Speaker 1: This is Bloomberg Business Week with Carol Masser from Bloomberg Radio.
Speaker 1: Real estate stories definitely popping up constantly on our radar today.
Speaker 1: One about office vacancies in Manhattan jumping to a twenty
Speaker 1: one century record as the COVID nineteen pandemic froze new
Speaker 1: rental deals and sub lease opening sword that caught my attention.
Speaker 1: Also Virtue Financial they're heading to Florida. So we've seen
Speaker 1: a wave of financial firms setting up bases outside Manhattan.
Speaker 1: And then earlier this month he had Goldman wing plans
Speaker 1: to house a key division in South Florida. So a
Speaker 1: lot going on. Meantime, Black Rock is really planning its
Speaker 1: feed firmly in Manhattan and still plans to move its
Speaker 1: New York City workforce to new offices in Hudson Yard.
Speaker 1: So just some of the Yinnan gang going on. Let's
Speaker 1: get into this with Daniel de la Vega. He is
Speaker 1: president of One Southeby's International Reality. He joins us on
Speaker 1: the phone in Miami. Daniels, So nice to have you
Speaker 1: here on Bloomberg. So what are you seeing in terms
Speaker 1: of the migration south? Which isn't a new one, but
Speaker 1: it does feel like it has picked up some moment
Speaker 1: as a result of COVID. Thank you, Carol, So happy
Speaker 1: to be nice to have you here, so thank you,
Speaker 1: thank you. So like colony like virtue that you guys
Speaker 1: just mentioned. It's one company after another. Blackstone just signed
Speaker 1: a forty one square foot least Starwood is doing their
Speaker 1: hundred and forty four thousand square feet on Miami Beach,
Speaker 1: And we're experiencing something that we've never experienced before, quite frankly.
Speaker 1: And we've always had the no personal income tax, we've
Speaker 1: always had a lower corporate tax rate, we've always had
Speaker 1: no state income tax. But because of the pandemic, because
Speaker 1: of these companies realizing that they don't have to be
Speaker 1: all the time in these offices, they're all relocating to
Speaker 1: South Florida. And it's been a boom like we've never
Speaker 1: experienced before, and I don't really see it flowing down,
Speaker 1: and it's incredible to be living here and seeing this happen. Well.
Speaker 1: What's interesting, though, is that I think it's fair to
Speaker 1: say that there are a lot of people who work
Speaker 1: at New York financial firms that like living in the
Speaker 1: New York metro area. They like New York City they
Speaker 1: like the New York City suburbs. So I do wonder about,
Speaker 1: you know, in terms of the people who are moving down, Um,
Speaker 1: is it everyone? We heard from the Goldman Sack CEO
Speaker 1: earlier this year that he expects by the end of
Speaker 1: the year to see his workers back here in offices
Speaker 1: in New York City. So who is it, you know moving?
Speaker 1: Is it smaller boutique firms? I mean, you did mention
Speaker 1: I think it was did you say black Rock or
Speaker 1: Blackstone that's actually moving down Blackstone Blackstone? So so you're
Speaker 1: seeing right now divisions of some of these larger corporations.
Speaker 1: So Goldman is going to move their asset management department,
Speaker 1: or at least there's rumors that they're going to move it.
Speaker 1: So I guess they're dipping their toe sort of here
Speaker 1: in the sand. No pun intended to see if they
Speaker 1: like it, to see if they can actually attract a
Speaker 1: good talent pool. But we we are seeing it happen
Speaker 1: more and more, and and we really believe that it
Speaker 1: is going to continue. And yes, some of the smaller
Speaker 1: we're seeing this movement now of tech firms, and some
Speaker 1: of the tech firms are smaller firms, although some of
Speaker 1: The buyers of some of these residential properly properties are
Speaker 1: large time, very very large tech executives like Keith Rabbos,
Speaker 1: who's with PayPal, Square LinkedIn, etcetera. He moved from San Francisco.
Speaker 1: So we're seeing a little bit of both, a little
Speaker 1: bit of both. Yeah, it's it's kind of interesting to see. Um.
Speaker 1: Having said that there's great cities like Miami, there's great
Speaker 1: cities like Chicago, like l A, like San Francisco, like
Speaker 1: New York. Do you anticipate, as someone who follows um
Speaker 1: the real estate market, that we're going to see a
Speaker 1: demise of some of those big cities or not necessarily.
