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The new owners of CocoWalk have a plan, and it’s not all about shopping

Mar. 2, 2017

After nearly 30 years without any new office buildings in Coconut Grove, the area is now slated to get two new projects as part of the neighborhood’s revitalization.

The team behind the redevelopment of CocoWalk, a dining and entertainment complex in the center of the Grove’s commercial area, plans to build 73,000 square feet of Class A office space on the property’s east side. The complex is located at the intersection of Main Highway, McFarlane Road and Grand Avenue.

The new five-story building will have retail on the first floor and office space on the remaining four stories. It will include about 250 parking spaces underground and a rooftop entertainment terrace.

Construction of the office building, One CocoWalk, is slated to begin in early 2018, with completion in mid-2019.

Federal Realty Investment Trust, Grass River Property and the Comras Company purchased CocoWalk in 2015.

The addition of the office tower “puts people on the streets populating the restaurants and retail during the day, often when there are less people in the Grove,” Grass River Property Principal Tom Roth told the Miami Herald. Blanca Commercial Real Estate will broker space.

Another developer, David Martin’s Terra firm, is transforming a city of Miami parking garage at 2850 Oak Ave. into a five-story building with 75,000 square feet of Class A office space and renovated ground-level retail. His firm is partnering with Mayfair Real Estate Advisors.

The last major new office tower built in the Grove was the SBS Tower in 1989.

Matthew Cheezem, managing director at commercial real estate firm JLL, said that the area can sustain both projects — which total about 140,000 square feet — because the Grove has such a low vacancy rate, far lower than other areas in the county.

“Although we are talking about a 10 to 15 percent increase in inventory for Coconut Grove if this was in Coral Gables or Brickell, 140,000 square feet isn’t even a fraction of one building,” he said.

He said the Grove’s overall office-space vacancy rate stands at 6.2 percent, but it is around 3 percent for Class A buildings.

The two new projects in the Grove will ultimately compete against each other, but the Terra building is expected to be completed about a year earlier than the Federal one, Cheezem said.

“They will go head to head — there should be pressure on pricing,” he said.

The project by Federal will likely tout that the building will be in the mix of it right at CocoWalk, while the Terra project might promote the fact that it isn’t at Main and Grand amid all the congestion, he said.

“Each of them has unique selling points,” he said.

During the past several years, Coconut Grove faded as other areas in Miami-Dade — including South Beach and Brickell — have blossomed. But developers have shown renewed interest in the Grove in the past decade because of its proximity to downtown and colorful history. Development plans have also generated conflict about concerns over parking as developers snatch up properties in West Grove’s African-American neighborhoods.

Amy Sherman

Read more at http://www.miamiherald.com.