Boca Colonnade II

(Crystal Proenza is associate editor of Real Estate Florida.)

BOCA RATON, FL-It seems every few weeks another report is released describing the softening and rising vacancies of South Florida’s commercial real estate market. The residential crisis has spilled over into the commercial sector and seems to be lingering, though the story isn’t doom and gloom for every submarket.

“Those companies that are around for the long term make good decisions in good and bad markets,” says George Ledwith, vice president of development with Liberty Property Trust in Boca Raton. Companies such as Liberty are persevering and even prospering in South Florida, despite decreased activity in the market.

In fact, the Malvern, PA-based REIT is set to deliver 200,000 sf of office space with Boca Colonnade II at the Arvida Park of Commerce in Boca Raton and Liberty Center at Monarch Lakes in Miramar. In total, Liberty owns and manages nearly two million sf within 21 office and industrial properties in South Florida—and is not daunted by the waning commercial market.

“Ultimately, good real estate and management will prevail,” says Ledwith. “We’re looking forward to better times, but we have been preparing and have been prepared for this.”

That statement is proven by the amount of activity in which Liberty is currently involved. Boca Colonnade II, a 100,000-sf building located at 750 Park of Commerce Blvd., has just received its certificate of occupancy. The project, which cost between $25 million and $30 million, includes a four-story, 360-car parking garage and will serve as Liberty’s new local headquarters, taking up 4,000 sf.

Liberty is working with multiple prospects for remaining space in the building, which is seeking LEED gold certification, according to Ledwith. Leasing rates are at $23.50 triple net, with expected operating expenses at $11 full service, he tells GlobeSt.com.

Within the park, Liberty also owns Boca Colonnade I and is in the process of site planning a third building 120,000-sf building, Boca Colonnade III, says Ledwith. The third building would also seek LEED certification.

“Our corporate strategy and plan is that everything we build will be LEED certified across the country,” he explains, including the company’s newest completed building, Liberty Center at Monarch Lakes, which is expected to open this month. The 105,000-sf project, located at 3100 145th Ave. in Miramar, is expected to earn LEED silver certification and is 50% pre-leased to a healthcare company. Once the rest of the space is leased, still another 105,000 sf is planned.

When asked how Liberty has so much activity happening in a supposedly slow market, Ledwith says the projects the company has going are based on its belief in South Florida as a long-term growth market for Liberty. The decision to build the Boca project was made about two and half years ago when the area had very low office inventory, making speculative buildings a better risk, says Andy Petry, vice president of leasing and development with Liberty. But the fact that the markets have softened significantly did not catch the REIT off guard, he says.

“The delivery of our product in a soft market wasn’t by accident,” Petry explains. “It was thought out when we went through with development,” and the company was prepared for a competitive or soft market. “If we have good product that’s well managed, whether it’s a good or bad market we’re going to get more than our share of deals and we’ll do better than the market—and that’s our goal.”

13621 NW 12th St.

Liberty is also taking advantage of acquisition opportunities, as it recently purchased a 106,910 sf, 100% leased class A office building in Sunrise for $16.5 million. The building, located at 13621 NW 12th St. in Sawgrass International Corporate Park, where Liberty owns two more projects, was purchased from New York City-based Real Estate Capital Partners. It is currently leased to UnitedHealthcare, which has under two years left on its current lease, says Darren Sides, senior director of Stan Johnson Co., who represented both sides of the transaction.

“The owner has worked with Liberty in the past on a project in the northeast and they have a good relationship,” Sides says. He adds that Liberty’s knowledge of the submarket gave the seller added confidence, which he says is refreshing to see in light of the current market.

Liberty’s reputation for performing and getting deals done also helps companies stay afloat in a sinking market, local brokers agree. “They’re willing to take on a little risk, and that’s paid off for them well historically,” says Rod Loschiavo, senior director with Cushman & Wakefield in Fort Lauderdale, who has worked with Liberty on leases in the past. “They don’t get bogged down on little details and they get deals done in a timely fashion.”

Liberty is also successful in leasing, says Petry. Grant Thornton has signed a 24,000-sf agreement to occupy its Lake Shore Plaza asset, also at the Sawgrass park in Sunrise. Numerous tenants have renewed existing agreements, he says, and new lease signings are on the horizon.

Liberty has its sights on Miami-Dade County and will make an acquisition when the time is right, says Ledwith. “Liberty has been around for a long time and has been through a number of cycles,” he says.