’re teaming to build the One Brickell City Centre office tower at 700 Brickell Ave. The planned tower, designed by Miami’s Arquitectonica, would be the second phase of Swire’s multiblock Brickell City Centre retail, office, hotel and residential complex a block west. At a planned 1,000 feet in height, One Brickell would be one of the tallest skyscrapers in Florida.
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As many corporate employees continue working from home, companies nationwide remain uncertain about how much office space they really need.
But in Miami the surging demand has met a limited available supply of top-rated commercial buildings, sparking plans for new office development not just in Brickell but in Wynwood, Miami Beach and now the Miami Design District.
On the Beach, officials are moving ahead with plans to convert parking lots next to Lincoln Road Mall into boutique office buildings, while Miami’s Related Group, now helmed by Jon Paul Perez, has secured city approval for a new luxury office building on Terminal Island off the MacArthur Causeway.
In the Design District, Dacra’s Craig Robins and his partners, L Catterton Real Estate and Brookfield Properties, unveiled plans in March for a 15-story office building called The Ursa that would also tap into the new demand for lavish lifestyle elements in an office setting. The Arquitectonica design features extensive amenities, including abundant outdoor space, private balconies on every floor, a rooftop garden and museum-quality art and furnishings by noted artist Daniel Arsham, a Miami native whose career Robins helped launch.
On Tuesday, Helm Equities and a partner, the Gindi Family’s ASG Equities, announced a blueprint for a $300 million, five-story office and retail development spanning a full block on the Design District’s eastern edge. It, too, will be loaded with lifestyle amenities, including 80,000 square feet of outdoor space distributed across all five floors, private office terraces and the now-obligatory rooftop event space.
The office trend is only going to grow, Cushman’s Holtzman said. He expects 830 Brickell to be fully leased well before it’s finished, something he said he’s never seen in an 18-year career. The arrival of Citadel and now Sidley signals to the world that the Miami boom is real and here to stay, he said.
“Citadel is planting their flag here. That’s a huge thing for Miami. So is Sidley. They will be a magnet for others like them,” Holtzman said. “They’re coming here in droves and they’re much bigger in size than we’re used to. The jobs are coming here and now people want to move here because of the jobs. I don’t see it slowing down at all.”
This story was originally published July 20, 2022 at 4:59 PM.