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Mayo Island office building in the works.

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A major developer is planning a 250,000-square-foot-office building on Mayo Island, real estate sources say.

A developer from Colorado has signed an agreement with the owners of the island, the family of Dr. Fred T. Shaia, obtaining an option to purchase the 6-acre property, sources say. Alan Shaia, who manages the island for his family, wouldn't comment on the potential sale or the planned development.

In addition to the office building, the development would also include full-service restaurants on the first floor with "a dining transition to the waterfront," says a real estate developer, who spoke on the condition of anonymity.

The Shaia family has been shopping the island to potential developers for the past few years, but until now hasn't attracted a proposal big enough to make a sale financially feasible, according to the real estate sources.

The project is in the preliminary stages, however, and there are issues to address, like potential flooding problems and accessibility to city sewer lines.

Other issues remain, too, such as lack of demand for office space downtown. While the overall office market is experiencing a high rate of vacancy, there is still strong demand for upper-end office space.

"I would absolutely not build speculative right now, only with a confirmed tenant," says Mark Douglas, a partner at Thalhimer Commercial Real Estate, adding that he's unaware of the Mayo Island project. He says demand is good but not great for Class A office space that is high-quality, but says he'd be surprised to see something as large as a 250,000-foot-office building, which is about the same size as the SunTrust office complex off Semmes Avenue. S

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