🥶 Florida's Cold Feet Wave

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Happy Friday Highest & Best. Today we’re talking backing out and moving in:

😲 Florida homebuyers are cancelling deals

💰 Wall Street South gets more Wall Streety

🦺 Ken Griffin sells Chicago, builds Miami

🚀 Florida’s population sets new record

Let’s get to it!

Florida Homebuyers Have the Nation’s Coldest Feet

Homebuyers in Orlando are backing out of their purchases at the greatest rate in the U.S.

In June, 20.8% of all buyers who signed contracts on an Orlando home listing reneged on the deal, according to a report by brokerage Redfin. That’s the highest share of canceled contracts in the nation, where the rate hit an all-time high of 15%.

Jacksonville and Tampa tied for second place in the U.S, each with 20.5% of all sales contracts cancelled last month, Redfin reported.

In Miami, 2,500 home purchase deals were abandoned in June, which comes out to 17.6% of all homes that went under contract.

Florida buyers are triple burdened by high mortgage rates, rising HOA fees and the priciest home insurance premiums in the country— all of which push home purchases further out of reach. (We previously chronicled a Jacksonville broker who said that as many as 25% of buyers canceled deals after they got insurance estimates).

“Buyers often back out during the inspection period because they find something they don’t like, but affordability is really the underlying issue,” Rafael Corrales, a Redfin agent in Miami, said in the firm’s report this week.

Corrales said he advises clients to research the costs of insurance, taxes and fees before signing a home purchase contract. And also: hire a lawyer. Especially if buying a condo in an older building that could be subject to a whopping special assessment under Florida’s new Building Safety Act.

Condo buyers, who are entitled to see a building’s HOA board meeting minutes before completing a purchase, are finding they need to hire an attorney to compel sellers to share that information, he said.

Below, from Redfin’s report, is the national rate of home purchase cancellations, by month:

⏪ Catch up on recent Highest & Best issues:

• Tale of Two Condos, July 19, 2024

• Flock of Floridians, July 12, 2024

• Ruthless Rental Reality, June 29, 2024

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Wall Street South? Miami Gets its First Ever Trading Floor

Miami’s got investment banks, private equity firms, and hedge funds that take up ever more space in its prime office buildings.

One thing the newly dubbed ”Wall Street South” didn’t have, though, is a trading floor.

Well, that changed this month.

The Securities and Exchange Commission approved the creation of “MIAX Sapphire,” Miami’s first securities exchange, to be located in an office building in the Wynwood neighborhood.

The exchange will launch on August 12 for electronic trades, and a physical, “next generation” trading floor will follow in 2025, according to a statement by Miami International Holdings, MIAX Sapphire’s parent company.

"Construction of the new MIAX facility is well underway and we are excited to showcase this new facility to the industry when it opens next year," Douglas M. Schafer Jr., Miami International’s executive vice president and chief information officer, said in a statement.

MIAX leased over 38,000 square feet of office space at 545 Wyn last year, according to brokerage Avison Young. The firm will occupy the entire ninth floor, just below Sony Music, the tenant taking up the full tenth, and uppermost, story.

The addition of a trading floor will likely raise Miami’s profile as a U.S. financial hub, and be a draw for banking firms seeking an outpost in the region, says John Boyd Jr., principal of The Boyd Company, a firm that advises companies on where to locate new corporate offices.

“Just the optics of a trading floor is significant,” Boyd said in an interview this week, adding that the MIAX exchange will be a stop on any site selection tour by a financial entity considering Miami.

Miami, once known mainly as a Latin American banking capital, now has the largest concentration of domestic and international banks on the U.S. East Coast outside of New York City, said Boyd, whose firm’s clients include JP Morgan Chase, TD Bank and PNC Bank.

“Miami is now joining Dallas and Montreal with respect to a trading floor — and that’s significant,” Boyd said. ”Banking is all about connectivity and connecting the global marketplace. A trading floor is fundamental to that.”

Billionaire Ken Griffin Sells Chicago, Builds in Miami

It’s pretty clear that billionaire Ken Griffin, founder of hedge fund Citadel, is making himself at home in Miami since his move from Chicago two years ago.

Within the same week this month, Griffin listed a never-lived-in Chicago penthouse for sale AND filed plans to build Citadel a new waterfront headquarters in Miami.

I guess he’s staying.

👋 On Chicago’s Gold Coast, Griffin listed an unfinished 38th-floor penthouse for $11 million, the Chicago Tribune reported this month. The 7,500-square foot space, with a private pool, a private elevator and four valet parking spaces in a private garage (see a theme here?) is a “one-of-a-kind and exceptional opportunity” (for someone else) to create a “dream home” in the Chicago sky, according to the property listing at 9 West Walton St.

🦺 Meanwhile in Miami, a lawyer for Ken Griffin's hedge fund submitted a “pre-application” for plans to build a headquarters on a 2.5-acre site on Brickell Bay Drive.

Citadel intends to develop the site in multiple phases, Bisnow reported. The first phase would be a tower at 1201 Brickell Bay Drive that includes office space, a hotel, retail space, plus a health and fitness club.

After that, there’ll be even more office space, some residential units, and restaurants at 1250 Brickell Bay Drive.

💸 Even without a permanent headquarters, Citadel is still expanding in Miami.

Last month, the hedge fund said it will lease two more floors in the soon-to-be completed tower at 830 Brickell, in the pricey financial district. That will make Citadel the largest tenant in the building, with 130,000 square feet of office space.

Citadel, which relocated from Chicago to Miami in 2022, said it expects to have about 450 employees in Miami by the end of the summer, due to local hiring and "another wave of relocations” ahead of the school year.

👋 In related news: 830 Brickell, the new office tower being wrapped up by Cain International & OKO Group, announced this week that it secured a $565 million loan ahead of its opening. Developers of the fully-leased 57-story tower will use the funds to pay off the project’s construction loan.

The tower, where Citadel and other financial firms have committed to space well before completion, will open to tenants this fall. Ninety percent of the companies that will locate there are establishing their first office in Miami, the developers said.

Florida Hits New Population Milestone: 23 Million Residents

The surge of people moving in from elsewhere has pushed Florida’s population past the 23 million mark for the first time ever.

As of April 1, Florida had 23,002,597 residents, according to the state’s Demographic Estimating Conference, which published a report this month.

Florida added nearly 359,000 people in 2023, and this year, it’s expected to attract about 368,000 more. (That’s a lot of potential readers for this real estate and migration-focused newsletter—is it not?😎)

Anyway: For the five-year period through April 1, 2028, Florida’s population is expected to grow by an average of 319,109 each year, or 874 people per day.

That’s like adding a city slightly smaller than Orlando every year, the estimating agency said.

By 2031, Florida’s population will top 25 million.

(Related: that’s 25 million reasons for this newsletter to exist — so forward Highest & Best to a friend!!)

Below, one of several migration forecasting charts published this month by the Demographic Estimating Conference:

That’s it for today!

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