A horde of U.S. financial firms, especially those in New York, is moving to Florida.
The convergence of financial businesses on southeast Florida’s “gold coast” is the greatest in any time during the last 32 years, Kelly Smallridge, president of the Palm Beach County’s Business Development Board, told Business Insider.
One realtor is taking hedge fund executives on as many as three tours a day of available office space from Miami to West Palm Beach.
“They’re not just from New York and they’re not just the pre-pandemic 2,000 to 5,000-square-foot satellite offices,” Stephen Rutchik with the Colliers real estate brokerage said to Business Insider.
Most of the interest is in spaces of 50,000 to 70,000 square feet in buildings ready to move into, Rutchik noted. “They want to make the move now for tax purposes, and do it before the end of the year,” he said. The level of activity is “torrential” and “unabated.”
Florida cut its corporate tax rate from 5.5 percent to 4.458 percent for tax years 2019, 2020, and 2021. The rate in New York is 6.5 percent and in Connecticut, home to many hedge funds, income is taxed at 7.5 percent.
About 99 percent of Florida-based businesses pay no state income taxes, a 2019 Orlando Sentinel investigation found.
Eight years ago, when financial executives began buying homes in the Miami area to escape high northern taxes, “there weren’t many ‘Class A’ office buildings with water views to accommodate the requests,” Smallridge said.
Now new arrivals are walking into turnkey office spaces that are part of the region’s recent office-tower building boom.
Legendary investor Carl Icahn moved his entire company to Miami last year. JPMorgan Chase has taken space in DiVosta Towers, an 11-story luxury complex in Palm Beach Gardens; Comvest Partners and Norwest Equity Partners are settling into 360 Rosemary, a West Palm Beach campus rigged out with state-of-the-art digital technologies, including motion sensors and facial recognition systems.
As big-name companies decamp to southeast Florida and make it an even greater financial center, more will follow as a “herd mentality” takes over, Rutchik predicted.
TREND FORECAST: With the COVID War sparking a work-at-home, Zoom World that instantly shifted businesses out of bustling cities, there is no longer a need to pay millions to work in high-tax urban centers.
The facts are in front of all open eyes: Wall Street is Dead Street… as are all the businesses that depended on the commuters and tourists that once flooded it.
Thus, the flow to low tax, nice-climate cities by financial and other business sectors will continue.
While there will be a temporary economic “Biden Bounce,” what the media and their “experts” continue to discount is that NEVER before in history has there been a work-at-home Hi-Tech trend that has collapsed commercial/business office sectors in major cities. And NEVER before have so many people – renters and owners – abandoned cities and moved to suburbs and ex-burbs en masse as they have now.
Only 14 percent of New York City’s one million office workers were back in the city’s office blocks in mid-January, according to data compiled by Kastle Systems, a security firm.
About 79 percent of workers feel that doing their jobs at home is working well, according to a PricewaterhouseCoopers survey released this month.
Just today, the real estate company Brookfield Property Partners LP posted a $2 billion loss as the fallout from the COVID-19 pandemic caused it to reassess the value of its real estate.
They said their 2020 loss compares with net income of $3.2 billion in 2019, a decline the company attributed to “unrealized reductions of values of certain assets within the portfolio.”
Moreover, the long-term toll of sinking real estate and shrinking populations on cities that are being abandoned will result in yet higher taxes, government bond busts, loan defaults… and rising crime.
Therefore, the long-term toll of the cities that are being abandoned will result in yet higher taxes, government bond busts, loan defaults… and rising crime.
TRENDPOST: After months of tenants occupying their apartments under eviction bans, more and more apartment owners are falling behind on their mortgages.
The proportion of multifamily buildings’ mortgage loans that banks view as risky has almost quadrupled from 4.6 percent to 16.0 percent, according to data firm Trepp after it compiled risk ratings from more than a dozen large banks.
A $481-million securitized loan collateralized by 43 of the Chetrit family’s apartment blocks in New York City has been placed on a watch list; the family blames “tenants not paying rent” and the eviction ban as the reason they are unable to make payments.
Sales of U.S. apartment buildings were 28 percent fewer in 2020 than in 2019, Real Capital Analytics reported.
TREND FORECAST: As we have warned last year when politicians launched the COVID War and locked down the economy, “When people lose everything and have nothing left to lose, they lose it.” As forecast, according to a study released yesterday by the National Commission of COVID-19 and Criminal Justice, America’s murder rate was “historic” and has “no modern precedent.”
Homicides jumped over 30 percent from 2019 to 2020, gun assaults climbed 8 percent, and aggravated assaults were up 6 percent, according to the study.
As the “Greatest Depression” worsens, these crime rates will rise.
