(Crystal Proenza is associate editor of RealEstate Florida.)

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CORAL GABLES-Deka Immobilien, a German open-end property fundbased in Frankfurt, has acquired the 207,000-sf BAC Colonnade classA office building here for $82.9 million in all-cash transaction.Brokers say the $382-per-sf deal may signal a new trend within theongoing credit crunch.

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ING Clarion Partners LLC advised and completed the transactionon behalf of Deka Immobilien, while the seller, Fort Worth,TX-based Crescent Real Estate Equities, was represented by DrewBarnette of Eastdil Secured. The 11-story building, located onMiracle Mile at Ponce de Leon Boulevard, contains 27,000 sf ofretail, is 94% leased to 19 tenants and is associated with theadjacent 157-room Westin Colonnade Hotel.

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Stephen Nostrand, executive vice president at Colliers AboodWood-Fay in Miami, who represents the owners of the Westin, saysthe deal is indicative of a trend in sales over the last few monthsin Coral Gables. He says that two other office buildings, 2525Ponce de Leon and 355 Alhambra, have and will in the near futuresell to institutional core buyers. These buyers, investing forpension funds, endowment funds and investors who only requirelimited returns on their cash, don't want to take any risks andwant absolute high-quality assets in the best locations, heexplains.

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"The reason we bought this building is we think it's one of thebest in the most desirable submarkets in South Florida," saysEdward Rotter, managing director at ING Clarion Partners. "I thinkit points to the fact that institutional buyers are recognizingCoral Gables as a good submarket. There have not been manyinstitutional-grade properties of this caliber on the market," hesays of the recent sale of 2525 Ponce and contract pending at 355Alhambra.

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"The Coral Gables submarket has very low vacancy rates (5-6%),strong demand and big supply constraints," Rotter says. "There isalso the benefit of a very strong presence of Latin and SouthAmerican businesses, which tempers any downturn in the domesticeconomy." Brokers also point to Coral Gables as a market that has amuch better risk profile for return then the downtown and Brickellclass A markets about to be flooded with almost 1.9 million sf ofnew space.

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"Until that space gets leased up you just don't know whererental levels are going to end up," notes Rotter. However, thatdoesn't seem to be holding institutional buyers back from thatmarket either.

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"777 Brickell Avenue is on the market and there are several corebuyers who are chasing that asset who are going to make the finalcut," says Nostrand. The main difference to be seen in the sale ofthe Brickell building versus those transactions in Coral Gableswould be the cap rate, he notes, because of new office space comingonline.

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