🏖️ Beaches and Billionaires

Miami's future as a money capital. Plus: Is Bezos paddleboarding?

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Happy almost-Thanksgiving Friday! Lots of news to share about the South Florida real estate week that was:

🏝️ Billionaire Ken Griffin says Miami could replace New York as the world’s financial capital

💸 Manhattan residents brought $2.9 billion in new income to Miami in 2021

💰 The Big Warehouse Wager

💅🏼 Miami office building gets a makeover— and higher-paying tenants


But first: it’s been two weeks since Amazon founder Jeff Bezos announced he’s moving to Miami after nearly 30 years in Seattle. One Instagram account suggests he’s already arrived.

“Only in Florida” posted a video of— presumably — Bezos paddleboarding in Miami this week with his fiancé, Lauren Sanchez. One thing’s for certain: Miami Bezos-spotting is now a thing.

Instagram user spots Jeff Bezos (or someone who looks like him) paddle boarding

Will Miami Dethrone NYC as the World’s Finance Capital?

In other billionaire news: Ken Griffin says the future of global finance is likely in Miami, not New York.

Griffin, the founder of hedge fund Citadel, told Bloomberg News this week that Miami, where he and his firm relocated from Chicago, “represents the future of America.”

Those aren’t just words. Griffin is planning to build a $1 billion office tower along Miami’s Biscayne Bay to serve as his firm’s new headquarters. He also spent $83 million in July for an office building in Palm Beach, the other South Florida locale that’s attracting financiers from up north.

The Florida migration of Wall Street giants and tech CEOs is continuing well past the pandemic. And that’s spurring a wave of ultra-luxury residential construction and a race to build premium office skyscrapers, at a time when cities like New York are struggling to fill empty commercial buildings.

Citadel still maintains a healthy presence in New York and is building an office tower there too. But it’s possible that today’s Manhattan firms will become the satellite cousins to their Miami headquarters, Griffin said.

“We’ll see how big Wall Street South becomes,” he said. “We’re on Brickell Bay, and maybe in 50 years it will be Brickell Bay North how we refer to New York in finance,” he said.

Manhattan Move-Outs Brought $2.9 billion to Miami in 2021

This would be a good place to talk about Florida wealth migration stats. And they’re pretty stunning.

Between 2020 and 2021:

  • Residents who left Manhattan and moved to Miami brought $2.9 billion in taxable income with them.

  • More new income flowed from Manhattan to Miami that year than from Manhattan to any of its immediate suburbs.

  • Chicago residents were the second biggest contributor to Miami’s wealth. They brought in $475 million of taxable income.

  • Los Angeles migrants came in third. Miami gained $331.9 million in income when they moved in that year.

  • Palm Beach County captured incoming wealth from Manhattan too: $1.06 billion came in from those new residents.

The figures come from a new analysis of tax data by the nonpartisan Economic Innovation Group, which studied how migration during the pandemic changed the economic realities of places people moved to—and from.

The think tank looked at IRS data from 2021, the most recent available, which tracks when taxpayers file from a different state and county than in the previous year.

The new county-by -county analysis shows an unprecedented migration of high-income earners out of America’s largest cities, and puts a dollar figure to their mobility.

“There’s definitely good optimism for re-centering or shifting economic centers to the south,” Benjamin Glasner, an associate economist with the Economic Innovation Group, said in an interview last month— well before Ken Griffin made a similar observation.

Want to see how much wealth came in — or flowed out —of your county? See EIG’s interactive map here. 

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The Forage for Storage

Planned 1.5 million square foot warehouse in Pompano Beach (Photo: Rockpoint)

There’s a huge demand for warehouse space in South Florida. The population is growing and online retailers like Amazon need ever more places to stash their goods nearby. How else would you get same-day delivery of cat food or sparkly leggings?

With that in mind, Boston-based private equity firm Rockpoint announced a “trophy” development plan: it will build a 1.5 million square foot warehouse in Pompano Beach.

That’s only 40 minutes away from folks in Miami who click “Place Order Now.”

Rockpoint paid $183.8 million for the development site which sits on about 88 acres, according to Vizzda, a firm that tracks commercial property sales and development plans. The deal closed this week.

The closing price makes this deal the sixth-most expensive development site to be sold in 2023 across the three-counties that make up southeast Florida, according to MSCI Real Assets.

The future warehouse — which will begin construction in May 2024 — is part of a larger 223-acre development called The Pomp, which will include 4,000 luxury residences, two hotels, office space and live music venues, alongside Harrah's Pompano Beach casino.

The developers of the master project, Cordish Companies and Caesars Entertainment, sold the warehouse site to Rockport. But they will partner on the construction of it.

Chic Magnet: Miami Office Gets New Perks— and Tenants

801 Brickell got an upgrade inside and out (Photo: Colliers)

Sometimes it’s clear when you’re due for a makeover.

For 801 Brickell, a nearly 40-year-old office tower in Miami’s financial district, the signs were obvious: out-of-state financial and legal firms were hunting for premium office space, and a newer, taller building was rising nearby and getting all the attention.

So the 28-story property underwent a $30 million renovation that included a brand new lobby, a conference area, a tenant lounge, and a fitness center with lockers and showers. The common spaces and leisure amenities are all must-haves for blue-chip firms as they coax employees to spend more time in the office, said Stephen Rutchik, vice chairman at brokerage Colliers who’s been marketing the building for nearly two decades on behalf of its landlords.

“It’s about earning the commute,” Rutchik said. “When we as the landlord can help our tenants earn their employees’ commute, everybody wins.”

Starting rents for leases signed in the last 12-months averaged $100 per square foot, and have gone as high as $120, Rutchik said. That’s higher than the average asking rent for Class A office in the Brickell neighborhood, which was $93.51 in the third quarter, according to Colliers data.

Of the building’s 415,000 square feet, 89,000 were put under new lease commitments in the past year, Rutchik said.

New leases include:

  • Washington-based law firm Venable LLP, which took 17,900 square feet.

  • Belcorp, a South American beauty products company, which signed a lease for 7,730 square feet.

  • Aercap, a Dublin-based aviation firm, took a full-floor lease.

  • LeverX, an IT and software company, moved from its Silicon Valley headquarters and into a 3,876-square-foot office in July.

Last month, Nuveen, the long-time owners of 801 Brickell, sold the building to Monarch Alternative Capital and Tourmaline Capital Partners for $250 million. That deal could set a record for South Florida investment sales this year, the Real Deal reported.

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Gotta See it: Headlines from the Week

💲 Investors love South Florida mobile home parks. A Dallas developer just bought one in Deerfield Beach for $24 million (The Real Deal) 

🛣️ Hialeah City Council votes unanimously to name a road after Donald Trump (Miami Herald)

🚕 Four-story Water Taxi hub with bar and restaurant may be coming to Fort Lauderdale beach (Sun Sentinel)

🏰 Homebuilder Lennar buys historic castle near Miami, with plans for 150 homes on the site around it (South Florida Business Journal)

That’s it for today!

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