Probably another win for Baymeadows since the only two places offering that amount of square footage within their 5-mile radius are Freedom Commerce Center and Cypress Point (where they're already at).
QuoteOffice space in Downtown Jacksonville is not in the running for the Citizens Property Insurance expansion, t he largest office deal to circle the city in years.
Citizens issued its invitation to negotiate Thursday afternoon, which spells out exactly what it's looking for. That would be to lease about 226,400 square feet of "existing Class A or B office space preferably in a single building or buildings in an adjacent complex/campus setting. Boundary requirement is an approximate five-mile radius from current leased office space at 7215 Financial Way."
full article: http://www.bizjournals.com/jacksonville/news/2014/05/08/downtown-jacksonville-officially-out-of-the.html
Oh well, at least Baymeadows is becoming dense enough that it could become its own little city. Make it walkable, and it can be a small stand alone metro :-)
Too bad....typical but too bad.
No Lumb No Love No LumbLove Jacksonville needs to Aim High
With this company it is more a reflection of the company and not what they may or may not think of downtown. Downtown was never going to happen with them. Since they are a quasi government org and actually assess property insurance policies throughout the state in the event they would not have the funds to pay for a major hurricane they watch their money spent very closely on space. They would have to answer questions to the policyholders of Florida why do I pay assessments while you have a shiny office downtown. Could it be cheaper downtown? Possibly but they have to deal with perception. Also when they moved to their primary current location they had a requirement that it would have to be 2 stories or less. Their reasoning was they felt a higher rise building could be more susceptible to wind damage from a tropical storm/hurricane and thus potentially have to close during a catastrophic wind event in the state. And being the primary hurricane insurer in the state they did not want to take that risk.
Back office mentality belongs in hells like Baymeadows.
Or perhaps sometime there are real reasons and not just rants.
Quote from: edjax on May 09, 2014, 03:44:17 PM
Or perhaps sometime there are real reasons and not just rants.
+1.
Baymeadows needs love too. There's a ton of empty office space that can be filled in places like Freedom Commerce Center.
It comes down to Money. Citizens already has offices at JTB and 95, so why try and move everything into downtown, a place where "lots of stuff has been announced, but not quite finished", and there is established bus routes and buildings in place in Freedom Commerce, with lots of empty space as Lake alluded to, so it really comes down to money. Costs are less in Baymeadows, and the area is ready to go based on this vendor's needs.
Quote from: edjax on May 09, 2014, 03:44:17 PM
Or perhaps sometime there are real reasons and not just rants.
Amen!!! That applies to like 60 percent of the threads/thread revivals on MJ. The Whole Foods 'non-story' being the latest.
EverBank Center still wants to bid for Citizens:
QuoteBy Karen Brune Mathis, Managing Editor
EverBank Center's representative said today the owners will bid to bring Citizens Property Insurance Corp. to the Downtown tower if they can.
Citizens Property, which is a government corporation that provides insurance protection to Florida property owners, wants to consolidate and expand offices in Jacksonville into about 226,400 square feet of office space.
"We will definitely bid if they amend the boundaries to include Downtown Northbank," said El Ad Florida LLC representative Pamela Smith, who participated Thursday in a Citizens Property pre-bid conference about the Invitation to Negotiate.
Smith asked about the company's requirement that the office space be within a 5-mile radius of a Citizens Property office at 7215 Financial Way in Southside.
"We are not five miles," Smith said at the 1 p.m. session. "We are eight miles and my question is how approximate is that? Can we submit a bid?"
Citizens Property Procurement Officer Patty Davis responded that Smith's property was outside the boundaries but encouraged her to send the question in writing so it can be considered.
full article: http://www.jaxdailyrecord.com/showstory.php?Story_id=542943
Interesting. You'd think Citizens' guidelines were very deliberate.
When you're desperate, you have to get a little aggressive, make them notice you and when they do, make an offer they can't refuse.
Good for them for being aggressive, sometimes that how things get done.
Downtown is back in the mix:
QuoteDowntown is in play for the large Citizens Property Insurance Corp. office consolidation that could bring more than 1,000 jobs to the urban core.
Citizens Property has extended the boundaries for the site search, which had been limited to a 5-mile radius from its Baymeadows area offices.
The boundary requirement is listed now as an 8-mile radius from Interstate 95 and Butler Boulevard.
