Loose lips at happy hour nearly killed a multimillion-dollar deal for a retail lease in Miami’s Brickell financial district, a broker involved in the transaction told the Daily Business Review.
Carol Ellis-Cutler, a senior vice president and partner at the Coral Gables office of broker Colliers International helped seal a deal this month for a lease in the Colonnade Plaza at 1201 Brickell Ave.
The transaction means drugstore chain CVS will open in the building’s high-profile Brickell frontage. Gordon Biersch Brewery, a midmarket eatery known for dishing out pub fare to happy hour crowds, occupied the space until it closed earlier this month.
But that deal almost fell through months before after someone privy to the planned lease transfer made the information public, setting off a bidding war that threw the delicately structured deal into a spin. Ellis-Cutler said she believes people in a Miami-Dade County office that handles building permits were responsible for the leak.
“There was this whole exposure and vulnerability and information that we wouldn’t have wanted out that was part of it,” Ellis-Cutler said. “It was a very complex transaction.”
Ellis-Cutler said the CVS deal started more than 2½ years ago when the drugstore chain began looking for a location in the Brickell neighborhood. Through a contact at Florida East Coast Realty LLC, which owns 1201 Brickell, Ellis-Cutler learned the landlord would be willing to replace the restaurant with a new tenant. This required an “outside-the-box approach,” she said.
The long-term retail lease Gordon Biersch signed in 2000 had no provisions for a sublease but came with an option to renew the lease.
Ellis-Cutler initially began working with Florida East Coast and CVS to execute a lease transfer. Last year, however, after CVS filed building permit requests in anticipation of a successful transaction, someone tipped off employees at Gordon Biersch that the restaurant was about to be replaced with a drugstore.
The nearest CVS stores are in downtown Miami and 227 SW Eighth St. in the Brickell area. A competing Walgreens is in the Brickell neighborhood at 200 SW 13th St.
Ellis-Cutler said she believed government permit employees told “friends who work at the restaurant” about the deal.
A call to the city for comment was not immediately returned.
Ellis-Cutler said: “People then learned that the space might be available, and we had all these different parties trying to disrupt our deal. Once it was exposed to the market, the pressure of outside demand played a role.”
“The deal died a couple of times,” she added. “It only happened because of the cooperative nature of everyone involved, which is a rarity in this field of dealmaking.”
Also helping seal the deal: Gordon Biersch, a division of Big River Restaurants, was given what Ellis-Cutler described as a “modest buyout that nonetheless added to the complexity” of the transaction.
Although she declined to comment on the final cost of the transfer, a news release announcing the lease transfer cited statistics from Miami’s Downtown Development Authority, which peg retail rents in Brickell “in the high $70s per square foot.” The retail space at 1201 Brickell is just over 10,000 square feet, Ellis-Cutler said. An annual lease at $70 per square foot would run $700,000.
Ellis-Cutler, a commercial real estate broker for 22 years, said the CVS deal was “special” and allowed all parties involved to walk away satisfied.
All parties, that is, except for the newly unemployed Gordon Biersch workers. Asked about their fate, a company representative said some team members were offered jobs at other restaurants outside the state and some were given severance pay.