Properties
Danburg
Management
A Portfolio of Office, Warehouse &
Hospitality Properties
7700 Congress Avenue, Suite
3100
Boca Raton, FL 33487
Tel 561.997.5777 (Boca) 954.974.1236 (Broward Line)
Fax 561.997.9577
E-Mail host@danburg.com
www.danburg.com
NEWS ITEMS - CLICK DATE TO VIEW
April 8, 2001 Boca Raton News - Congress Avenue Red Hot
October 17, 2000 Palm Beach Post I-95 and Congress Turns Into Hub
January 27, 2000 Realty.com - Leasing agents eager to cash in on Internet startup boom struggle to master new language, cope with mortality rate. Danburg Management Featured in Article
May 24, 1999 - Press Release - Silberling Joins Danburg Management
May 20,1999 - Ft. Lauderdale News - Sun Sentinel: Analysts warn developers against overbuilding
May 3, 1999 - South Florida Business Journal - Making A Move
I-95 and Congress Turns Into Hub
By Paul Owers, Palm Beach Post Staff Writer
Tuesday, October 17, 2000
BOCA RATON -- Yet another office complex is planned for the bustling corridor at Interstate 95 and Congress Avenue in northern Boca Raton.
Fort Lauderdale-based Danburg Management Corp. has started building The Preserve at 7700 Congress, a 78,470-square-foot project targeting small and medium-size tenants. The three-building complex is expected to be complete in the spring.
This is the third office project going up at the interchange, which is becoming Boca Raton's next corporate hub.
The National Council on Compensation Insurance is moving workers into a 310,000-square-foot building in the Peninsula Corporate Center next month, and IBM is putting up a 168,000-square-foot building across Congress Avenue from NCCI.
Additionally, Peninsula is approved for another 350,000 square feet of space, and Coral Gables-based Codina Group, which is building IBM's site, is planning about 300,000 square feet of additional space nearby.
"That area's been green for a long time," said Joe Good, a broker with Lancore Realty in Boca Raton. "But the location has matured for companies that have a regional business, because it's right on the interchange."
With Boca Raton's office vacancy rate in the single digits, the corridor is the next area for growth, real estate experts say.
"We're finding tenants starting to look there for their needs," said Bob Schneiderman, a broker with NAI Merin Hunter Codman in Boca Raton. "Most people want to be around Glades Road and I-95, but they're forced to look outside of that . . . to find space."
The Preserve, within the Boca Commerce Center, will go up "on spec," meaning before tenants are lined up. It will feature fiber-optic cables and hurricane-resistant impact glass. Rental rates range from $18 to $20 a square foot, not including expenses.
Danburg is building 600- and 1,000-square-foot suites featuring two offices, reception and open areas, as well as a kitchenette and restroom. The suites start at $1,000 a month.
"We have developed a niche in catering to small and medium-size tenants and believe that we can provide attractive pricing without sacrificing quality," said Ken Silberling, Danburg's acquisitions and leasing vice president.
Danburg owns and operates five office and industrial projects in South Florida totaling more than 300,000 square feet. It also owns and manages the River Inn Hotel in Fort Lauderdale.
paul_owers@pbpost.com
Published in Broward Daily Business Review on: Thursday, January 27, 2000
Leasing agents eager to cash in on Internet startup boom struggle to master new language, cope with mortality rate
Susan Salisbury
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Real estate brokers who don’t know their “zero loops” from their “backbones” could be left out of South Florida’s hottest growth industry — Internet-related companies.
But while the dot-coms may bring big office leases and custom construction jobs, brokers and landlords are struggling to deal with an industry where the death rate is high. Only an estimated two out of 10 high-tech startups survive.
The three biggest lease deals in South Florida in the past month have been to companies with Internet ties — Qtera Corp. leased an additional 50,000 square feet in Boca Raton, Mortgage.com leased 112,000 square feet in Sunrise, and eSpire took 60,000 square feet in Fort Lauderdale.