The company posted on its website Wednesday that it had amended the requirements. Because of that, Downtown building landlords can compete for the deal.
Two weeks ago, EverBank Center's representative said during a pre-bid conference the owners would bid to bring Citizens Property to the Downtown tower if the boundaries were extended.
Citizens Property, which is a state government corporation that provides insurance protection to Florida property owners, wants to consolidate and expand offices in Jacksonville into about 226,400 square feet of office space.
"We will definitely bid if they amend the boundaries to include Downtown Northbank," said El Ad Florida LLC representative Pamela Smith, who participated in a Citizens Property pre-bid conference May 15 about the Invitation to Negotiate.
She raised the question about the company's requirement that the office space be within a 5-mile radius of a Citizens Property office at 7215 Financial Way in Southside. "We are eight miles," she said. "Can we submit a bid?"
Citizens Property Procurement Officer Patty Davis responded that Smith's property was outside the boundaries but encouraged her to send the question in writing so it could be considered.
The response posted Wednesday amended the boundaries to include Downtown.
http://www.jaxdailyrecord.com/showstory.php?Story_id=543050
Downtown is centrally located at the intersection of 1-95 & I-10 with plenty of office space available. Secured high-rise concrete parking garages are much safer for employees during storms than massive suburban offices complexes with exposed cars and wafe-like trees.
Traffic around Baymeadows is horrific and will stress out employees on a constant and daily basis.
Quote from: BoldBoyOfTheSouth on May 29, 2014, 01:56:25 PM
Downtown is centrally located at the intersection of 1-95 & I-10 with plenty of office space available. Secured high-rise concrete parking garages are much safer for employees during storms than massive suburban offices complexes with exposed cars and wafe-like trees.
Traffic around Baymeadows is horrific and will stress out employees on a constant and daily basis.
+100%. This would be so good for the core. I sincerely hope they can arrange a deal. Something to celebrate.
My two locations in the suburbs, one on Roosevelt Blvd, and our warehouse on Forest Street, have power outages once every two months or so, each lasting from two minutes to an hour or so. This is very disruptive and costly when its busy, when we have several dozen customers trying to browse and purchase books. When power goes, our phone system, cash registers, and computers go down, along with the lights.
My point is that the reliability of electrical power in the core is a plus. I cannot recall having had a single power outage at our downtown location, and we've been in the core since 2006.
I'm not sure as to why there is increased reliability of power in the core, as compared to the outlying areas. Perhaps its simply the fact that there is a secure power substation near the core, and as one is distanced from this power source, one is at the mercy of transformers that can blow and be hit by vehicles or trees etc.
In any case, if one is compiling a list of persuasive points to offer any company entertaining the idea of moving to the core, this "power reliability" would be a big plus. Of course, some of these downtown towers like Everbank might have their own power backups in the form of generators and battery banks.
Oh that's easy Ron, it's the buried power lines there vs the poles where the lines get knocked out by a strong gust of wind.
Quote from: ChriswUfGator on May 30, 2014, 06:44:04 AM
Oh that's easy Ron, it's the buried power lines there vs the poles where the lines get knocked out by a strong gust of wind.
Makes sense Chris .... And even more sense now that I have my morning espresso :)
You will also have much faster responce times from JEA to any issue in the core due to the density of costumers.
Good for the EverBank Center folks for being aggressive. This would be a huge win for them. The EverBank deal kind of got cancelled out when AT&T pulled out of the building. This would be a huge win.
Per article on JBJ, 4 bids were received and the one for Everbank Center came in as the second lowest. So most likely will be between there and the lowest bid in the Baymeadows area (Deerwood Center). These two were substantially lower than the other two. I would think if downtown there would also have to be some parking incentives perhaps from the city similar to what they just did for the DuPont Center.
I'm surprised The Oaks on the Arlington Expressway came in so high. Isn't that place completely empty?
http://www.bizjournals.com/jacksonville/news/2014/06/25/see-how-much-four-jacksonville-landlords-bid-for.html
I think this is very bad reporting. I [obviously] work in this industry and read a lot of articles and I have never heard anything worded like it is in the JBJ.
"Bid?"
