Stephen Ross: Miami Must Address Quality Of Life 'Issues' Because Growth Isn't Stopping
Billionaire developer Stephen Ross, whose Related Cos. is developing giant office towers in Miami and West Palm Beach, says South Florida will have to endure inevitable growing pains as its economic boom shows no signs of a slowdown in 2023.
“I think South Florida and the economic environment that comes out of Tallahassee will continue to attract businesses,” Ross said at the Urban Land Institute's Miami summit held on Wednesday at the JW Marriott Marquis in Brickell. “There will be an impact in Miami on the quality of life, and we will need to adjust to that and make it better.”
Ross spoke on stage with Swire Properties President Kieran Bowers, with whom Related is co-developing One Brickell City Centre, a 1.6M SF office high-rise slated to be the tallest commercial tower in Florida.
“There are a lot of issues that Miami will have to deal with,” Ross said, pointing out that transportation is one of the main concerns severely affecting the city’s current and incoming growth.
“When you are looking and trying to attract companies here — because all of the growth will be external growth — they are looking at schools, medicine, recreation and how close they are to their residences.”
To keep up with the influx of out-of-town firms and talent, Tri-Rail announced last month that in 2023 it plans to kick off nonstop rail services from West Palm Beach to Miami, while the Brightline train is finalizing new terms with Dade and Broward counties to expand services and is opening new stops this month.
So far this year, Miami-Dade County has seen 57 companies relocate or expand into its borders according to the Miami-Dade Beacon Council’s annual report released last month. About 150 more companies are in the pipeline, according to the Beacon Council, which functions as the county’s economic development arm.
Ross, who graduated from Miami Beach Senior High after his family moved from Detroit, said the wider business world is only now seeing the appeal of Magic City, where he has been active for decades.
For nearly all of that time, he has been a partner with Related Group founder Jorge Perez, one of the most prolific condo developers in South Florida. Ross said on stage that a partnership he was in “just kind of split recently, very amicably." He was referring to his investment in Related Group, The Real Deal reported.
Ross has increasingly been playing by himself in his longtime friend's sandbox — along with the Brickell tower, Ross is spearheading seven office projects in West Palm Beach, led by One Flagler, which has become known as the Hedge Fund Tower. He said at the summit that in the last 18 months, Related Cos. has secured 72 leases for 1M SF combined throughout his projects in West Palm Beach.
He bought the site of the former Deauville Hotel on South Beach and planned a two-tower development designed by Frank Gehry before Miami Beach voters rejected his plans in a referendum last month. He also bought the Monterra affordable housing complex in Cooper City near Fort Lauderdale International Airport last month.
Ross has long been a central figure in his own right in Miami as owner of the NFL's Miami Dolphins and Hard Rock Stadium. Related is the lead developer of New York's Hudson Yards, the largest private mixed-use development in the country.
But Miami is increasingly the firm's focus. At One Brickell City Centre, construction is expected on a speculative basis next year, and Ross and Bowers expect to lease 25% to 40% of it between now and 2025 when it is scheduled to be delivered.
Brickell has seen some of the fastest-rising office rents in the country — 42% in the third quarter, according to JLL — despite an existential crisis for office properties in most other parts of the country.
“Things won’t constantly keep going up, but the angle of growth has changed,” Bowers said. “We are not going back to $50 rents. This demand has substance.”
Ross said the market's “growth has been phenomenal, and I don’t really see it ending," even though he noted that commercial real estate has slowed down on the whole.
“I believe in Miami,” Ross said. “It’s such an exciting place and I think people are recognizing that. The growth will continue.”