Intech, the longtime anchor tenant of the luxury CityPlace Tower office building, confirmed it plans to move to One Clearlake Centre, west of downtown West Palm Beach.
The deal, in the works for some time and first reported last November, would free up 50,000 square feet of arguably the best office space downtown.
That soon-to-be empty space will be an indicator of whether downtown really needs more luxury office space.
“It’ll be a big test,” said Kelly Smallridge, president of the county’s Business Development Board, the county’s chief recruitment arm.
“It’s very desirable space,” Smallridge said. “I don’t think it’s going to be empty that long. Everybody keeps complaining there isn’t enough office space. And (this amount of) space hasn’t come on the market in a long time.”
Intech’s 17th and 18th floors at CityPlace Tower feature water views and lots of luxury finishes.
Justin Wright, Intech’s chief operating officer and general counsel, said Intech is making the move to One Clearlake next summer for a couple of reasons.
One Clearlake Centre, at 250 South Australian Ave. offers Intech employees, clients and visitors easy access to and from Interstate 95, Palm Beach International Airport, and commuter trains, he said. An added bonus, he said, is that there aren’t any train crossing gates to worry about when heading to the building.
One Clearlake also offers Intech a dedicated generator, which allows Intech to run its business even if power is out in West Palm Beach, as can be the case during hurricane season.
Intech is taking One Clearlake’s top two floors totalling about 25,000 square feet, half the size of its existing office.
The rent is less expensive, too: Rents at One Clearlake are about $26 a square foot, not including about $15 per square foot for taxes, maintenance and insurance. CityPlace Tower, on the other hand, commands rents starting in the mid-$40 per square foot range, plus another $20 for common area maintenance, real estate brokers said.
Intech, the money management firm now owned by Janus Henderson Global Investors, was the signature tenant that first kicked off leasing when the 18-story CityPlace Tower opened in 2008. Intech moved to the tower’s penthouse floors, which are connected via an internal staircase, from a location in Palm Beach Gardens.
Now Intech’s hop over to One Clearlake could raise the profile of this older office tower. The building last year sold for $42 million to Velocis, a private equity real estate manager, in partnership with CREC, a Miami-based real estate company.
In recent months, city and business officials have said there’s a strong need for more space to accommodate businesses wanting to be downtown.
In fact, city commissioners recently approved a new office building plan by the Related Cos. to build a waterfront office tower.
The 275,000-square-foot tower, dubbed One Flagler, will be built next to the First Church of Christ, Scientist along Flagler Drive. At 25 stories, the tower will have soaring views of the Intracoastal, Palm Beach and the Atlantic Ocean.
The public was divided over the project. While some residents extolled the tower’s design and need, others decried the building’s construction on waterfront land that city residents twice voted to keep only five stories.
Brokers throughout the city say demand for new office space isn’t as robust as city leaders and some developers say it is. In fact, many brokers say potential tenants new to the market mostly want small blocks of space, up to about 5,000 square feet.
If built, it’s unclear how quickly One Flagler will fill up, especially since Related Co.’s Ken Himmel said rents will top $50 a square foot, not including another $25 to $30 a square foot in taxes, insurance and maintenance.
But Himmel is optimistic, saying that many tenants own homes in Palm Beach and want to do business in the area. Potential tenants include financial services companies, private equity firms, hedge funds, family offices and wealth management firms, he said.