Why Now Was a Good Time to Sell Miami Tower

The sale price on the 631,672-square-foot office asset: $220 million.

MIAMI—Miami Tower, a 47-story class A tower in Downtown Miami, has traded hands. The sale price on the 631,672-square-foot office asset: $220 million. HFF ‘s Manny de Zárraga , Hermen Rodriguez , Ike Ojala , Jorge Portela , and Tracey Goo marketed the property on behalf of the seller, LaSalle Investment Management ‘s LaSalle Income & Growth Fund V. HFF also found the buyer, Sumitomo Corporation of Americas . “Miami Tower is perfectly positioned to take advantage of the exciting renaissance of the Miami CBD, which has been ranked as top US metro for job growth in 2015 and sixth most important city in the world for ultra-high net worth individuals” says Rodriguez. Miami Tower is one of the world’s most recognized office buildings due to its changing palette of exterior lighting schemes. LaSalle owned the property since purchasing it in December, 2010, in a sale also arranged by HFF. The company paid $105.5 million in what was one of the highest-valued commercial real estate trades in the market in 2010. Since then, LaSalle installed a new lighting system as part of more broad-based tower renovation, and repositioned and leased the tower to 92% occupancy. Designed by renowned architect, I.M. Pei, the iconic Miami Tower has 37 stories of office space situated above 10 stories of parking, a Metromover station and ground level retail space. Long-term and blue-chip tenants include Carlton Fields, TotalBank, UBS Financial, Genovese Joblove, Ver Ploeg and the GSA. Now was the right time to sell. LaSalle doubled its sale price. But was it a good time to buy? That may depend on whom you ask, but certain realities are clear. Gunster attorney Brian Belt stresses there has been very little new capacity built in the urban core areas over the last few years, in part due to high land prices and high construction costs. As a result, he tells GlobeSt.com office vacancy rates are generally in good shape and the lack of new product is tipping the balance of power in the favor of landlords. “Growth is being fueled in part by new employers entering the market and by internal growth,” Belt says. “However, the influence of internal growth of existing tenants is somewhat mitigated by more efficient uses of space and the need for less space as the result of the use of technology.  There is a flight to quality as tenants look for more efficient designs, energy savings and newer space. Miami Tower’s Downtown qualifies it for an almost perfect Walk Score of 99. The office building is steps away from some of Miami’s hottest restaurants, including Zuma, I’l Gabbiano, Komodo, Cirpriani, Wolfgang’s Steakhouse, Bistro Modero and Coya. Luxury hotels surrounding the office asset include Epic, JW Marriott Marquis, Viceroy, Hyatt Regency and Intercontinental. Downtown Miami has witnessed luxury residential development in recent years, along with Whole Foods Market, an 18-screen Silverspot Cinema and other lifestyle amenities. “We are excited to add Miami Tower to our portfolio of commercial properties here in the US,” says Robert Obringer , vice president of Sumitomo’s commercial real estate unit “As part of our constant management of assets, we are always looking for opportunities that will maximize return on investment, and this property offers a strong upside potential for in-place cash flow and the opportunity to increase value.”