Got Miami Beach average sale prices they're up 72% got prices
up double digits in Boca Wellington Bal Harbour Del Rey
all across southern Florida. It isn't called the Sunshine State
for nothing. Over 230 days of sunshine per year, 600 and some
miles of beach, Disneyworld, fancy sports cars, a wild
nightlife, and of course, no income tax. My kids nickname
because we live in Orlando. They called me Disney dad. When we
would come here because I was always in a good mood. We didn't
stop hearing about Florida in 2020. from Florida now golden
ticket in Florida. It sounds like Florida. Well, you're not
alone. Some of Wall Street's biggest names like Goldman
Sachs, Elliott, management and Citadel group have or are
considering opening offices in Florida. High profile investors
like Keith Rabois, Shervin Pishevar and Jon Oringer already
made the move. Even JetBlue is considering it. For years, even
though people would talk about moving, it really wasn't cool
among the wealthy to move to Florida. It was like, okay, you
couldn't hack it in New York, go to Florida. Now, you're the
chump who stayed in New York. But it's not just COVID. Reports
of Florida slowly morphing into a legitimate tech and financial
hub has been loosely talked about for over a decade. In
2018, Florida solidified its place in the big leagues when
$2.88 billion was raised in venture capital. That trend has
continued all throughout 2020. I think actually Miami has the
opportunity within the next like five to 10 years to you know not
only become a tech hub, but being the largest tech hub in
the United States. Never in my three decades of doing this have
I ever seen the level of economic development activity.
But Florida's economy has long been marked by low paying
tourism and service sector jobs, inequality and ravaging climate
change. It's ranking near bottom for affordable housing and
health and unemployment insurance access. As much as
people understand Florida to be a beautiful place to go and
vacation. There is almost a synonymous or parallel
understanding that the state of Florida is backwater hail for a
lot of people. As consumer and employment behavior shifted
during the pandemic quality of life became a priority. And
Florida seemed like an obvious choice, at least on the outside.
Three Floridian cities were among the top six choices for
New Yorkers fleeing COVID. So can Florida become the next big
tech and finance hub?
In December 2020, venture capitalists Delian Asparouhov
tweeted, okay, guys, hear me out? What if we move Silicon
Valley to Miami? I sort of had this like, first moment where
I'd kind of I'd say, like, a crack in the foundation of my
like, you know, belief in San Francisco sort of occurred.
Within hours, Miami Mayor, Francis Suarez responded, how
can I help. You know, by time I visited in March, actually had
more late stage in particular investors, let's say Series B
and beyond than San Francisco did. Partially because how all
of this sort of crossover in hedge funds have entered into
venture capital are deploying more dollars than even the
venture capital firms are. So this nexus of power were sort of
already shifting and a lot of those have moved to Miami
already, both professionally and personally sort of had a sudden
realization I was like, oh my God being here. I got move here.
That happened on a Friday night and by Sunday night, we had you
know, put a bid in on a house in the design district. Delian's
tweet and eventual move has fueled momentum that Suarez and
other locals have capitalized on. From conversations with
celebrities like David Beckham and tech billionaire Peter Thiel
to Softbank's pledged to invest $100 million in the city. The
notion that high earning jobs in tech and finance could migrate
down Florida, has locals buzzing. Pre COVID we had landed
maybe 50 or 60 financial service firms. Many of them had
somewhere in the range of $500 million assets under management.
Now we're seeing companies that have assets under management.
well over a billion dollars. The state has many draws. Aside from
the sunshine its welcoming business climate is high on the
list. According to the Tax Foundation, after Wyoming, South
Dakota and Alaska, Florida is the fourth friendliest business
state in the country. No individual income tax and low
corporate and unemployment insurance taxes.
Looking at more than 60 measures of competitiveness, CNBC ranks
the state 12th fourth for access to capital after California, New
York and Texas. It was around tax season, and my accountant
jokingly said to me, why don't you go move to that house you
built down there and stop busting my chops every April 14.
I was like, alright. Casaburi is a member of Tiger 21, a peer
membership network for high net worth individuals. He moved his
family of six to Orlando about six years ago. Lifestyle is
fantastic. The obvious. The weather's great. There's beaches
all over the place. You're on either coast. Airports are
fantastic, yoou can be all over the country very quickly.
But really what's happening down here is really incredible.
Everywhere you drive around, you see building. The past few
years, we saw it happening, then, you know, tack on COVID
and it just exponentially changed the impact. The influx
of the wealthy has reflected in real estate sales too. South
Florida home sales valued $1 million and above jumped between
40 and 50% in 2020, compared to 2019.
