With Citibank signing the initial lease on the 273,000-square-foot, class A building for 10 years with four five-year extensions, leasing at 396 Alhambra is expected to gain momentum as larger tenant prospects look for new space beyond Downtown Miami. Coral Gables is considered a quieter, less congested alternative to Brickell Avenue and other parts of the central business district.

The new tower is being developed by Eddie Avila and Hector Fernandez, principals of 396 Alhambra LLC, with financial backing by Agave Florida Investments LLC, the Mexican real estate arm of popular tequila brand Jose Cuervo. The developers are financing the majority of the $140-million project, says Darryl Robinson, the building's leasing agent and founding principal of Miami-based Oak Hill Advisors.

"What makes this project unique is the ownership's commitment to the Gables," Robinson tells GlobeSt.com. "They are extremely bullish on South Florida and felt that this was one of the last developable sites in the Gables, in a market that hasn't been overbuilt."

Coral Gables, with 5.9 million square feet of office inventory, currently has overall vacancy of just above 20%, three percentage points higher than the Miami-Dade County average, according to Cushman & Wakefield research. Asking rents for new space at 396 Alhambra are $40 per square foot, in line with the submarket average.

While more than 2.2 million square feet of new office space is being built in the Miami-Dade market, mostly in the Brickell and CBD submarkets, Robinson believes 396 Alhambra sets itself apart from those other buildings by its strong financial backing. The speculative building is far less likely to fall into a distress situation because of strong financial backing, which should appeal to prospective corporate tenants seeking at least 30,000 square feet.

"The landlords used to be the ones checking on the credit of tenants. Now, the tenants that are checking on the landlords," he says.

Construction of 396 Alhambra's north tower, at the corner of Alhambra Circle and LeJeune Road, is set to begin in the next two months with an opening date expected in the third quarter of 2011. Other marketing points of the building include 30,000 square feet of ground-floor retail and a dedicated parking garage with nearly 900 spaces.