South Florida Office Landlords Turning Bluegreen?
In potentially the largest office deal of the year, a Boca Raton timeshare company is shaking up the lethargic office market with a huge RFP.
Bluegreen Vacations tapped Newmark Grubb Knight Frank's Greg Katz to search for a potential new HQ location encompassing some 100k SF in Palm Beach and Broward counties. It's a big potential move and one that can push the needle in submarkets that have been languishing without significant office activity since the beginning of the year.
Bluegreen has been a fixture at the Boca Raton Innovation Campus (here) since 1997, when IBM stopped using the sprawling 1.6M SF spoke-and-wheel designed office complex at 5000 T-Rex Ave as its HQ. Bluegreen's lease expires by the sunset of 2018, and Greg notes the timeshare company is eyeing "all options," including renewing at Boca Raton Innovation Campus or even spearheading a new development. Much like other corporate America tenants, Bluegreen has been using those key words for its office that signal a change is needed: "more efficient space," "optimal location" and "unique amenities" that will help it recruit and retain talent, says Bluegreen Vacations SVP Susan Saturday.
The company appears to be hitting the market at the right time, as it's pretty much the biggest player scouting offices in South Florida. Last year saw strong office absorption, especially with such 100k-plus SF deals with Citibank, Akerman and Stearns Weaver. But of course those deals focused on Miami's CBD. Activity has slowed so far this year, especially in the suburbs, where little more than 68k SF was absorbed in Q1, according to data compiled by JLL. Palm Beach was especially anemic, with 28k SF of lost office absorption. The largest deal last quarter—29k SF from a state agency—means Palm Beach's vacancy rate still hovers at 17%, according to NGKF data.
That lackluster activity, coupled with a slew of new office owners hungry for deals (Palm Beach led the region in Q1 investment sales activity, NGKF stats say) means Bluegreen could get favorable treatment from landlords. While vacancies are high in the burbs, there are only a handful of office buildings that can accommodate 100k-plus SF tenants contiguously, including 321 North Executive Tower, which is under renovation, and the former Sheridan Healthcare HQ space at 1613 Northwest 136th Ave, according to JLL. Other possible contenders:
- Corporate Center at 110 East Broward Blvd in Fort Lauderdale with 170k SF (here).
- Spherion Corp at 2050 Spectrum Blvd in Fort Lauderdale with 126k SF.
- Plantation Corporate Center in Plantation with 119k SF.
- Sawgrass Lake Center in Sunrise with 107k SF.
- 4700 Exchange Court in Boca Raton with 132k SF.
- 5601 Hiatus Road in Tamarac with 100k SF.