One Biscayne Tower's sale was seen as a turning point in Miami last year. The 50-year-old building is among Downtown's most prestigious offices and offers views of Biscayne Bay, and the $225 million sale in June was taken as a bullish sign for office investors in an uncertain time as companies and employees worked from home during the pandemic.
The property: CP Group, which owns roughly 2 million square feet of office space in downtown Miami, had been tracking the building at 2 Biscayne Blvd. for years because it was one of a few large-scale opportunities downtown to renovate and raise rents.
Buyers emerge: Owner Dow was quietly marketing the 38-story, roughly 690,000-square-foot, Class A tower to a few firms, but CP Group, along with partners Sabal Capital Partners and Rialto Capital Management, prevailed.
More demand: Since closing, more than 50,000 square feet has been leased at One Biscayne Tower with another 40,000 square feet of deals in the pipeline. The new owners are in the process of upgrading floors and modernizing the building. The tower currently features a renovated lobby, a digital directory with a QR code and a fitness center. A CP Group representative declined to disclose what the future amenities will be.
Miami office space features a 10% average vacancy rate, lower than the national average of 12.2%, according to CoStar data. The market's average annual rent is $41.48 per square foot, well above the national average of $34.59 per square foot. In fact, the Miami office market saw the sixth-highest annual rent growth in the nation as of March 28, per CoStar data. One Biscayne was about 65% leased at the time of the sale, according to CoStar data.
What they're saying: "The answer to this question is still evolving as employees begin to return to the office," Brett Reese, senior vice president of CP Group, said about what tenants want in their office spaces. "But one theme we are certain of is the need for quality, amenitized space."
CoStar's Impact Awards highlight the commercial real estate transactions and projects that have transformed their markets over the past year. The winners are chosen by independent panels of industry professionals who work in the markets they judge. A list of judges can be found here and the criteria for selecting winners can be found here.