Speaker 1: Maybe there's a little bit of a rework for a
Speaker 1: little bit, but ultimately when we get on the other
Speaker 1: side of this, what do you expect? You know, what
Speaker 1: we've predominantly seen is New York to try State Area
Speaker 1: in New York. And again it's a little bit of both.
Speaker 1: When I say what I'm about to say, you've got
Speaker 1: a lot of large hedge funders, investment bankers that are
Speaker 1: moving down and saying this is temporary, this is a
Speaker 1: three or four year moved for me because I need
Speaker 1: to be in Manhattan, private equity deals are done in Manhattan,
Speaker 1: their ton out in the hand into the summer, etcetera.
Speaker 1: So that's where I need to be. And unless these
Speaker 1: companies dip their toes in the sand, really like what
Speaker 1: they see and then move the entire organization, I think
Speaker 1: you will see a bit of that migration kind of
Speaker 1: heading back north as things start to um normalize a
Speaker 1: little bit. But look, for us, it's great that they're coming,
Speaker 1: that they're realizing what a great place it is here
Speaker 1: in South Florida and that they can actually work here
Speaker 1: and operate out of here. And I think that the
Speaker 1: way we're operating as businesses will continue to be a
Speaker 1: bit more virtual. I think that Zoom is going to
Speaker 1: be something of the future and that is the way
Speaker 1: that transactions are going to take place, and everything's moving
Speaker 1: to a more e sech platform and it's just going
Speaker 1: to embrace everything that's happening. Who's buying properties on a
Speaker 1: global scale right now when it comes to South Florida
Speaker 1: and the proper and the and the markets that you
Speaker 1: play into, Oh my god, it's so many people. So
Speaker 1: it just went public today. We just broke it a
Speaker 1: deal for Randy Gerber and Cindy Crawford on North Bay
Speaker 1: Road on Miami Beach, which was pretty interesting for a home.
Speaker 1: I'm assuming resident here for a residential home. Yeah yeah,
Speaker 1: yeah uh. Same with Tom Brady and just Sell. They
Speaker 1: bought an Indian Creek, which is great. And we spoke
Speaker 1: a little bit earlier about Goldman Sachs. I mean, those
Speaker 1: are celebrities. We spoke a little bit earlier about Goldman
Speaker 1: Sachs and Douglas Sacks, the managing director there. He he
Speaker 1: bought a home for twelve million dollars on Miami Beach.
Speaker 1: Um John Oranger, who's the founder of Shutterstock, he bought
Speaker 1: a home for forty two million dollars on Miami Beach.
Speaker 1: Sam Nasarian in the hospitality industry just closed on something
Speaker 1: in Gables the States and Coral Gables. So it's all industries, celebrities, everybody.
Speaker 1: It just seems like, you know, South Florida is the
Speaker 1: spotlight of everything, and we've spoken about Miami, but it's
Speaker 1: really happening in Dave, Broward, Palm Beach, all of South Florida,
Speaker 1: I mean Miami, Dave County, year over years up over
Speaker 1: thirty Broward forty two, the Island of Palm Beach over fifty,
Speaker 1: So you're blended at over almost throughout South Florida. And
Speaker 1: this is on single family homes and condominiums. Um. So
Speaker 1: the increases that we've been experiencing are crazy, and it's
Speaker 1: we've had almost like this reset Carol of pricing. I mean,
Speaker 1: you've got homes that are up fifty in some of
Speaker 1: these luxury neighborhoods and you're looking at these houses that
Speaker 1: are now trading for twenty that pre pandemic, you couldn't
Speaker 1: get ten million for them. And it's just become the
Speaker 1: new norm. And we've had this this now reset of
Speaker 1: pricing that that is what the numbers are. So it's
Speaker 1: just yeah, there's some deals over a hundred million that
Speaker 1: are going to be done before this quarters over. You
Speaker 1: talking about residential or no, you're talking about commercial now
Speaker 1: residential residential? Yeah, I mean commercials on fire as well.
Speaker 1: We run a commercial firm that's called One Commercial. I mean,
Speaker 1: the demand for office right now is strong. In the
Speaker 1: Brickle Downtown corridor. You've got triple net numbers around forty
Speaker 1: five sixty four dollars a square. It's forty five to
Speaker 1: sixty five dollars a square foot. That's the range um
Speaker 1: and there's over I would say a million square feet
Speaker 1: right now in a man for office space in these areas.