“The biggest trend driving the market is the dot-coms, particularly in Broward,” said Ken Silberling, vice president of acquisitions and leasing at Danburg Management Corp. in Fort Lauderdale. Real estate players, he says, now also have to learn their Internet lessons. “Brokers have to have a fundamental understanding of the technology to have a feel for whether the business is commercially viable.”
Along the way, brokers are learning tech talk. Dot-coms want, for instance, to be in the zero loop (the closest connection to the Internet) so they can ride the backbone (fiber-optic cable) to the cloud (Internet).
Silberling said he receives an average of three calls a week from Internet startups in Boca Raton alone. The challenge those customers pose are not only their shaky finances, but their fast-changing needs. Typically, they’ll say they need 1,000 square feet now and plan to expand to 20,000 within a year.
To bridge the financial gap, the involvement of brokers and landlords sometimes goes way beyond signing a lease and getting a check. While this isn’t common in South Florida, in other states, such as Arizona, Texas and California, some startups are leasing space in exchange for stock in their companies. Danburg Management expects to get into such a deal with its tenant Total Management Solutions in the Cypress Creek section of Fort Lauderdale, which is now paying rent the usual way, when the company goes public in June.
Wally Catton, Total Management’s founder and president, said he did an all-stock deal when he leased space in Arizona for a related company. “Here in South Florida, which is notorious for con artists, people are apprehensive,” he said.
Many landlords who want to be on the safe side are asking for six months’ rent as a deposit from a startup, and then want them to begin paying rent each month, brokers say. But some brokers say dot-coms don’t receive treatment different from that given new law firms or medical practices, which also tend to break up frequently.
“It’s not a proven industry,” said George Sacks, vice president of Grubb & Ellis, Boca Raton. “The landlord may get large security deposits or letters of credit. That covers the downtime if it doesn’t work out. The tenant pays for its own build-out.”
“The reason it’s an issue today is that we’re seeing developers and brokers who have not had experience with new companies,” said Ben DeVries, president of Ben DeVries Real Estate Counselors in Palm Beach Gardens. “A lot of people who never would have opened their own businesses are thinking about it.
“You don’t know if they’re in for 10 years. Internet time is super fast. The whole world changes in two years. Anybody on the cutting edge quickly becomes the bleeding edge if they’re not fleet of foot.”
In an effort to capture the emerging market, DeVries leased space in a former medical building at 3801 PGA Blvd. in Palm Beach Gardens, and is subleasing to startups in a program called Gateway Executive Quarters. There, they share a kitchen, conference rooms, telecommunications lines and computer servers that were installed to draw them, DeVries said. The joint venture with AMA Land Ventures, the building’s owner, plans to lease space to the firms on a month-to-month basis when they’re small and capture them as separate tenants when they outgrow their space.
For Ecom.eCom.com, a publicly traded Internet company that specializes in placing new and small businesses on the Internet, leasing at Gateway Executive has meant being able to expand twice in the past five months without having to move. It also has meant having a prestigious address and access to services, such as a receptionist and a high-speed, direct connection to the Internet, said David Panaia, co-founder and chief executive.
Despite edginess over some of the deals with Internet startups, many brokers say they cannot think of a case where a landlord has been burned by a dot-com. That’s because many companies start out in someone’s house, apartment or garage, and don’t lease space until they’re financially viable.
Todd Andros, president of Tevix.com, a 5-year-old company in Miami that rents its software on the Internet, is one example.
“We did everything out of my home in Miami for a couple of years,” Andros said. “A friend of mine was building a building and rented us space. We used to be in one room. Now we’re in a couple thousand square feet. We’ve grown from four employees to 25 in the last two years.”
Bernhard Schutte, chief operating officer of Digital Media Network Inc. in Fort Lauderdale, said his e-commerce consulting firm, founded in 1996, had a track record before it began leasing office space eight months ago. Still, he can understand landlords’ fear of e-businesses.
