Magic City Tech Boom? Microsoft In Negotiations At 830 Brickell And Elon Musk Wants To Build Tunnels Under Miami

Miami, the magic city, is on track to become the next Silicon Valley as the fallout from the COVID-19 pandemic has brought people flocking to South Florida. Florida saw the second highest population growth over any other state in 2020, following Texas, adding over 240,000 new residents in a single year. The influx of new residents is being driven by those looking to take advantage of remote-working opportunities or seek a state that has let business remain open and has pro-business tax structure. This has led to Miami and Palm Beach real estate pricing and absorption reaching near record highs.

Not only are the new residents flocking from the high-tax New York, at the same time as South Florida’s population boom, the San Francisco Bay Area has seen an exodus of venture capitalists and tech entrepreneurs. Mayor Francis Suarez has opened up the city to tech entrepreneurs and has expressed interest in bringing innovative companies to the magic city and making Miami a global tech hub. Mayor Suarez recently announced he will be appointing a Chief Technology Officer for the city.

Miami’s office market is being a surge in demand and setting record high pricing. Microsoft (NASDAQ: MSFT) is one of the major tech firms looking to move to Miami, the multinational software provider is actively in negotiations to lease 30,000 square feet of space at OKO Group’s 830 Brickell, a 56-story office tower adjacent to Brickell City Centre which is currently under construction. Pricing is still relatively cheap compared to other major markets, asking rates at 830 Brickell are reportedly in the $70’s PSF range. Ken Griffin’s Citadel Securities hedge fund is also reportedly looking at office space in 830 Brickell as is the Chicago-based law firm Baker McKenzie.

The biggest news came when Tesla and SpaceX founder Elon Musk tweeted that he had talked with Florida Governor Ron DeSantis about building a tunnel system underneath Miami to eliminate traffic and pollution. Mayor Suarez tweed that “we will do it,” and invited Musk to visit him at City Hall. In the past Miami has had success building tunnels at a comparatively low cost. The initiative would be led by Elon Musk’s Boring Company, who is getting ready to reveal the Vegas Loop to the public, a 4,475’ tunnel loop under the Las Vegas Convention Center. In the Las Vegas Loop passengers will reach speeds up to 155 mph and will ride in Tesla Model X’s, Model 3’s, and a 16-passenger modified Model 3. Las Vegas in now working with the Boring Company to build a citywide network of tunnels.

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Florida Named Second Fastest Growing State Averaging 900 New Residents Per Day

Florida has been named the second fastest growing state according to the United States Census Bureau, trailing only Texas. Florida added 327,811 new residents between July 1, 2016 and July 1, 2017, about 900 new residents per day. The recent influx of new residents has been bolstered by northern states extreme tax and financial struggles as local and state politicians continue to tighten the tax noose on residents. Florida has no income tax, which has attracted wealthy families and individuals from states like Connecticut, New York, New Jersey, and Massachusetts, amongst others at breakneck speed. Hedge fund big wig Paul Tudor Jones of Tudor Investment Corp. moved from Greenwich, Connecticut to Florida in 2015 after Connecticut passed two of the largest tax increases in history between 2011 and 2015, taking with him over $30 million in income tax revenue. In September 2016 PROFILEmiami reported that Barry Sternlicht, CEO of Starwood Capital Group and chairman of Starwood Property Trust, also fled Connecticut to become a Florida resident. Florida now has 1.1 million more residents than New York and is growing at a pace twenty five times faster than its northern counterpart which added only 13,113 new residents last year despite local claims the state is experiencing great growth. Florida is now the third most populous state behind only California and Texas. Now, Florida once again stands poised to continue and even accelerate growth as the Tax Cuts and Jobs Act of 2017 essentially makes Florida the model on which states should tax their residents. On December 22, 2017, President Donald Trump singed into law the Tax Cuts and Jobs Act of 2017, after the bill was passed by the United States Congress. The bill caps taxpayer's ability to deduct state individual income, sales and property taxes up to a limit of $10,000 starting in 2018. The current deduction was unlimited, allowing high tax states like New York to shift tax revenue from the federal government to state and local government. While residents of these high tax states have for years cautioned local politicians from continuing to hike taxes, taxes have continued to rise and the elimination of the SALT Deduction now makes it much more expensive to live in these states. As the effects of the tax cuts begin to be seen Florida's rapid population rise should be poised to continue through 2018.  

Miami Top Major U.S. City in 2016 For International Immigration

The Miami Metropolitan area was the top major U.S. city market in 2016 for international immigration. The year-over-year growth for the area was 1.1%. Miami is also reportedly the number one U.S. city for foreign born working professionals and those holding college degrees. This influx of immigration has helped bring equilibrium to a market that many thought may have been overdeveloped. This has led to rising housing prices, rising rents, low vacancy rates and rising record employment numbers.