What do they mean by that? Is that what it would cost for a 5 or 10 year lease deal? I'm guessing with 130 employees and a tad room for expansion they have a commitment out in the market for 40-55,000 SF? Since basically all of Jax is around ~$16-22psf rent, for a 10 year term at the low end you're talking $7MM in rent for a start rate of $16psf FSG for 40,000 SF to $14MM for a start rent of $22psf FSG for 55,000 SF.
Now, I backed into the SF they may be looking for if 2 landlords are "bidding" $30MM for a 10 year lease deal with Citizens. At a start rate of $20psf FSG and 3% bumps, Citizens would need 130,000 SF, or roughly 1,000 SF per employee, which is just ridiculous (I've only seen that with tech startups that triple in size per year and never go for 10 year terms and always ask for termination clauses or ROFOs on additional space).
Anyway, regardless, I'm a real estate whiz and I have no fucking clue what this lady is talking about when she says 4 landlords "bid" between $30MM and $60MM for Citizens Bank to lease space and relo 130 employees from Tally and Tampa. Those numbers don't make any sense for anything I can conjure up in my mind.
When Jacksonville's marquee office tower just traded for $79MM, "bidding" $60MM for a standard lease deal makes about as much sense as, well, basically nothing. Shameful reporting (as is usual for JBJ's real estate pieces)
edit: 226,000 commitment. For 130 employees???? What's their growth trajectory! LoL I mean sometimes with tech that happens, but Citizens Bank?
Also, at the low end these LLs want $133psf for that kind of commitment (now I'm assuming they're talking sale). If that is basically a record for Jax, why does a LL in Arlington think they can get Midtown Atlanta Class A pricing for a shit Arlington building?
This is all just ODD.
I believe they are moving 130 from other cities to join employees already in Jax.
Citizens Property Insurance Corp. plans to move 148 IT jobs to Jacksonville next year. The company now has close to 900 employees spread among four locations in Jacksonville.
But it plans to consolidate those, along with 130 positions from Tallahassee and 18 from Tampa into one office complex here.
Read more at Jacksonville.com: http://jacksonville.com/business/2014-04-25/story/148-jobs-moving-jacksonville-citizens-property-insurance-have-1000-plus#ixzz35g3h4tv4
Hmmm. Bad reporting or bad reading comprehension? ;D
I wouldn't say bad reading comprehension considering I have no problem reading and interpreting dozens of other real estate articles a day as part of for subscription private equity journals dealing with rather complex issues. We've established their employment numbers, plans, and space commitment/RFP, much more effectively from the FTU/Jacksonville.com article than the JBJ article, I might add.
Now edjax, please decipher this:
QuoteBids for the 226,000-square-foot need were opened yesterday, and the landlords of four Jacksonville office properties bid the following:
8800 Baymeadows Way West, Deerwood Center: $31.66 million
301 W. Bay St., EverBank Center: $34.95 million
8900 Freedom Commerce Pkwy, Prominence: $58.63 million
7960 Arlington Expressway, The Oaks: $62.97 million
Source (http://www.bizjournals.com/jacksonville/news/2014/06/25/see-how-much-four-jacksonville-landlords-bid-for.html)
In lieu of this:
QuoteA New York buyer has acquired the Wells Fargo Center and its parking garage for $79 million.
Source (http://www.bizjournals.com/jacksonville/news/2014/06/24/wells-fargo-center-in-downtown-jacksonville-sold.html)
Please tell me what in the hell this author of this article in JBJ is referring to when she says an Arlington LL bid $63MM for a 226,000 SF commitment from a technical non-profit (FTU frames Citizen as a GSE). Please, honestly, I invite you to make me look like an idiot. I'm trying to really dig deep to decipher what it is I'm missing here.
They placed an Invitation to Bid on their website outlining the specifics such as square feet needed, parking spaces needed and,for a set period of time. These companies responded that this would be the total cost for said request. They bid everything out such as hotel lodging for employees to use while on business trips,etc.
Well, I found the latest:
https://www.citizensfla.com/pcm/attachments/338/ITN%2014-0001_Addendum%202.pdf
I can't really see anything out of the ordinary with this RFP, except that they require 12' ceilings with little flexibility (Ceilings in these buildings are probably 9-10' with drop and 12-14' slab to slab). There would obviously be some landlord work required to appropriately stack IT/server rooms, but pretty standard/minimal.
