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TIAA-CREF Sells $375M Stake In Waterford Offices

Two of the nation’s largest institutional investors are combining on a $524 million investment in Miami-Dade County’s Airport West office market.

TIAA-CREF, the nation’s largest manager of U.S. institutional tax-exempt real estate assets, on Wednesday announced the $374.5 million sale of a 49 percent stake in its Waterford at Blue Lagoon holdings to Allianz Real Estate of America, and they plan to invest $150 million to erect two new office buildings as part of the new joint venture.

The deal brings together investment funds from Teachers Insurance and Annuity Association and Allianz Real Estate of America, a subsidiary of a German-based multinational.

The venture controls the corporate park’s six office buildings: 1000 Waterford, 5200 Waterford, 5201 Waterford, 5301 Waterford, 701 Waterford and 703 Waterford along Blue Lagoon Drive, Northwest 57th Court and 62nd Avenue south of Miami International Airport.

The buildings offer more than 1.4 million square feet of office space in a submarket with about 8 percent vacancy.

“The reality is the market is very strong,” Adriana De Alcantara, TIAA-CREF senior director of managed accounts and portfolio management, told the Daily Business Review. “Our buildings there are 98 percent leased, and we do have a problem trying to get all tenants in.”

New York-based TIAA has owned the property for about two decades since long before the park was developed in 2009. It will retain a 51 percent controlling interest and continue to manage the sprawling development with about 100 multinational tenants.

Unable to accommodate expansion requests, the financial services company mulled new development on two adjacent parcels totaling 26 acres, with space on one lot for four 250,000-square-feet office buildings and enough room on the other to accommodate a 10-story midrise.

“If you’re seeing tenants who want to expand and you can’t accommodate it, that’s not good,” De Alcantara said.

The planned expansion would mean undertaking new risks to create a spec office building with no preleasing, so TIAA started talks with Allianz in March to replicate an earlier deal. The two investors are partners on a similar project in Houston, where they teamed up for a 1.7 million-square-foot Class A office complex called Four Oaks Place.

“The idea was not to sell … but we wanted to do more,” De Alcantara said. “We feel there are compelling reasons to develop.”

The partnership plans a 10-story, 250,000-square-foot building and hopes to complete permitting by December for completion in 2017. It’s also in the early planning stages for a second tower for delivery in 2018.


Source:  DBR