This is a long term move for these companies. And I don't
believe that they would be signing eight to 10 year leases,
with options to expand. I don't believe that they would be
putting their kids in schools and uprooting them from their
private schools and public schools in New York, Boston and
Connecticut if this weren't long term, and I don't believe that
they would be buying $20 million homes if this were short term.
There is so many amazing, talented people from from every
standpoint, from marketing standpoint, from creative
standpoint, from leadership standpoint.
And people are always willing to move. Listen, if I was telling
people to move to Nebraska, it might be a little bit difficult
to sell. The average financial salesperson or analyst in
Florida makes about half of what they'd make in New York. That
could be a deterring factor for individuals choosing between job
offers in New York or Florida. We have a company that we
recently offered, you know term sheet here to LA that said, you
know, for the past three or four years that they've been building
their company here, it really struggled to find the talent
that they needed locally in Miami, and also really struggled
with being able to import talent. And they said that over
the course of COVID, and in particular now with Miami tech
week flipping, they're basically importing talent left and right
and they're able to sort of get their pick of the litter of the
top tier engineers in the world. Migration trends are a strong
indicator of growth. Between 2010 and 2019, Florida received
over 2.3 million more people than it lost, the highest in the
nation. The population grew by nearly 15% in the last decade.
But more than half of that growth came from people aged 60
and above. In 2020. Contrary to many reports, population growth
was expected to slow down. According to an independent
analyst on cellphone data, migration to Tampa and Orlando
surged, but dropped sharply in Miami. The overall impact ended
up being roughly neutral. The creation of millionaires, it
happens in New York City, it doesn't happen in Florida.
Florida is a place where millionaires go to retire. If
you're a young person thinking about you know, where am I going
to launch my career, New York is still you know where it's at,
you know, and that'll be the story next year and 10 years
from now.
Florida's economy has come a long way over the past 50 years.
In 1963, it was the 11th largest economy in the country. Today,
it's the fourth just behind New York. Florida's gross state
product, which is commonly used to measure the health of an
economy, also stayed well above the national average in the
seven years prior to COVID. Except for the dips in the '08
recession, employment grew in every category until 2020. True
health of an economy is really how the quote unquote bottom is
doing. How are teachers doing? How are our public sector
workers are doing. And you will see in Florida, just like in
every other state, that teachers are going mad, trying to trying
to provide some sort of education for children. Parents
are going mad, trying to provide some sort of lives for their
children and live for themselves. The economy is not
healthy, right? A very few are healthy. Just like anywhere else
in the world, COVID was tough on Florida, real GDP fell 2.9%. And
despite its lax COVID closures and the stories of mass influx
of people, between Q3 and Q4, the state only grew 3.1%, in
comparison to other states with no income tax like Texas and
Tennessee.
It's hard to believe that there's this rise of Florida.
Florida has a growing population. And that's mostly of
lower income earning population that are leaving, you know, the
New York area, the New York metro area because, again, of
enormous affordability problems, you know. While an immense
amount of wealth enters Florida annually, median income in the
state is about 13% below the national average. Most employed
Floridians work in construction, restaurants and food services,
and elementary and secondary schools. Inequality is
increasing over time. And the state spends less on public
services like health and education per capita than any
other state in a nation. That has resulted in social and
economic problems like suppressed low and middle income
wages, social fragmentation, poor health and violence.
There's 2, 3, 4 different Florida's that people live in.
There's a tax haven, Florida where people can lay out on the
beaches or sit in their pent houses. There's the Florida of
tourism where people could go to Disney and then there's a state
of farm workers who work from sun up to sun down, get shuttled
from school buses from their homes, have no protection,
usually have no papers. There's a life of black people who
continuously live with no representation, have the worst
jobs in the state. The best things that you know about
Florida on those beautiful postcards are at the expense of
black people of immigrant people, Haitian folks, African
folks, these are the invisible people who make Florida run.
Spending more than a year working from home has reassured
companies that they can cut back on pricey New York City or San
Francisco offices, while maintaining revenue. And Florida
has benefited from that shift. But for it to become an
epicenter, could take time. It took New York City centuries to
build its agglomeration and economies of scale.
It remains to be seen if and how South Florida can accomplish
that. What really excites me about Miami, is ethos that
everybody here is really excited about, right? pro technology,
pro capitalism, pro immigration, you know, cheap housing, low
cost of living, low taxes, being able to like grow into that I
think is really important and all the early signals to me seem
you know, quite positive. But it'll be interesting to see sort
of in September and October you still seeing this continuous
exponential growth. This is all real. This is not a dipping of
the toe in the sand. We know this because they're talking to
local accountants and local attorneys and the traffic is
very high to those offices.