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(This story, in slightly different form, originally appeared in ALM’s Daily Business Review.)

MIAMI-Already trailing two rival projects in a soon-to-be crowded office market, the developer of Brickell Financial Centre is adjusting tactics to better compete for tenants down the road. Unencumbered by existing debt, Brickell Financial developer Foram Group is trying to position itself to stay in the race long term.

Not having a lender forcing Foram to rush to finish the 40-story office tower allows the company to sit back, if it so chooses, and let some of the nearly two million square feet of office space in the Brickell pipeline fill up, executives say. And with 1450 Brickell and Met 2 scheduled to be completed in the first two quarters of 2010, Foram has backed off placing a timetable on when Brickell Financial will be completed.

John Breistol, Foram Group president, says the company has enough cash in place to complete the major office project at 680 Brickell Ave. even without obtaining financing, which is only being offered at extremely high interest rates. Foram founder Loretta Cockrum turned over day-to-day control of the project to Breistol about a year ago.

The Foram entity funding the project, Brickell Financial Centre LLC, has pumped about $160 million into the 600,000-square-foot project, which executives say is about 70% complete. The remaining stages of construction—building a glass curtain wall, the interiors and landscaped plaza—would cost about $140 million. Curtain-wall installation should be completed by June 2010.

But Foram is no longer targeting a specific completion date, Breistol said. With 1450 Brickell and Met 2 far ahead of Brickell Financial Centre in construction, Foram is backing off earlier pronouncements that the project would be completed in the third quarter of 2010. The two other projects will add nearly 1.3 million square feet of office space to the Brickell area.

Foram plans to let market demand dictate when Brickell Financial Centre should be completed, Breistol says. Not having construction debt allows the company to maintain a flexible timetable. Without pressure from lenders to fill the tower, it can also be more aggressive in pricing rents.

“We do not have someone looking over our shoulder saying ‘you must do this,’” Breistol says. “We’re not just developing this property to sell it. This is a long-term hold for our portfolio, and we will be a tenant in this building.”

Breistol would not rule out obtaining financing when the capital markets open up: “If there is reasonably priced debt at the right term, we would entertain it,” he says.

Backing off a target completion date is a sound strategy given the glut of office space under construction in Brickell, says real estate attorney Steve Silverman, a shareholder at Kluger Kaplan Silverman Katzen & Levine in Miami. With Brickell Financial Centre clearly third in line, Foram must maintain its credibility in the marketplace by not naming a target completion date, says Silverman, who is not involved with the project. Setting a completion deadline and missing it would lead to a major backlash from prospective tenants.

“If [Foram] was my client, I would counsel them not to put a date on it,” Silverman says. “Putting out timetables that will not be met for any reason will diminish their ability to attract the type of tenants they want. There will be a glut of office space in the downtown Miami and Brickell markets for up to five years.”

A major benefit to moving ahead with remaining construction, if Foram has the cash in place, is significantly lower material and labor costs, says real estate attorney Eric Neuman, a partner in Boca Raton’s Buckingham Doolittle & Burroughs. Construction expenses are down as much as 25%, he says, but will not stay at that level much longer.

“If [Foram] waits too long, the occupancy levels might be on the upswing but so will the cost of construction,” Neuman says. “Those who have the option can build on the cheap now.”

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