(Bloomberg) -- A Brazilian bank has snapped up the last available office space in a Miami skyscraper that has become a symbol of the city’s burgeoning financial sector, according to people familiar with the deal.
Banco Master has signed a lease for 26,000 square feet (2,415 square meters) at 830 Brickell, according to the people. The bank is paying roughly $190 per square foot, a Florida record and a rate on par with Manhattan’s priciest office space.
The tower, developed by Cain International and OKO Group, has attracted a high-profile tenant roster that includes Citadel, Thoma Bravo, and Microsoft Corp. Construction delays have pushed back the building’s completion to spring 2025, from an initial target of late 2022.
Representatives for 830 Brickell declined to comment on the lease. Banco Master declined to comment.
The building’s success at luring tenants reflects Miami’s rapid transformation into a financial and tech hub. Justin Oates, a senior vice president with Cain International, said rental rates have soared since the project launched in 2018, from $70 a square foot to $100 by early 2022.
“The building became a who’s who of the new Miami,” said Oates. “It’s been a catalyst.”
The tower benefited from being the only game in town when firms started flocking south. It’s the first Class A office tower to be delivered in Miami’s Brickell district in more than a decade, according to the developers.
While Cain International and OKO Group had originally planned to occupy the space now leased to Banco Master, they instead opted to rent it out when they realized the high demand for premium offices.
“We had more tenants than we had space,” Oates said. “We’ve been very fortunate with our timing.”
Building Slowdown
But the building is likely to be the last big new tower that Brickell, Miami’s financial center, will see for at least the next five years.
Other commercial real estate projects aspiring to replicate the success of 830 Brickell are so far coming up short. A tower from billionaire Steve Ross that’s meant to be Miami’s tallest has yet to announce a single lease. Another project, a 51-story building called 848 Brickell that’s backed by Chicago’s Sterling Bay, is struggling with similar problems.
The squeeze in Brickell’s office market is part of a city-wide slowdown. Last year, leasing activity fell 25% compared with the boom times of 2022, according to Jones Lang LaSalle Inc. The first quarter of 2024 was the slowest start to the year in leasing activity since 2010, according to Newmark, a real estate advisory firm.
Steven Hurwitz, a senior managing director at JLL, is trying to get 848 Brickell off the ground. He said there are multiple small tenants interested in offices, and bundling them together might be enough to compensate for not having an anchor tenant.
Ross faces similar issues in One Brickell City Centre, which is set to be located across the street from 830 Brickell. More than a year after a groundbreaking ceremony for his tower, developers Related and Swire Properties Inc. have yet to announce a single tenant.
For Brian Gale, vice chairman for Cushman & Wakefield in Florida, who represented the developers for sales at 830 Brickell, the dearth of new competitors has had one positive side effect.
“I know what I’m doing — I’m raising the rents,” he said.
(Updates with data on market conditions starting in 10th paragraph.)
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