Swire Denies Attempting to Sell Miami Project as Market Slides

Ten months after starting to clear the site for an office development which is planned to be Miami’s tallest skyscraper upon completion, Swire Properties has shopped the project to potential buyers, according to a Wall Street Journal report this week, as demand for deskspace dips in the South Florida hub.

Swire has considered selling the site of its 1.51 million square foot (140,284 square metre) One Brickell City Centre project located in Miami’s financial centre of Brickell, according to documents viewed by the Wall Street Journal, while Swire’s partner for the project, New York-based developer The Related Companies, is said to be seeking to restructure its cooperation with the HKEX-listed developer.

“As a responsible developer in Miami, Swire continuously evaluates different options for its development sites throughout the city. The site on the corner of Brickell Avenue and 8th Street is currently not for sale,” a Swire Properties spokesperson told Mingtiandi.

The project’s challenges come as Miami’s office market shows signs of leveling off after a post-pandemic rush of corporate relocations to the city, with office leasing activity having fallen 25 percent in 2023 after a record year in 2022 and sublease vacancies climbing by 66 percent last year, according to JLL.

Related Companies had not responded to Mingtiandi inquiries by the time of publication.

Tallest Skyscraper in Miami

Located at 700 Brickell Avenue at the junction of SE 8th Street, the development is scheduled for completion in 2028 and entails a 1,040 foot (317 metre) tall office tower spanning 68 storeys, with 32,000 square foot to 50,000 square foot floor plates, the largest ever to be approved in Miami.

Swire acquired the 1.55-acre project site for $64 million in 2013, with the company joining with Related to unveil plans for One Brickell City Centre in 2022 as the inaugural collaboration between the two builders.

“One Brickell City Centre is a transformative development that sets the standard for the future of office buildings and showcases to the world’s leading companies that Miami is the new destination to call home,” Henry Bott, president of Swire Properties USA said in a May 2023 ceremony marking the commencement of demolition on the site.

Without specifying the nature of the cooperation between the two companies, Bott added, “Swire Properties and Related Companies take great pride in collaborating on a truly innovative office development that features thoughtful design, cutting-edge technology and amenities and features that aren’t available elsewhere in Miami’s office market.”

Upon completion, the building will be directly connected to Miami’s Metromover light rail transit system and will feature outdoor terraces on every floor, 15 foot to 20 foot floor-to-floor heights, a rooftop helipad, and 360-degree views of Biscayne Bay, Miami River and downtown Miami.

Until recently, Miami had proved to be among the rare US office markets to have weathered the challenges of the pandemic and the rise of work-from-home as finance and tech companies including Goldman Sachs, Blackstone and Microsoft added desk space in the city.

Grade A office vacancy in Miami stood at 9.8 percent as of year-end 2023, which was among the nation’s lowest and compares to a nationwide average of 19 percent, according to Colliers. However, demand is showing signs of sliding after new-to-market leasing in 2023 plunged by roughly 75 percent from record 2022 levels and with take-up of new projects now down approximately 50 percent from the five-year historical average, according to Newmark.

Florida Asset Sales

One Brickell City Centre constitutes the second phase of Swire’s $1.05 billion Brickell City Centre project, with the company having opened the first element of the 4.9 million square foot mixed‐use development in 2016.

The master-planned community includes a 496,508 square foot shopping centre, 260,000 square feet of office space across the Two and Three Brickell City Centre towers, and the 352-key East Miami hotel and serviced apartments, as well as two condo towers, and a 2,600-space underground car park.

Swire sold the pair of office towers to Santa Monica-based Northwood Investors for $163 million in 2020, and then sold East Miami to a joint venture between funds managed by Honolulu-based Trinity Real Estate Investments and New York-headquartered Certares Real Estate Management for $174 million the next year. Swire continues to manage the two office buildings and the hotel, as well as operate the hospitality property.

Swire retains a 62.93 stake in the shopping centre, with US mall REIT Simon Property Group holding a 25 percent interest and privately-held Bal Harbour Shops owning the remaining 12.07 percent. That mall reached full occupancy as of December.

In addition to those asset sales, Swire in 2022 also offloaded a Fort Lauderdale development site to a joint venture of Aimco, a New York-listed REIT focused on apartment properties, and Kushner Companies, the developer led by Jared Kushner, the son-in-law of former US president Donald Trump.

Swire’s Florida portfolio also includes a 75 percent stake in the 326-key Mandarin Oriental Miami, which is set to be redeveloped as part of a $1 billion luxury residential and hospitality project on the southernmost point of Brickell Key, a man-made island which Swire has been developing for over four decades.

Plans for the project, dubbed One Island Drive, include an 800-foot tall (244 metre) Mandarin Oriental-branded condo skyscraper with 228 private residences, while the Mandarin Oriental will form part of a 400-foot second tower which will also include 66 private residences and 28 condo/hotel residences.

Swire entered the US market in 1976 through the acquisition of Tampa-based developer Berkeley Hambro Inc.

Note: The article has been amended to reflect updated unit capacity at the Mandarin Oriental towers.