Well this is a cozy deal
 

As reported this morning in a newspaper not to be mentioned, the District just leased 38,648 sq. ft. of Office space in Brownwood, in a building the Developer apparently no longer needs.

It's not clear from what I read, who is paying for the "fitup" of the building (conversion to office space, fixtures and furnishings).

The cost is $1.5M per year and I suspect that's NNN, which means it really costs about $2M per year.

That's $40 per sq. ft. in base (fixed) rent. If the lease is NNN, it's likely another $10 per sq. ft. in CAM & Taxes.

The office space market is dead across the USA. The number of empty or nearly empty office building, is staggering. There are landlords out there, that have over a million square feet of empty office space.

The average "asking price" for 1st class office space in Orlando today, is under $30/sq. ft. In Ocala, it's $23/sq. ft.

A 1st class office building in Metro Boston that housed one of the most prestigious high-tech companies in the world, just sold for less than $30/sq. ft. It was built 10 years ago for $300/sq. ft.

More than 64% of government employees across the country, have a "hybrid schedule" and don't go to their office every day. A recent US Senate report shows that less than 6% of Federal Employees go to their office every day.

Doesn’t appear to pass the sniff test of an arm’s length transaction.

If I'm reading the context and intention of the OP - it's a concern.

The office space in Brownwood is owned by the Developers. The District (A Villages governmental entity) is paying the Developer around 20% over the typical average office space costs for this part of the state. The concern is that Villagers are overpaying for district office space and that it's some kind of "nudge nudge wink wink" deal.

From where I google, there isn't any Class A / 1st Class office space available in TV other than in Brownwood. . . looks like a deal from a monopoly , .

:a20::a20::shrug:

& of course, it has to be in Brownwood ... not that I would classify the building as "1st Class Office Space", I was being generous.

The district should be embarrassed.

Where is the POA when you need it, LOL

Is there any evidence at all that the District is paying less where they are now or will be paying more than anyone else with office space in Brownwood?

A rational post…….

Oh?

The Rent (not including NNN charges, if any), increased by 70%. They increased space by 20%.

There's not enough information in the article to calculate the increase rental rate per square foot, but it appears the increase on a per foot basis, is about 60% ($25/sq ft increased to $40/sq ft.

This according to a newspaper not to be mentioned and a memo from District Director Kenny Blocker.

Also, there's no law that I know of, that says the District's Administrative (non-customer contact) functions need to be located in The Villages ... where they can ONLY lease space from the Developer who owns all the land. (I'd love to know their rationalization for avoiding "sole source bidding" requirements.)

What the hell, the State of Florida has their "administrative offices" in Tallahassee, 200 miles away from us and 500 miles from Miami. They simply setup satellite offices to handle "customer contact" locations where necessary.

Seemed like reasonable questions.

My post was mostly sarcasm cloaked in dry humor. It's all a monopoly cult. And if they get really greedy, the place will implode if the district costs get out of hand and the annual increases kills resales. . , like the new FL HOA requirements to be 100% reserved. HOA payments are now the size of the mortgage payment at many developments.

How did the business end?

slowly, then suddenly!

It may surprise you to learn that Tallahassee, 200 miles from us and 500 miles from Miami, is the State Capitol. Where else would the State of Florida have their administrative offices? Or are you suggesting Florida should move its capitol?

Could the District operate from LSL? Sure, but the Villages has doubled in size since they started in LSL so it makes sense that they need more space and consolidating to a centralized location has benefits,

With a little less rounding it looks like $28/sqft to $44/sqft for a 44% increase. That’s certainly a healthy increase but again, is it out of line for the current cost of space in Brownwood? There has been a lot of talk of inflation in the last four years, perhaps this increase is an adjustment to catch up.

I have no doubt the District is paying a premium price for this space but I don’t know that it is out of line. The District and the Villages are closely related and it wouldn’t surprise me at all to find that the negotiations on price were somewhat less than difficult. Still, you get what you pay for and I’m pretty happy with what I get so if this is the cost then I’m not unhappy to pay it.

Wrong question. Right question: Could the District administration offices operate in non-Developer-owned property? Yes, yes they could. They could rent space in an office area on 301 NEAR Brownwood. They could rent office space on 466A somewhere NEAR Brownwood. They could rent office space on 466A between Buena Vista and Morse.

There is nothing stopping the District GOVERNMENT administration offices from renting anywhere in the general vicinity of Brownwood, but not in a Developer-owned building. This isn't a rec center that needs to be golf-cart accessible. It's government offices. They shouldn't feel any obligation to pay the developer rent and in fact, it seems a bit of a conflict of interest.

Seriously??? Are you proposing that District offices for a golf cart community relocate to an area unreachable by golf cart? In that case they should consider some of that space in Boston.

Administrative offices for Florida are in Florida. Administrative offices for Sumter County are in Sumter County. Administrative offices for the Villages should be….. someplace else??

Administrative offices are generally in buildings that are owned by the county/municipality/state they serve. The State administration offices are in state-owned property. In fact, there is an actual law about this, that counties MAY NOT CHARGE rent to tax collectors for that county.

So if you want to compare apples to apples, then sure - let the Developers open up space in Brownwood to the district's administration offices, but NOT charge any rent at all.