Office Market Scores With Southeast Sale, But Some Asset Classes Lack Trophy Transactions
The real estate market remained strong this year, even though some asset classes experienced lower sale prices and lacked trophy transactions.
October 23, 2017 at 12:00 AM
9 minute read
The preeminent deal in the past two years — the $516 million purchase of the Southeast Financial Center in downtown Miami — speaks of the enduring demand by foreign buyers for South Florida office space.
Moreover, it speaks to the health of the region's office market.
It's strong thanks to high demand and limited supply, which in turn push up rental rates, said Alex Zylberglait, senior managing director of investments for Marcus & Millichap in Miami.
“It's good to be an office building landlord right now,” he said.
A company tied to the family office of Spanish billionaire Amancio Ortega, founder of the Zara apparel and accessories chain, bought the 55-story tower. The blockbuster sale in December may have signaled growth in 2017.
In the first half of this year, the net absorption of office space was more than that for all of 2016 in Miami-Dade County, according to a Colliers International report.
The growth of tech-related, e-commerce and wealth management companies means the industries are scooping up more offices, according to Colliers.
Things were looking up over the past year in two other asset classes.
Demand for industrial and multifamily real estate largely is fueled by institutional investors, experts said.
Of the 10 biggest industrial deals since October 2016, eight were purchases by institutional buyers, Steven Wasserman, executive vice president of Colliers International South Florida in Fort Lauderdale, said after reviewing a list of the deals compiled by real estate data provider CoStar Group.
The two biggest deals were purchases by CenterPoint Properties, a Chicago-based industrial developer and investor owned by public pension fund CalPERS and real estate investment management firm LaSalle Investment Management.
CenterPoint Properties bought the Pan American Business Park at 10400 NW 122nd St. in Medley for $106 million in December and the Winn-Dixie distribution and warehouse facility at 3300 NW 123rd St. northwest of Hialeah in August.
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