Airport West Miami

Rentable Square Feet: 1,803,676 SF
Time Period: 1991 to 2018
Case Study: Ground Up Development

The Challenge:

Waterford at Blue Lagoon is the premier suburban office park in South Florida. Begun in 1980, the vacant land and 5 existing low rise office buildings were purchased by Nuveen (TIAA) in 1987-1988. The Hogan Group was retained at that time to develop, manage and lease the park. When Nuveen and Hogan built the initial building, 5200 Waterford, it was the first class “A” building to be built in the Airport West submarket. Traditionally, Coral Gables was the home of multinational corporations Latin American Headquarters. These were the types of tenants being targeted at rates in excess of those being achieved at the time in Airport West. The challenge was to introduce a suburban class A office park to a market where none existed. Over the ensuing 30 year period, Nuveen and the Hogan Group developed 11 multi-tenant office buildings and one build to suit office building for Burger King Corporation’s world headquarters.

The Solution:

Stephen Smith and his team Established Waterford as the premier office park in South Florida, achieving rental rates and occupancy well in excess of the market. When the 250,000 sf 5200 Waterford was built on spec in 1990, there were no other class A office buildings in the Airport West market. It was a completely untested product in that market. We were able to achieve stabilized occupancy at rates in excess of pro-forma, within 18 months of opening. Subsequently Nuveen/Hogan constructed 10 additional multitenant office buildings on a speculative basis. Steve and his team were able to lease up the buildings to stabilization at higher rates than were underwritten, with 12 to 18 months of opening. The only exception being 1000 Waterford, which opened in 2009, in the depths of the financial crisis. However, Steve and his team were able to lease the building to stabilization within 12 months and out preform the other two buildings in the market that were completed in the same time frame, in terms of occupancy and rental rates. Additionally, Coral Gables was traditionally the home of Latin American Headquarters. The team was able to shift that to Waterford which became the home to over 100 multinational corporations with their Latin American Headquarters, including, FedEx, Caterpillar, Sony, Olympus, Baxter Healthcare, Johnson & Johnson, Discovery Networks, Marriott Corporation and Diageo.

The Result:

By constructing the best most efficient buildings in the market and creating the most value, Hogan was able the position Waterford as the preeminent Office Park in South Florida. Steve and his team were able to capitalize on the steady influx of new tenants to the market to set up their Latin American Headquarters in Miami. In addition to achieving rates consistently in excess of those achieved at competitive buildings by $1.00 to $3.00/sf, Waterford was also able to maintain occupancy over the years in excess of the market. In fact, from 2014-2018 Steve and his team were able to maintain Waterford at 96% leased and averaged a 90% leased level over a 20-year period. They were also able to consistently achieve a high renewal rate and in 2017, renewed 90% of the leases rolling. To achieve this Hogan was able to sign some of the most significant lease transactions in South Florida; a 50,000 sf lease with Discovery Latin America to establish their Latin American Broadcast Center at 6505 Waterford; a 79,000 sf lease with Nicklaus Children’s Hospital to bring 5301 Waterford back to over 90% leased within 6 months after 3 major tenants vacated; a 150,000 sf lease for a build to suit headquarters with Burger King Corporation (a wholly owned subsidiary of Restaurant Brands International); and an 86,000 sf renewal and expansion with FedEx to maintain 701 Waterford at 100% occupancy.