Still, let's talk numbers. Citizens wants 226,400
USF, which depending on a building's load factor could be a lot less than "RSF". Let's just throw this out there, in typical terms they want about 250,000 SF, and load factors would be minimal since they are taking entire floorplates and perhaps some buildings have side cores.
There's 1 strike against JBJ reporting.
Citizens wants parking. Ok, well in Jax that is basically at no cost. With or without Citizens, LLs in Jax are already paying out of their own pocket for asphalt repair and resurfacing, parking lot lights, etc etc. So nothing different or fancy about that request. A DT LL would come out of pocket on supplying parking, but I've already looked at that before on this website. Jax parking averages $90 a space DT, so assuming no public transit (as Citizens has done), and 1 space per employee, a DT LL is paying about $12MM over a 10 year term for parking.
So let's take that out of Everbank Center's bid, and assume that the remainder, $22MM, is for all other deal terms, with a large component of that to stack servers (i.e. LLW that seems to be able to be amortized into rent). It becomes a mystery to me more and more why the Arlington/suburban properties are so much more expensive, almost to the point of equaling the entire sale price for Wells Fargo Tower, which is 4x the size with far greater complexities (granted as low as rent is at WF, the NOI after those tower opex must be quite lowww).
Here are some relevant quotes:
Quoteb. What is the rent today that Citizen pays per sf?
Answer: The rental rate varies at all four office buildings in Jacksonville. This is attributed to the
different lease types in Jacksonville. The base rental rate is:
Cypress Point (Net Net Lease) $14.80
Cypress Plaza (Triple Net Lease) $ 9.50
Corporate Center (Triple Net Lease) $12.25
C & I Nations Way (Modified Gross Lease) $14.75
c. What is the usable Square Feet that Citizen have today.
Answer: We currently lease 211,288 sf in Jacksonville; however, it should be noted that some of
our existing leases do not reflect the measurements in USF.
22. Amortization: Over what term are build-out expenses to be amortized?
Answer: Build-out expenses should be amortized over the initial term of the lease, which is
anticipated to be ten years.
So we've established term, no options, contraction/termination rights, ROFOs, or ROFRs. Bidding becomes more and more fuzzy/challenging when presented in absolute $ amt, as it is by the JBJ.
It looks like Citizens requires the LL to pay for basic infrastructure installations as part of a turn-key delivery (which they hint can be amortized over term as part of rent...all part of the packages, but explained by JBJ in a very fuzzy and non-intelligent way). This is very standard. In fact, I can even tell you the costs to provided cable service monthly, at least in LA. It's not much, and neither is the installation, really, and I suspect at least one of these buildings is already set up.
QuoteWill Citizens consider reducing the commission structure, which is currently expected to exceed two
million dollars and allow the savings be passed on to Citizens in direct rent savings?
Answer: Citizens is working utilizing a brokerage contract procured by the Department of
Managemen
This is certainly not out of the norm. I think they are assuming a $17-18 effective FSG start rent and a 6%/3% structure, though I don't know which leasing commission structure is market for Jax office/Jax C&W. Any LL would pay this as part of a lease deal.
QuoteThe Lease requires a modified gross rental to include base rent, real estate taxes, property
insurance, common area maintenance and Landlord provided repairs and maintenance. It is
impractical to predict costs for the next ten years. Would Citizens consider a Base Year structure
whereby actual costs or savings are passed on to Citizens or should the landlord arbitrarily build in
those costs that may not be applicable for a number of years thus increasing Citizens' .
Wow. This is not normal, at all. A FSG start rent is based on the assumption that pass throughs are included, which is why Jax rents are scary low, since pass throughs are easily 50% of a market fixed rent. The LL here is screwed at reassessment. Also screwed if insurance premiums dramatically rise in a state like FL (imagine that). Flood insurance could be an issue, as well. So perhaps LLs are factoring in additional rises in pass throughs as part of their costs, presented as $ amounts. This would be counterintuitive to "lowest bid wins", essentially.
JBJ, a million strikes against them for presenting "bids" in dollar amounts. That means nothing here, when it comes to "good" vs "bad" as related to pass throughs above.
