Blackstone Move Solidifies Miami Mayor’s Vision For A Global City
The dream of Miami Mayor Francis Suarez to have the city turn into a global destination for talent and investment is coming to fruition.
Blackstone, a private equity investment firm, has set its sights on opening a Miami outpost as the nation’s largest investment managers continue to migrate to South Florida. Its plans surfaced as the city is in the process of reinventing itself.
“There’s a misperception that we’re about only nightlife and tourism,” Suarez told Walker & Dunlop CEO Willy Walker on the latest Walker Webcast. “Blackstone’s new headquarters shows we’re a tech city with a diversifying economy.”
That economy could be bolstered by 215 new employees who will reportedly earn an average salary of $200K.
Miami was projected to bear the financial brunt of the coronavirus pandemic more heavily than other U.S. cities as Americans stayed put because its economy is centered squarely on tourism. With bars and nightclubs shuttered, the damage was severe, and the unemployment rate in Miami-Dade County leapt from 3.8% in February to 11.9% in March.
But even with its glut of hotels, Miami has managed to find its feet.
According to research from Wharton professor Peter Linneman, Miami has brought back 50% of the jobs it lost as a result of the coronavirus, putting the city behind only four others in the U.S. in percent of jobs recouped. Suarez credited that achievement to the “entrepreneurial spirit” of the people of Miami and mentioned that opening up city streets to restaurant seating has let much of the business of the city continue.
Cruise operators have now been given the green light to begin taking boats out of Miami harbor again, and Florida Gov. Ron DeSantis has pushed the state to Phase 3, which allows for bars and nightclubs to open their doors. While these industries could be an economic jolt for Miami, Suarez stressed the importance of wearing masks and said Floridians would have to remain disciplined and enforce the good habits that have let their case numbers fall after a statewide spike over the summer.
“What the governor has done throughout the crisis is give [Miami-]Dade County liberty to go at its own pace,” Suarez said. “Miami is by far the densest city in the state, and the risks are different here."
Suarez noted that construction never stopped in Miami, and cranes still dot the skyline as projects backed by investors from around the world rise up from the sand. But the same forces that have put Miami on the global commercial real estate map have created their own problems.
In 2019, 6 out of 10 employed adults in Miami were housing cost-burdened, meaning they paid more than 30% of their income toward housing — the highest such rate of any U.S. metropolitan area. Now, with unemployment still sky-high, and prices for single-family homes spiking, the city has to take a hard look at its past housing shortcomings and plan for a more inclusive future.
“We are in some ways the victims of our success,” when it comes to development, Suarez said. “When you have an abundance of capital chasing finite asset — land — that pushes prices up and forces us to be creative with the properties that we own as a city and county to create more affordable housing.”
Walker said that Miami faces another, perhaps even greater, existential crisis in the form of climate change, which has created a record-breaking hurricane season and threatens to submerge South Beach within the coming decades. Suarez pointed to a $400M initiative dubbed Miami Forever that is aiming to overhaul the city’s infrastructure and prepare it for the devastating effects of sea level rise.
“We’re one of the first cities and one of the only cities taking climate change seriously,” Suarez said. “Miami voters approved the tax themselves. We want to make sure Miami is here for our children and our children’s great-grandchildren.”
Suarez expressed his confidence that Miami would bounce back from the current crisis, based on just how quickly the city was growing during his first years in office in 2018 and 2019. While the pandemic may have inspired some new residents to move to Miami, he expected that the state’s business-friendly tax structures were a likelier motive. He called on leaders from both Florida and New York to put aside their political differences and face the pandemic together. DeSantis and New York Gov. Andrew Cuomo traded travel bans and harsh words as each saw a spike in the other's state’s rate of COVID-19 infections.
“We’re not blind to the presidential election and the heightened partisanship,” Suarez said. “But we need to get past this one-upmanship. In terms of travel, there’s no particular threat that a person from Miami presents to New York, just like there’s no particular threat that a New Yorker presents to Miami.”
This feature was produced in collaboration between the Bisnow Branded Content Studio and Walker & Dunlop. Bisnow news staff was not involved in the production of this content.