Akerman Leaving SunTrust International Center, Inks 108,000 SF Lease Deal

Oct 09, 2014 No Comments by

Revised October 13, 2014

After months of speculation, Akerman—Florida’s largest law firm—announced it will move its Miami headquarters from downtown to a building under construction at the sprawling Brickell City Centre.

Akerman will lease 108,000 square feet over more than six floors in one of two office buildings at the mixed-use complex being built in Miami’s financial district. Akerman, which will move next year, will have top billing as the marquee tenant, taking 80 percent of the building.

Tere Blanca of Miami-based Blanca Commercial Real Estate, with support from Alexander Cahlin and David Valdez, represented Akerman LLP in the deal.

The question of whether the Miami-based mega firm would remain at the  SunTrust International Center, where it leases 116,000 square feet on seven floors, has been a matter of major speculation in Miami real estate circles. The firm has 160 lawyers and 114 staffers in Miami and has been the building’s largest tenant since 1995.

Akerman’s SunTrust lease expires in 2018, but the firm is exercising an early-termination option, which will cost about $5 million, according to Tim Prunka, corporate managing director at tenant representative Savills Studley, who is not involved in the transaction. Akerman is expected to leave the SunTrust building next fall.

Akerman looked at other new office towers, but the idea of practically leasing almost an entire new building was too alluring to pass up, sources said.

“This move will bring valuable efficiency to our regional footprint while increasing our immediate capacity for headcount growth around 10 percent,” Andrew Smulian, chairman and CEO of Akerman, said in a statement.

While the firm will take up less space, Smulian said: “The increased capacity is the result of reimagining how we use our offices to work collaboratively. We are gaining significant, additional space by these changes, which reflect the evolution of our industry as well as our firm in how we deliver services to clients. This is a remarkable opportunity.”

Prunka called it “an adventurous move, moving into their own building. There are a lot of benefits to being in your own building—the idea you can make things much more personalized. On the other hand, people like living in neighborhoods and the interaction between companies and other professionals.”

Additionally, Akerman likely got a good deal as its top real estate shareholder in Miami. Neisen Kasdkin, represents Brickell City Centre and Swire.

Brickell City Centre is a $1.5 billion project that will span four blocks west of Brickell Avenue and south of the Miami River.

The project developed by Hong Kong-based Swire Properties Ltd. will include a retail segment, restaurants, hotel, office towers and condominiums. It will feature a renovated Eighth Street Metromover Station, two levels of underground parking and covered sidewalks.

Saks Fifth Avenue has committed as an anchor tenant, and Mexico City-based Cinemex announced last month it would open a luxury, dine-in cinema with oversized leather seats at the site.

“Akerman’s new lease is clearly a coup for the project,” said Megan Kelly, executive president of Swire Properties. “That Akerman has chosen Brickell City Centre for its Miami office is an honor,” she said. “Miami has developed into a worldwide center for finance and trade.”

On the other hand, Akerman’s decision is clearly a blow to the 41-year-old SunTrust tower, which embarked on a $13 million facelift last year that includes a makeover of the lobby and a new fitness center, conference center and rooftop terrace.

Jon Blunk, senior director for Suntrust building rep Cushman & Wakefield, said SunTrust had expected Akerman to leave the building for a newer one.

“That’s the reason we spent $13 million is to reposition the building,” he said. “Akerman’s been there a long time and obviously made a decision it needed a change. We are committed to backfilling the space. The average size of tenants these days are 3,000 to 5,000 square feet, so that’s what we will be aiming for.”

Prunka of Studley agrees that the SunTrust building will be fine.

“They’re not caught unaware,” he said. “When Crocker Partners bought the building, they knew Akerman’s lease was coming up. I’m sure they are not happy about it, but it’s the natural progression of things when new buildings spring up and older buildings become dated. But it’s a good building, and it’s centrally located. They’ll be fine.”

Some point to the experience at the Southeast Financial Center downtown, which lost key law firms tenants such as Bilzin Sumberg Baena Price & Axelrod and Berger Singerman but rebounded by leasing to a slew of smaller law firms in the last year.

With more than 600 lawyers and lobbyists in 20 offices nationally, Akerman is ranked 108th on The American Lawyer’s listing of the top 200 U.S. law firms by gross revenue with $298 million in 2013.

 

Source: DBR

 

 

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Industry News, Miami-Dade County Office, NA, Office
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