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Miami gets a new nickname: “Wall Street of the South”. The title reflects the diaspora of banks and financial institutions to Miami over the past three years.
The most recent situation occurred in June of this year, when tycoon Ken Griffin revealed that he would migrate the operations of his multinational hedge fund, Citadel, from Chicago to Florida.
In 2020, at the height of the pandemic, two other large funds had already decided to base their divisions in Florida: Icahn Enterprises and Elliott Management. A little later, Goldman Sachs also followed suit.
Brazilian banks also seek to expand their operations in the city, with an eye on the national public that seeks to diversify investments and dollarize part of their assets. Recently, Itaú acquired part of the Avenue brokerage in Miami and Banco Bradesco doubled its operations in the city of Florida in a single year.
Not only financial institutions seek the “Sunshine Estate” in search of a friendlier tax environment and quality of life for their employees. The city of Miami also won the title of “New Silicon Valley”, due to technology companies migrating to the region, and also the title of “Manhattan of the South”, especially due to the transformation through which the central neighborhoods of Miami, like Brickell, are passing.
Understand in this article why large corporations and financial institutions are migrating their operations to Florida and the impacts of this movement on the local real estate market.
Business Friendly Environment
The more tax-friendly and “business friendly” environment is the main factor for companies to migrate their divisions to Florida. The state, unlike most other US states, does not charge a so-called “State Income Tax”. Only federal income tax is levied.
This fiscal characteristic is a considerable differentiator for large corporations.
This advantage has always existed in Florida, but companies were reluctant to migrate their operations, for fear of losing their employees or even fear of compromising the organizational culture. However, during the pandemic and the advent of remote working, hundreds of thousands of people decided to work remotely in Florida, in search for a better quality of life. The move made the decision to migrate easier for several companies.
In addition to the fiscal issue, Florida is seen as a less bureaucratic region from a corporate point of view, unlike states like California and New York. In this context, Miami Mayor Francis Suarez and Florida Governor Ron DeSantis are constantly working to attract new companies and create an enabling environment to welcome them.
Francis Suarez has a special role in this transformation. He wants to turn Miami into the new US technology hub. He is actively working to attract Silicon Valley companies.
Three of the fastest-growing regions in the US in 2021 are in the state of Florida, which welcomed more than 210,000 new residents between July 2020 and July 2021. Projections estimate that Florida will welcome 849 new residents per day by 2026.
The influx of new residents from other US states has always existed, but it exploded during the pandemic. With the advent of remote work and more lenient policies during the pandemic, the “Sunshine Estate” (Sunshine Estate, as Florida is nicknamed) has been attracting more and more people in search of the quality of life and tax benefits.
Central Florida is also sought after by large corporations
Central Florida, where the city of Orlando is located, is also one of the preferred areas for companies to host their divisions.
Cities around Orlando, such as the planned community of Lake Nona, are prominent in this movement. The Disney Group announced that it intends to move part of its operations there, which would bring more than 2000 employees and their families to the region.
Auditing and consulting giant KPMG is another example. It already has a campus in Lake Nona.
New residents pressure demand for real estate
Such a large number of companies and employees migrating to the region would have no other consequence than the pressure on the demand for real estate. The move projects very high upside potential for Florida’s real estate sector, as it will take some time for builders to deliver new residential units.
About AMG International Realty
AMG International Realty is a global real estate company specializing in Florida. If you want to know more about real estate opportunities in Florida, contact me right now and chat with me on WhatsApp: +1 305 318 6968 (Heloisa Arazi).