Buyers Hunting for HQ Space
The number of companies looking to buy their own HQ space in South Florida has picked up recently, Avison Young principal Keith O'Donnell (right, with Boca Raton C of C prez Troy McLellan) tells us. Some reasons: a combination of low interest rates, lack of supply of smaller rental buildings in good locations, and Congress' consideration of tax law changes--on how leases are being expensed--would make leasing more expensive in some cases. (Though as we've found out "consideration by Congress" can mean we're in for a wait.)
There's also a pool of motivated sellers for this kind of office property, Keith adds. Interested sellers typically own a building that's 50% or less leased, and they calculate the cost of lease up--plus the time it takes to lease up in a still-soft office market for organic growth--and compare that with the projected sale price. (We should've paid more attention in math class.) The math often comes down on the side of selling. Recently Keith and colleague Jonathan Senn repped the seller of a 40k SF Class-A office building and adjacent 6.2 acres at 1501 SW FAU Research Park Blvd in Deerfield Beach. The buyer, People's Trust Insurance Co, plans to use the property as its HQ, with the land as future expansion space.