Speaker 1: So it's not only people buying these these residential homes,
Speaker 1: they're also looking to move their headquarters Daniel, at least
Speaker 1: divisions within these courts. Is it a trend that would
Speaker 1: have happened if we didn't have COVID or is there
Speaker 1: is this the COVID factor. I think it's the COVID factor.
Speaker 1: I really think it's the COVID factor. Like I said earlier,
Speaker 1: I mean we've always had had, you know, a strong
Speaker 1: migration from the northeast from Canada. We started to see
Speaker 1: a little bit of California in tech to service Latin America, etcetera.
Speaker 1: But it really is the COVID factor. I mean, in
Speaker 1: March and April, we didn't know what was going to happen.
Speaker 1: And then come May, June, July, which are typically our
Speaker 1: slowest months, they were our strongest months. We were up
Speaker 1: over a hundred in July alone. So it happened, and
Speaker 1: it happened very quickly. Well, and when I you know,
Speaker 1: when I kicked this off and we started talking about
Speaker 1: who's buying and you said, you know a lot of
Speaker 1: people are buying. Um it used to be a lot
Speaker 1: of I feel like foreign or non US investors and buyers.
Speaker 1: What are we seeing from Europe, What are we seeing
Speaker 1: from Latin America, What are we seeing from Asia? It's
Speaker 1: pretty dry. So we traditionally, especially in our new condominium division,
Speaker 1: we saw a lot of what we would call flight
Speaker 1: capital from Latin America, and that has just dried up
Speaker 1: because of everything that's happening in the respective economies up
Speaker 1: down in Latin America. So we we have just seen
Speaker 1: the domestic buyer, I mean, and because of you know,
Speaker 1: the low interest rate environment, we've also seen a lot
Speaker 1: of refinancing. So that's of course helped sort of spur
Speaker 1: the market forward. But it's really been the domestic buyer
Speaker 1: from the Northeast, from California that's been relocating here Boston, Washington, Chicago.
Speaker 1: We just did a deal. We're representing one thousand Museum,
Speaker 1: which is in downtown Miami Asahahadeed building. We just did
Speaker 1: it deal for fifteen million dollars over fifteen hundred of
Speaker 1: square foot or sixteen million, fifteen hundred of square foot
Speaker 1: to a buyer from Chicago. So it's just it's it's
Speaker 1: it's incredible what's happening. So okay, I'm going I just
Speaker 1: kind of put a if you weren't in Florida and
Speaker 1: this wasn't the market you were playing in right now
Speaker 1: when it comes to and selling and and working with
Speaker 1: in um, if it wasn't South Florida or Florida, where
Speaker 1: would it be that you would want to be working
Speaker 1: in me? In New York City? I think that there's
Speaker 1: see I I go to New York City often with
Speaker 1: my family for business, etcetera. We love it, and my
Speaker 1: wife and I this year we're talking about how sad
Speaker 1: it was. She does a girl's trip actually every Christmas
Speaker 1: to New York and they couldn't go. And then some
Speaker 1: of my buddies and I were talking on New Year's
Speaker 1: about when, when, when is the right time to go
Speaker 1: back to New York And I hope it's very soon.
Speaker 1: But from a business perspective, I heard you say earlier
Speaker 1: and I agree with you. Prices, especially on the condominium
Speaker 1: front and the new developments have not gone down the
Speaker 1: way you've expected then two or the way we've expected
Speaker 1: them to help kind of firm and you are seeing
Speaker 1: some deals get done thirty forty million. But I do
Speaker 1: believe there will be opportunity, and I think that it's
Speaker 1: it's it's the it's the intelligent thing to do to
Speaker 1: be investing right now. And then yeah, that's what people
Speaker 1: have said, it's great opportunities. The median price have previously
Speaker 1: owned homes that changed in the fourth quarter just down
Speaker 1: about one and a half percent by Miller Samuel and
Speaker 1: you know, just looking at those Manhattan home shoppers, people
Speaker 1: who are selling are not cutting their prices at this point. Um,
Speaker 1: Daniel is so great to check in with you. Um,
Speaker 1: be well and hopefully we'll check in again throughout the
Speaker 1: new year. Daniel de la Vega, President at One Sotheby's
Speaker 1: International Reality, on the phone from Miami.