Market Research & Valuation of a Commercial Property
Project Overview
Overview
The Southeast Financial Center (SFC) is situated in downtown Miami with the view of Biscayne Bay, meanwhile, the SFC is a 55 story building which was architectured by Skidmore, Owings & Merrill and the construction of the building was completed in the year 1984 and have a rentable space of 1,158,102 square feet. Out of the total available space 1,227,000 square feet has been used for letting to offices, 21,000 square feet for letting to support facilities and the remaining space has been dedicated for letting to retail businesses and these rentable space of SFC has been classified as an A class renting facility. SFC consists of two integrated buildings connected through a covered walkaway elevate, where the other part of the building is a 15 floor annexbuilding and the two integrated building covers a land area of 2.41 acres.
However, out of the total area of 15 story annex building, 43,000/, 21,071/ and 11,228/ square feet of the area has been dedicated for banking hall, health club and service retails respectively. In addition to this, 12 floors of the annex building with 1,121 square feet has been used for car parking and the SFC’s central plant has also been installed within this area. Additionally, 30,000 square feet of outer area are covered by the palm trees which gives the property better outer look. Further, the construction structure of the building is such that each floor offers 16 locations for corner offices. However, the major tenants of SFC include Wells Fargo, Goldman Sachs & Company and Prudential Bache Securities and the building had been the tallest building of Miami up till 2003 and is still recognized as the tallest building in Florida City.
Important Factors for Understanding of the Property
Prime Location
From Miami City, in terms of population, is the largest city in South Florida, meanwhile, South Florida is the largest metropolitan area of the Southeastern United States. Additionally, the Miami city is known for being an international financial center, which is why the Miami city is known as the gateway to the America. Meanwhile, the Miami City is also the center of the high volume of cargo services in America. Therefore, due to the high importance and being a business center with high population, Miami City requires more of the office building space that will support the business activities in the Miami city. Hence, the SFC existence in the prime location of Miami city makes it valuable and increase its market value due to its geographical location.
Class “A” Office Space
Additionally, the SFC building is ranked as class “A” renting facility which means that the building has attractive location which is easily accessible. In addition to this, the A class of the SFC office space is shown that the rents charged for the office space are competitive and the property has been managed in a professional way.
Life of the Property
Further, the SFC building was constructed in 1984 which means that the property is around three decades old, hence, the old structure and continuous commercial use of the property have depreciated the building. Further, due to the fact that the building was constructed three decades ago, it requires higher maintenance cost in order to maintain the building in its current position.
Parking Facility
Moreover, the parking facility provided by the SFC annex building consist of 12 floors with, which also increases the attractiveness of the building for letting to the offices because it will provide the tenants with ease of parking their vehicles in an in-house facility.
The Real Estate Market Analysis
Demand Forces
The real estate market is affected by the local environment that governs the regulations and policies of the real estate market, meanwhile, the real estate market is also affected by the demand supply forces relating to the office building facilities.
Level of Business Activity
The basic force that affects the demand of office building space in a particular area is the level of activity in that area. Since, Southeast Financial Center’s major space is for the offices and the occupancy rate for its office space is directly dependent on the business activities taking place in Miami or South Florida. Further, the Miami city has been regarded as the international center for the financial center, which brings entrepreneurs and the other corporate profession into Miami, from different countries. Meanwhile, other corporate sectors with the intention to increase their business relations with other international community will also open their branches within the Miami city for easy access to the international business community which will in turn increase the demand of rentable offices in Miami city...............
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