Coworking Firm To Backfill Miami Space Forsaken By WeWork
A South Florida-based coworking firm will take over a former WeWork space in Downtown Miami, a three-floor lease that covers space the coworking giant vacated two years before it filed for bankruptcy in November.
West Palm Beach-based Vast Coworking Group is planning to open a Venture X coworking space at the historic Security Building at 117 NE First Ave. in Miami, according to a news release. The 20K SF lease comes with an option to expand and makes Venture X the building’s anchor tenant.
Matt Cozza, Vast’s vice president of development, said in an email that the firm is aiming to open the Security Building location in the next three months, but that could be pushed to later this year. The firm has more than 80 locations, mostly in North America across three brands: Venture X, Office Evolution and Intelligent Office.
Vast is also negotiating a handful of leases in several cities that include backfilling some of the 89 properties WeWork has cut during its bankruptcy, Cozza said.
Vast is working with Mike Trumpy, a Chicago-based broker at JLL, to identify potential new locations, Cozza said. Colliers represented Fuse Group Investment, the owner of the Security Building, in the Miami lease.
The deal to take occupancy of the seventh through ninth floors of the 96K SF property follows a similar deal that WeWork struck in 2017 before it soured and led to the building's ultimate foreclosure.
The 16-story building, which is on the National Register of Historic Places, was converted by the embattled coworking firm from residential condos to coworking space after the property was acquired in 2015.
WeWork opened its flagship Miami office at the property in 2017 but vacated in early 2021 despite having signed a 15-year lease. The landlord faced a $37M foreclosure lawsuit in January 2021 brought by Platform Capital, the Denver-based private equity firm that provided a $38M mortgage for the property in 2016.
The suit was brought against an entity called Security Building AR Owner LLC and four loan guarantors from a range of real estate firms and a WeWork executive: Richard Weisfisch, director of Florida-based Maxwelle Real Estate; Andrew Joblon, founder of Turnbridge Equities; Arash Gohari, a former co-head of real estate at WeWork; and Daniel Gohari, founding partner of Avenue Property Group.
Fort Lauderdale-based Fuse acquired the building out of foreclosure in June 2021. Property records indicate it paid $12M for the building in a deed-in-lieu-of-foreclosure sale, but the firm declined to disclose at the time how much it paid to buy the mortgage, The Real Deal reported.
Fuse planned to sue the WeWork affiliate that had backed out of its lease and its parent company for allegedly breaching the contract, Michael Ehrenstein, an attorney at Ehrenstein Sager who represented Fuse in the sale, told TRD at the time of the acquisition.
“They haven’t paid their rent and they are not there,” Ehrenstein said.
It is unclear whether the buyer sued WeWork or if a resolution was reached. Representatives for Fuse and Ehrenstein didn’t respond to requests for comment, and WeWork declined Bisnow’s request for comment.
The Security Building has remained largely vacant since WeWork’s exit, according to a LoopNet listing for the property. Colliers is marketing space on every floor but the three that Venture X will occupy, with most listings spanning the entire floor and priced at $45 per SF in a market where the average asking rate is $62.49 per SF, according to Avison Young.
As the dust has settled at the Security Building, Miami has become a hot spot for coworking space. WeWork plans to continue operating its five Miami outposts while it uses Chapter 11 proceedings to vacate nearly 100 North American locations.
Miami was the fourth-most-expensive metro area for dedicated desk space at coworking facilities at the end of 2023, and the price for an open workspace subscription grew 81% year-over-year to $179 per month, according to a report from CoworkingCafe.
The Vast deal is the latest in a string of Miami expansions for coworking firms with more stable financial footing. Mindspace in February opened a three-story location in Downtown Miami and another in Wynwood. Quest Workspaces announced in October that it would take three floors at the 47-story Miami Tower, the coworking firm’s fifth Miami location.
The city had 143 coworking locations spanning 1.4M SF at the end of 2023 after six new locations opened in the fourth quarter alone, CoworkingCafe reported.