Found the original
https://www.citizensfla.com/pcm/attachments/338/301%20-%20Jacksonville%20Office%20Space%20%20ITN%2014-0001.pdf
Contraction rights, not too serious though (pretty standard for a 10 year lease term of this size):
QuoteDownsize Option: The Lessee shall have the right to downsize, without penalty, up to
15% of the total leased space upon giving six (6) months advance written notice to the
Lessor. The reduction shall be promptly evidenced through a Lease amendment.
The downsize option is limited to a one (1) time downsize of up to 15% of the initially
leased premises area which may be exercised anytime after the first five (5) years of the
initial lease term. Citizens would be responsible for the demising costs under this
provision. The downsize option is subject to the reimbursement addendum in the same
manner as the Option to Terminate provision. Citizens is obligated to reimburse Lessor
for prorated unamortized tenant improvements associated any space reduction /
downsize option exercised. Commissions are not covered as part of the reimbursement
addendum.
Citizens and the Landlord will work together to determine the location of the reduced
space if this option is exercised.
And here is the pricing worksheet:
QuotePricing: The following formula will be used to evaluate Price. The lowest proposed
Vendor price (Original Base Term) over the potential term of the contract will be awarded
30 points and henceforth be known as Lowest Total Cost (LTC). The remaining Vendor
proposals will be scored using the following methodology: LTC divided by the Proposed
Cost (PC) multiplied by the maximum points of 30 will equal the points awarded.
Formula: LTC/PC x 30 = Pricing Score
TAB
NO. Phase 1A - Evaluation of Written Proposals Maximum
Points
1 Responsive Requirements and Submission of All
Required Forms and Documents Pass / Fail
2 Price 30
3 Proposed Building / Location (Maximum Points: 35)
Attachment C 10
Building Details 5
Control of Property 3
Interior / Space Planning 10
Schedule 5
Access / Security and Camera Systems 2
4 Information Technology Requirements (Maximum Points: 25)
Attachment H 9
Use of RCDD professional 6
Site Infrastructure for IT 4
Interior Wiring 6
5 Financial Documents Pass/Fail
6 LEED – Energy Star 2
7 Business / Corporate Qualifications 8
Total Points: 100 Points
Again, I reiterate, JBJ reporting is FUCKING terrible. When you first read the report, four dollar amounts are given as bids for a "deal" with Citizens. There is no description as to what that means. Is it for a lease? Is it to sell them a building and this is a public process due to GSE FL statute? Is low good, or high good? Who knows?
Then, there is no background on these numbers and what they may be made of - no comparison to average rental rates or sale prices in the area. Simply a statement that 2 are around $30MM and 2 are around $60MM.
After review of the ITNs, it's clear that these bids are costs to Citizens, and are comprised of a given rental rate + any amortized deal costs over the term (should LL elect to try to pass upfront costs on as part of rent), and apparently by law include no pass throughs (that would have been an interesting detail to point out in JBJ article), upfront costs, etc etc.
There is also simply no real curiosity on the part of JBJ to suppose why Everbank Tower's bid is half that of a class B Arlington building's.
And then, going back to straight up numbers, how does one arrive at $60MM??? WTF...are these bids even apples to apples?
C&W's commission is obviously on the 10 years excluding contraction rights. Are 2 LLs including option period costs and increasing commission to account for those options when they don't need to?
Basically, I stand by my statement that this is the worst piece of real estate journalism I have ever read. If a lease deal MUST be presented in full $ amount, which in some cases in Manhattan it is, then it must be laid out carefully and explicitly, i.e.:
Four landlords have presented to Citizens as bids what it would cost Citizens to lease space in their respective buildings. Each landlord was competing for a 226,400 usable square foot commitment to house over 1,000 employees, including up to 148 relocations from around the state, over a ten year term. Citizens provided guidance on what was required in a public ITN [link], and some of those requirements included parking, build out costs, and the state statute that forbode Citizens, a tax exempt government corporation, from paying for operating costs for the building over their rent. The four bidded costs to Citizens include:
1
2
3
4
It is unclear why Everbank Tower's bid came in lowest and roughly half that of two of its suburban class B counterparts, but the reasoning could include...
Cushman & Wakefield has been designated by the Department of Management Services to represent the tenant, which is Citizens Insurance."[/b]
Is it that difficult???!!!???
Citizens rejects all bids in Jacksonville move
full article: http://www.bizjournals.com/jacksonville/news/2014/07/02/citizens-rejects-all-bids-in-jacksonville-move.html