The Florida attorney general’s office has renewed its downtown Fort Lauderdale lease for 10 years instead of the usual two.
The state agency extended its lease April 2 for the same space, 42,027 square feet in the 110 Tower at 110 SE Sixth St., at $18.8 million over the decade. It occupies the entire ninth, 10th and 11th floors and a portion of the eight floor.
The deal, which works out to $44.73 per square foot, was reached even though the state previously agreed to two-year lease extensions.
The Colliers International team that represented the landlord negotiated tenant upgrades in exchange for the longer deal. The landlord agreed to pay for office improvements.
“It’s not uncommon that government agencies want shorter terms with a lot of renewal options to maintain flexibility,” said Jonathan Kingsley, who was part of the Colliers team that negotiated the lease.
Kingsley, who is office services executive managing director, worked with office services senior director Jarred Goodstein and managing director Stephen Rutchik to represent landlord IP Capital Partners LLC. Kingsley and Goodstein are based in Fort Lauderdale and Rutchik in Miami.
Short-term government leases coupled with options to end a lease with a six-months’ notice create risk for landlords, Kingsley noted.
IP Capital, a Boca Raton-based private real estate investment and asset management company, will pay for tenant improvements of $30 per square foot, although this might change as they determine what work needs to be done.
“It’s more for updating the security infrastructure in the facility,” Goodstein said.
The deal is a win for three parties: the landlord, the attorney general and taxpayers, Kingsley said.
“It created a benefit both for the landlord to retain the government agency as a long-term tenant,” he said. “The benefit to the government agency and to the taxpayers was that the agency was able to achieve all of its tenant improvement requirements without paying out of pocket.”