Billionaire investor Carl Icahn just moved his office to Sunny Isles. Starwood Capital is building a new headquarters on Miami Beach. Over the past year or so, there has been something of an exodus of financial pros and hedge funders moving to South Florida. Even Barstool Sports founder and burgeoning day trader Dave Portnoy has been operating out of Fort Lauderdale.
Political unrest, anti-business sentiment and state income taxes in places like New York, Chicago and California are all driving people to Florida, developers Gil Dezer, president of Dezer Development, and Jon Paul Perez, vice president of Related Group, said during a Bisnow webinar Tuesday. “If you don’t live in Miami, you should go get your head checked,” said Dezer, whose company has developed condo towers in New York and South Florida, including the Porsche Design Tower. “I was very happy to be stuck here for coronavirus, for the whole COVID pandemic, to be stuck in our beautiful homes with the beautiful ocean, even though I escaped on my boat a few times — shh, don’t tell anybody. But that’s the beauty and the benefit of living in paradise.”
Dezer pointed out that in Miami, protests around the death of George Floyd had been relatively peaceful. “Here in South Florida, we’re just generally a group of happier people,” he said. “And that’s why you don’t see these kind of problems you see all over the rest of the country.”
Dezer said his company has been operating steadily throughout the past few months. It recently sold 260 out of the 310 units at a new beachfront condo, Residences by Armani/Casa, which was developed in partnership with Related Group, and reopened a sales office last week. Dezer Development has 10 buildings in the pipeline, Dezer said, including the redevelopment of the Intracoastal Mall plaza, a 12-acre site in Hillsboro Beach where Dezer hopes to build a 22-story project, and future projects in Sunny Isles Beach. Dezer is also operating a drive-in movie theater and selling a Nova Southeastern campus property in North Miami Beach that has potential for 1,000 residential units. Perez said that top projects for Related Group currently include multifamily projects in Wynwood and Boca Raton, a condo project in Pompano and new developments in Tampa, Atlanta and Phoenix. The company is building spec office space in West Palm Beach, with the expectation that more financial firms will relocate from New York. The coronavirus, Perez said, “increased the speed and the pace of people wanting to move to South Florida for many reasons: taxes, better quality of life, etc.” Dezer said South Florida is moving away from reliance on South American buyers, who drove the Miami market this past decade and “spoiled” real estate developers. “It’s the empty nester market that’s really moving,” he said, adding that high-end rentals are going for $20K to $200K a month. “When the rentals come, then of course the sales can follow right behind,” he said. “Essentially, people are probably trying out getting their feet wet, seeing if they can get accustomed to the lifestyle, which is a little bit slower than New York, but at the same time they’re seeing all the benefits and all the reasons to move.”
Perez said Florida offers great value compared to northeastern cities. “You can buy something understated for $800, $850 a foot, which is unheard of in prices in markets where we’re seeing the activity come from,” he said. Dezer said he’s mindful of the available inventory among his competitors, like new developments such as Muse, Ritz-Carlton and Turnberry. “Every one of us are about 80% to 85% sold out, which means that there’s still a lot of good units on the market right now that are available for sale,” he said. “Smart buyers are going to play us against each other, but you don’t blame them. I would do the same if I were them.”
The webinar also featured Stantec Senior Principal Andrew Burnett, who said his architecture and design firm had been getting more work than anticipated during the pandemic, and Juneau Construction President Les Juneau, who was likewise busy. “There is a lot of optimism in uncertainty,” Burnett said. “We can sort of bend our reality toward where we want it to be, instead of accepting that something is happening to us.” Juneau said his firm had been facing a $600M backlog of work pre-coronavirus. He said he was optimistic that the current economic slowdown is only a pause. “Judging by the workload in our department, if any percentage of that goes forward, we’ll be just fine,” he said.