Located at 200 South Biscayne Boulevard, First Union came into being as the Southeast Financial Center in 1984, two years after Houston TX-based developer Hines began construction. The building was named for its main tenant at the time, Southeast Bank, which housed its headquarters there. Hines later relinquished the building to Aetna after foreclosure on a $220 million property loan in 1994.
Today the looming edifice boasts a mere 5% vacancy and is home to such tenants as Dow Jones & Co., Merrill Lynch, and Pricewaterhouse Coopers LLP. According to CB Richard Ellis, the average office vacancy rate for the downtown market is about 12.4%. But while the structure is way ahead of the curve in vacancies, it could be hindered by the complications of obtaining terrorism insurance on trophy properties since the September 11 attacks.
There has been no official comment from Shorenstein as of yet, but disposing of the property appears to be in line with the company's strategy. Shorenstein describes its investment policy as follows: "Shorenstein believes that attractive risk-adjusted returns can be consistently achieved through an investment program that is focused on acquiring and developing high-quality office properties at appropriate points in the investment cycle, utilizing a conservative amount of debt, operating these properties to produce a solid and consistent cash return and selling these properties when capital is fully valuing the asset fundamentals."
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