“There are so many Internet startups, and hundreds fail within three to six months. It gives a bad name to the industry,” Schutte said.
Of course, those startups that are further along are attractive clients. Steve Caster, senior vice president of America’s Capital Partners in Miami, said his company handled the lease to Mortgage.com and is doing a build-to-suit for Fort Lauderdale’s SportsLine.com. Both are publicly traded and had factors that made them attractive — such as cash reserves.
“Whether it’s a dot-com or not, if it’s a publicly traded company, it has a significant cash position. In general, most Internet companies are losing a lot of money. Therefore, you look at a company that is losing money with a lot more scrutiny,” Caster said.
But all the evaluations in the world still can’t foretell a company’s future. And some think landlords are presumptuous to try it.
Tim Page, director of operations for Stiles Corp. in Palm Beach County negotiated an $8 million, 10-year lease to Qtera, a fiber-optic technology firm being bought by Nortel Networks. “It’s hard for those of us in real estate to understand the true value of what the dot-com companies are doing. In Qtera’s case, the fact Nortel thought they were worth $3.25 billion helped us see the light.”
Published in Daily Business Review on: Thursday, January 27, 2000
For Immediate Release
May 24, 1999
Contact: Ken Silberling
954.974.1236 x 27
Silberling Joins Danburg Management Corporation
Kenneth Silberling has joined Danburg Management Corporation as Vice President of Acquisitions and Leasing. The Fort Lauderdale-based real estate investment firm owns and manages a portfolio of office, industrial and hospitality properties in Broward and Palm Beach Counties. Since 1986, Silberling has been among the most frequently quoted experts on the South Florida commercial real estate market. His previous positions included Director of Research at Cushman and Wakefield in Miami and at Colliers Lehrer International in Fort Lauderdale. In 1995, he helped to start Commercial Florida Realty Partners, where he specialized in research and investment sales. Commercial Florida was later acquired by Grubb & Ellis. Silberling holds a Masters in Business Administration from Georgetown University.
Reprinted from Fort Lauderdale News/Sun Sentinel May 20, 1999
Analysts warn developers against overbuilding
By ANTONIO FINS Business Writer
Web-posted: 6:58 p.m. May 19, 1999
A trio of analysts gave bullish South Florida commercial developers reason for caution on Thursday.
Speaking before a gathering of the South Florida chapter of the National Association of Office and Industrial Properties, real estate analysts examining trends in Broward, Palm Beach and Miami-Dade counties acknowledged that the office market remains strong.
But they said signs of weakness are visible and warned the danger of overbuilding exists in healthy areas and segments.
"We're at a point in the market right now where we need to be very careful," said Robert Love of American Realty Consultants. "It's not a red light, but it's a yellow light."
Love pointed out that the downtown Fort Lauderdale office market remains robust with occupancy rates of 95 percent. He also pointed out that corporate relocations and expansions continue to fuel demand for office space in Plantation and western Broward along the I-75 corridor.
However, Love cautioned that the amount of space on design boards and under construction could outstrip demand in the foreseeable future.
Ken Silberling, Vice President for Acquisitions at Danburg Management, said oversupply is hurting the Boca Ration office segment.
He points out that Class A office spaces in Boca Raton are struggling to fill voids, while less expensive office space is filling at a faster pace.
"What I'm seeing is stronger demand for the more affordable space," he said. "The Class A is going to fill up but it's just going to take a little longer."
In Miami-Dade, Tom Blazejack of Balzejack & Company said there are positive trends, especially in suburban markets such as Miami Lakes and Kendall.
But he worries that cutbacks in personnel at large employers like Ryder Systems or a move out of the county by Burger King could hurt that market.
Commercial Real Estate
Grubb & Ellis' well-known analyst Ken Silberling, a frequently quoted media source, is leaving his post of four years to take a top job with Danburg Management of Fort Lauderdale. Silberling, who will be the vice president of acquisitions and leasing for the small commercial real estate investment firm, starts Monday.