LTC 225-2018 LISTING BROKER FOR PENNSYLVANIA GARAGE RETAIL SPACECity of Miami Beach, 1700 Convention Center Drive, Miami Beach, Florida 33139, www.miamibeachfl.gov
OFFICE OF THE CITY MANAGER
225-2018 LETTER TO ; OMMISSION
TO: Mayor Dan Gelber and Members of ;!jie City Co
FROM: Jimmy L. Morales, City Manager
DATE: April 25, 2018
SUBJECT: LISTING BROKER FOR PENNSYL '' NIA GARAGE RETAIL SPACE
The purpose of this Letter to Commission (LTC) is to update the Mayor and City Commission regarding
the leasing efforts for the retail space located on the ground floor of the Pennsylvania Garage located at
1661 Pennsylvania Avenue.
BACKGROUND
The Pennsylvania Garage building consists of 572 municipal parking spaces and approximately 7,700
square feet of ground floor retail space. In September 2011, the City executed a new lease agreement
for the retail space with Penn 17, LLC ("Penn 17") for a period of ten (10) years. The City was
represented by Koniver Stern Group who was paid a leasing commission of approximately $303,000 in
conjunction with this transaction. Penn 17 failed to make the required payments and the City terminated
the lease in March 2015. Penn 17 vacated the space in July 2015.
Since that time, the City has utilized the vacant space for various purposes such as EnerGov training,
temporary offices for Code Compliance and Housing & Community Services and as a temporary location
for the Miami Beach Chamber of Commerce Visitor's Welcome Center.
Since Penn 17 had defaulted early in its tenancy, and did not fulfill its obligation to pay the required rent to
the City over the entire ten (10) year term of the lease, Koniver Stern agreed to re -lease the space at no
charge to the City. In this regard, Koniver Stern began marketing the space in March 2017. Over the
past thirteen (13) months, Koniver Stern has received very little interest in the space and has not provided
any serious leasing prospects for the City's consideration.
At this time, I am considering listing the space with CBRE, Inc, with whom the City recently executed a
Professional Services Agreement ("PSA") for Real Estate Brokerage Services. CBRE is a full service real
estate company with international reach. Even though the City will be obligated to pay a leasing
commission to CBRE, estimated between $98,000 and $147,000 (based on the terms of the PSA), I feel
this is necessary to try to identify a tenant(s) for the space and begin collecting rent as soon as possible
as the monthly rental revenue is estimated at approximately $40,000 - $45,000.
JLM/KGB/ES/MMM
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