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| July 10, 2008 |
By: Terry Sheridan |
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flurry of leasing by communications technology companies has brought life to the Sawgrass office district in Sunrise, with more than 200,000 square feet of deals signed or in the works.
And the U.S. Drug Enforcement Administration is close to signing a lease for 150,000 square feet of office space in nearby Weston.
News of 350,000 square feet of lease deals would be cause for rejoicing anywhere in South Florida. But Broward’s western office market comprising Sunrise, Plantation and Weston leads the county in office vacancies, according to a second-quarter report by Cushman & Wakefield released late last week.
“It’s surprising to see that much activity in this economic market,” said broker Ken Morris, president of Morris Southeast Group/Oncor International in Plantation.
Morris, who is shopping for office space on behalf of two clients he declined to identify, said the deals were heartening amid widespread “doom and gloom” news in the commercial real estate industry.
Much of the activity in the Sawgrass submarket comes from larger tenants, “and in this [economic] market that’s very surprising,” said broker Deanna Lobinsky of CB Richard Ellis in Fort Lauderdale.
Lobinsky represented landlord PNC Realty Investors in Foxconn International Holdings’ lease of 42,500 square feet at 1551 Sawgrass Corporate Parkway. She declined to discuss lease terms.
Based in China, Foxconn designs and manufactures cell phones.
Joining Foxconn were Ontario-based Research in Motion, the company that makes BlackBerry wireless communications devices, and information technology company General Dynamics C4 Systems of Scottsdale, Ariz.
Their searches, announced almost simultaneously, “put the market in a frenzy,” Lobinsky said.
Research in Motion leased 60,000 square feet at Duke Realty’s 90,000-square-foot Sawgrass Pointe II building near completion at 1200 Sawgrass Corporate Parkway.
General Dynamics leased 22,000 square feet and is expected to grow to 40,000 square feet at Duke’s 230,398-square-foot Sawgrass Pointe I at 1000 Sawgrass Corporate Parkway, said a broker who spoke on condition of anonymity.
According to a notice on the city of Sunrise’s Web site, the company’s new office is an engineering design center.
Duke senior vice president Ed Mitchell declined to discuss the deals, citing confidentiality agreements.
Calls and e-mails to Research in Motion, Foxconn and General Dynamics were not returned.
The companies originally competed to lease the 63,850-square-foot building vacated by Motorola at 789 International Parkway in Sunrise.
Motorola had laid off hundreds of employees and consolidated operations at its sprawling Plantation facility earlier this year.
Motorola spokeswoman Maya Komadina cited the company’s 8K report filed with the Securities and Exchange Commission in April that indicated 2,600 layoffs companywide would help reduce costs by $500 million as part of a “strategic review of business operations.”
In South Florida, the company laid off 355 workers, she said.
Cable giant Comcast was first to snap up the former Motorola space, signing a 10-year lease deal in late May and valued at about $15 million, according to a source who spoke on condition of anonymity.
That forced the other companies to seek space nearby.
Broker Jay Adams of CB Richard Ellis in Fort Lauderdale, who handled the Comcast deal, did not return a phone call by deadline.
“The majority of the employees they [Foxconn, General Dynamics and Research in Motion] are hiring came from Motorola … so they felt they needed to be close to Motorola’s existing location to make it very simple and be attractive to these employees,” Lobinsky said.
Technology companies aren’t the only ones making deals in West Broward.
At International Place III at 1600 Sawgrass Corporate Parkway, Miami-based Norwegian Cruise Line has leased 25,000 square feet in the 105,000-square-foot building for a call center to handle sales for two ships to launch within the next two years, Lobinsky said.
NCL spokeswoman Courtney Recht in Miami said the Sunrise location will function as an “overflow facility” as the company expands its operations.
NCL’s broker, Stewart Niles of Travers Realty/Oncor International in Los Angeles, did not return a phone call by deadline.
And in Weston, the DEA is expected to sign a lease soon for about 150,000 square feet of space at Duke Realty’s Weston Pointe II and IV buildings at 2100 and 2200 N. Commerce Parkway, said three brokers who spoke on condition of anonymity.
Duke’s Mitchell declined comment. DEA spokeswoman Jeannette Moran referred the Daily Business Review to the General Services Administration offices in Broward, where a representative was unavailable for comment.
The Review first reported in March that the agency planned its move to Weston. The DEA’s lease at 8400 NW 53rd St. in Doral is scheduled to terminate in December, Moran said at the time. The Weston location was a contender in the agency’s space search, she said.
Even with the latest deals, west Broward still has an excess of vacant office space. Companies can still get a better deal than a year ago, Morris said, but the latest burst of activity could to make landlords bolder — demanding higher lease rates and offering fewer concessions.
According to the Cushman & Wakefield report, West Broward’s 1.07 million square feet of vacant office space leads the county’s submarkets. A close second is the Cypress Creek market north of downtown Fort Lauderdale with about 1 million square feet of vacancies.
Of the vacant west Broward space, Sunrise comprises 412,648 square feet; Plantation, 435,416; and Weston, 224,349.
Terry Sheridan can be reached at tsheridan@alm.com or at (954) 468-2614.
Deanna Lobinsky photo by Melanie Bell
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