By Arian Campo-Flores
MIAMI -- This city has long pitched itself as an attractive
location for finance and tech firms, with its tax advantages,
flight connections to New York and cosmopolitan flair. Its efforts
appear to be paying off.
Private-equity giant Blackstone Group Inc. unveiled plans in
October to open an office in the city to serve its internal
technology needs that will eventually employ 215 people.
Billionaire financier Carl Icahn moved his company to nearby Sunny
Isles Beach earlier in 2020. Real-estate investor Starwood Capital
Group is building a sleek new 144,000-square-foot headquarters in
Miami Beach.
Goldman Sachs Group Inc. is eyeing the region as a possible home
for its asset-management arm, according to people familiar with the
matter. A spokesman said the company was pursuing a "strategy of
locating more jobs in high-value locations throughout the U.S., but
we have no specific plans to announce at this time."
A string of smaller tech and finance firms recently opened
offices in the area, or said plans are in the works. Venture
capitalists including Keith Rabois and Jon Oringer have moved here
and hailed its emerging tech scene.
"The sun, moon and stars have all aligned," said Nitin Motwani,
managing partner of the Miami Worldcenter mixed-use development,
who has helped woo firms to the city. "The new normal is going to
see a lot more growth happening here."
Various factors are at play beyond beaches and subtropical
weather, he and others say. Florida has no personal income tax and
low corporate taxes. The 2017 federal tax law capping deductions
for state and local taxes enhanced Florida's appeal for wealthy
residents of high-tax states. And the coronavirus pandemic made
clear for many people that they could work remotely from
anywhere.
Blackstone settled on Miami for its new office in part because
of the growing pool of tech talent, fed by local universities and
existing companies, said John Stecher, the firm's chief technology
officer. Other pluses: the city's nightlife, restaurants and
thriving arts scene.
It is "a world-class destination city where people want to
live," Mr. Stecher said.
Skeptics say much of the migration involves small firms that
aren't major job creators or wealthy executives moving for personal
reasons. An effort to create a tech hub in Miami during the 1990s
dot-com boom withered after the boom turned to bust.
Miami also faces some of the challenges confronting all U.S.
office markets in the months to come as they deal with the pandemic
and the economic downturn. Leasing activity in the third quarter of
2020 in Miami was "limited as offices sat mostly empty and firms
were forced to reimagine their space needs," according to a JLL
report.
A 2020 study by CBRE Group Inc. found that South Florida added
14,700 tech jobs between 2015 and 2019, far below a market such as
Denver but on par with one like Portland, Ore.
"We've created more of an ecosystem here," said Shay Pope, a
CBRE senior vice president in Miami.
The Miami Downtown Development Authority, an
economic-development agency, launched a campaign to court hedge
funds in 2013, holding cocktail events in New York and elsewhere.
The effort, which later targeted financial and tech firms, scored
some successes.
Universa Investments, founded by hedge-fund star Mark
Spitznagel, moved to Miami from Los Angeles in 2014. Among the
draws were tax advantages, lower cost of living and a welcoming
business climate, said Brandon Yarckin, chief operating
officer.
The move, which involved about 15 people, was a success, he
said. The firm has roughly doubled its assets and added staff. It
set up shop in a 20th-floor office featuring panoramic views of the
city, with double the square footage of its digs in Los Angeles at
a lower price.
"It's really hard to compete with a place like Miami when you
factor in all these different aspects," Mr. Yarckin said.
A 2019 report commissioned by the Downtown Development Authority
found that the number of full-time employees working for registered
investment advisers in downtown Miami had increased 55% to 1,326
over the previous five years. Total assets under management grew
61% to $75 billion.
A recent arrival is wealth-management firm Boston Private, which
opened a Miami outpost in early 2020. It gives the firm access to
growing numbers of high-net-worth individuals and family offices in
Miami, as well as a base to cover the U.S. Southeast and Latin
America, said Patrick Dwyer, head of strategic business
development.
"There is so much wealth coming here," he said.
The influx of firms is helping counteract the pandemic's blow to
the office market. Companies new to the market are currently
seeking more than 1.1 million square feet of office space in
Miami-Dade County, a historic high, said Danet Linares, vice
chairman of Blanca Commercial Real Estate. More than half are
financial-services firms, and about a third are in the technology,
advertising, media and information sector.
ShiftPixy, a tech company focused on workforce management,
relocated its headquarters to Miami from Irvine, Calif., in
October, and has about 30 people in the office. The firm looked at
cities including Nashville, Tenn., and Austin, Texas, before
settling on Miami because of its entrepreneurism, vibrant culture
and prime location as an East Coast beachhead, said Chief Executive
Scott Absher.
"As you started looking at quality-of-life issues, Miami kept
coming to the front," he said.
Write to Arian Campo-Flores at arian.campo-flores@wsj.com
(END) Dow Jones Newswires
January 05, 2021 08:14 ET (13:14 GMT)
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