Colonial Properties Enters Miami With Office Buy

"We're very pleased that our first purchase in Miami is in the highly desirable Brickell Avenue submarket," he says, adding, "we like the short-term and long-term fundamentals in the Miami office market. This is an excellent market for office properties, particularly considering the scarcity of land for development."

The seller is an affiliate of Lehman Brothers, according to Hallowell, who declines to disclose Colonial's acquisition price. A representative of the Miami-Dade County appraiser's office tells GlobeSt.com the sale price would not be available for up to three more weeks. The records do note, however, that the Lehman affiliate acquired the building for $36 million, or about $153.19 per sf, in April 2004.

On condition of anonymity, a real estate principal tells GlobeSt.com the most recent selling price was "probably at a level of between $170 per sf and $180 per sf." That would put the price tag between approximately $40 million and $42 million. The building was constructed in 1982 and renovated in 1996. It is approximately 86% leased and includes a Morton's Steakhouse restaurant on the ground floor.

"With a diverse tenant base, the building offers…a significant opportunity to increase net operating income through lease up and tenant rollover," Hallowell says. "The building fits well into our portfolio." According to a first-quarter report from the Miami office of Cushman and Wakefield, the average asking rental rate for class A office space in the Brickell submarket is $32.52 per sf.