Ken Griffin just set a new standard for Wall Street firms looking to make the move south.
Goldman Sachs Group Inc. and Point72 Asset Management set up shop in a Related Cos. building in West Palm Beach. Dan Sundheim’s D1 Capital Partners leased space from Related Group in Miami’s trendy Coconut Grove neighborhood. Private equity giant Apollo Global Management Inc. took over a temporary office from law firm Greenberg Traurig LLP before locking down a long-term deal across the Miami River at 701 Brickell Ave.
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Griffin, 53, the billionaire founder of Citadel, one-upped them all, pledging to build a pristine office tower in Miami with developer Sterling Bay that will serve as the global headquarters of his hedge fund and market maker.
While the process will take several years, creating a structure from the ground up along the waterfront in Miami’s business district is a new level of commitment from the titans of Wall Street, which have flocked to South Florida as employees gravitate toward its warm weather and lack of state income tax. Citadel’s ambitions could accelerate the plans of other banks, private equity firms and hedge funds looking to bolster their presence in the region.
Meanwhile, Griffin has already moved to Miami with his family, raising the prospect of him spreading his $28.9 billion fortune around Florida, where he was born and raised, as he has for years in Chicago.
“The ramification of this lease will be felt across the whole Miami market,” said Erik Rutter, co-founder of New York-based development firm Carpe Real Estate Partners. “You’re going to see similar caliber tenants” coming to the area.
The South Florida office market has been gaining momentum over the past two years, as scores of business leaders and employees relocated from places like New York, Chicago and San Francisco. Office leasing has surged across Miami and West Palm Beach, pushing up rents. That’s also driven heightened demand for housing and schools in the region.
Griffin’s company had been looking to lease between 200,000 and 300,000 square feet (18,580 to 27,870 square meters) in Miami, according to a person familiar with the matter who asked not to be identified citing private conversations.
Citadel said it expects a few hundred people to be based in Miami next year, with some at the company already working from temporary offices at the Southeast Financial Center. The firm employs more than 1,000 people in Chicago. The mayor’s office called the news of Citadel’s move “disappointing” and thanked them for their contributions to Chicago.
Miami Mayor Francis Suarez said Griffin is “already an invaluable stakeholder of our community,” citing the $5 million he gave the city to help respond to disasters such as hurricanes. Citadel’s headquarters shift cements Miami as a hub for financial companies, according to developer Don Peebles.
Read the full article here by Natalie Wong, Amanda L Gordon, Advisor Perspectives.
