The Exchange Filling Up With Lease or Buy Strategy

MIAMI—Lease or buy—it's an option that helped The Exchange, a six-building office complex in Fort Lauderdale, FL, close a string of transactions in recent months. The lease or buy strategy is rare among large Broward business parks.

Recent wins include Talk2Rep, which leased 9,228 square feet for its corporate offices, and the law firm of PeytonBolin, which purchased a 6,240-square-foot office condo suite. Asset manager and broker George Sacks, managing principal of Commercial Florida Realty Services, represented owner, The Exchange of Fort Lauderdale LLC, in the transactions.

“As Broward's office market slowly strengthens, we're seeing higher demand for small blocks of space in suburban locations,” Sacks says. “We have activity from professional firms and marketing-related companies that need 10,000 square feet of corporate space or less and are anxious to lock in costs before economic conditions shift. They're keenly aware of the market's signals, with Broward property values recovering and lease rates starting to increase in some of the county's class A complexes. They know interest rates will inevitably rise.”

The Exchange is located at 3303-3363 West Commercial Boulevard. With 83% of its 174,473 square feet occupied, complex is offering 1,900 to 6,500-square-foot office condos within a campus setting. Built in the mid-1980s and located at the entrance to Fort Lauderdale Commerce Center, The Exchange converted its space to office condos in 2007. Until the economy switched gears in 2008, it was selling both small and large blocks of space, Sacks says, thanks to a location close to Florida's Turnpike, Interstate 95, and the Fort Lauderdale Executive Airport.

Sacks explains that companies are running the numbers for lease versus buy, based on their business models. Tenants are securing today's favorable leasing rates, and owner-buyers who anticipate stable space needs are moving quickly on low interest rates and the availability of up to 90% Small Business Administration (SBA) financing.

Law firm PeytonBolin, which represents condominium and homeowner associations throughout Florida, will relocate from Tamarac offices to The Exchange in December. “We've found the cost of ownership is not much higher than leasing, and the tax benefits are significant,” says founding partner Mauri Peyton, noting that the law firm secured SBA financing through Paradise Bank. “Local property values are trending upward, and we expect the Commercial Boulevard business corridor to grow.”

Talk2Rep moved its corporate offices from Tamarac to The Exchange this summer. The company specializes in outsourced teleservices and live chat for multiple government agencies and recognized global brands such as AT&T, Casio, and Bayer.

“The Exchange's access to major roadways and Broward's airports is convenient for our staff and clients,” says Talk2Rep CEO Jim Ryan. “Our needs were complex, including placing a generator on-site, and Commercial Florida Realty streamlined the process.”