Swire nixed its plan for an office supertall in Brickell, amid questions over the long-term viability of South Florida’s office market.
The real estate arm of the Hong Kong-based firm won’t develop the roughly 1,000-foot-tall One Brickell City Centre, instead hiring CBRE to put the site at 700 Brickell Avenue and 799 Brickell Plaza in Miami on the market, Bloomberg reported. Swire plans to redirect any sale proceeds to its planned Mandarin Oriental-branded condo and hotel project on nearby Brickell Key.
CBRE didn’t immediately provide an asking price for the 2.8-acre site.
“The current office market has been challenging, and the pre-leasing for that specific scheme has not materialized in the way that we had hoped,” Henry Bott, president of Swire, told the publication.
In 2022, Swire and Related Companies revealed their proposal for One Brickell City Centre. The duo scored approval that year for floor plates ranging from 40,000 square feet on upper floors to 60,000 square feet on lower floors, which would have been some of the biggest floor plates in Miami.
The project added to the ballyhoo at the time over the tri-county region –– and especially Miami’s Brickell –– becoming a magnet for out-of-state companies and an office mecca.
From late 2020 through 2022, out-of-state companies expanded or moved to South Florida, largely attracted to the state and tri-county region’s business-friendly climate. They leased big blocks of space, pushing up office rents at prime new projects to a record of nearly $200 per square foot.
Billionaire hedge funder Ken Griffin moved his Citadel and Citadel Securities’ headquarters from Chicago to Brickell, leasing at 830 Brickell, the neighborhood’s newest office tower. Others taking space at the building included law firm Kirkland & Ellis, Marsh Insurance, CI Financial and A-CAP.
But over the past two years, interest rates remained elevated; lenders became more skittish on offices, including in South Florida; and the influx of new-to-market firms slowed. Some companies that leased during the boom pulled the plug on their planned South Florida offices. Questions arose whether developers with planned office towers would score enough preleasing to land construction loans or fill their space after completion.
Others with pending plans for Brickell projects are the Ardid family’s Key International, which wants to redevelop its 13-story building at 848 Brickell Avenue into a 51-story office tower; and Santander Bank, which wants to replace its 14-story building at 1401 Brickell Avenue with a 40-story office tower.
Griffin also plans to develop a new headquarters tower at 1201 Brickell Bay Drive for Citadel and Citadel Securities, with the 830 Brickell lease being for a temporary office. The 1,032-foot supertall will have 1.3 million square feet of offices, a 212-key hotel, fine dining restaurants and a spa.
The announcement of Swire scrapping One Brickell City Centre comes on the heels of Griffin tapping Related Companies for Citadel’s headquarters tower. Related was founded over 50 years ago by Steve Ross, who last summer stepped back from the firm to start West Palm Beach-based Related Ross to focus on South Florida.
A source last week confirmed to The Real Deal that Related Companies and Related Ross’ joint venture with Swire on One Brickell City Centre is no longer active.
–– Lidia Dinkova