It came down to a decision on whether to pay potentially expensive relocation costs to a temporary office site or a $3-per-sf premium to extend a lease that is expiring on its class B office space in suburban Coral Gables, FL.
The Miami-Dade County Commission is agreeing to a 15-month lease amendment valued at a total $3.3 million for 9,656 sf in the 40,000-sf Catamal building at at 3001 Ponce de Leon Blvd.
Under terms of the contract, the county will pay about $23 a sf at a monthly rate of about $18,507 or an annual rate of $222,088. In comparison, the county paid roughly $20 a sf, or about $16,093 a month on the original lease negotiated in 1998, which expires June 30.
"The original lease was negotiated in 1998, and since that time the rates in the area have risen greatly," County Manager Steve Shiver says in a commission memorandum. "Due to the short-term extension of this lease, the landlord is requiring a premium rate for the extended period, which is comparable for such short-term agreements."
Information on class B rent is not readily available, but Cushman & Wakefield of Florida Inc. estimates gross asking rents on class A office space in the Coral Gables submarket averages about $31.69 per sf--with a direct vacancy rate of about 9.1%--for the three-month period ended March 31.
"You do pay a premium for a short-term lease, and there are varying degrees of class B space," Doug Campbell, a senior director in the Miami offices of Cushman & Wakefield, tells GlobeSt.com. "It's a little pricey for class B office space, especially for the 3001 building."
The county agency uses the space for its employee training and development in addition to its customer information system.
"It's well-kept class B office space," Wirt T. Maxey, president of Catamal Realty Inc., tells GlobeSt.com. Catamal owns the 35-year-old office building. Waxey did not elaborate on the negotiations with the county.
In justifying the rent increase, the county looked at three other properties in the market: 2800 Ponce de Leon Blvd., which sought $26 a sf for full service on a minimum five-year lease; 3211 Ponce de Leon Blvd., $21.50 a sf net electricity, with no tenant improvement allowances on a short-term lease; and 1320 S. Dixie Hwy., $19.50 a sf full-service on a minimum three-year lease, with substantial build-out expenses not included.
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