'Tax The Rich' Politics Boosting South Florida's Office Construction Pipeline
New office construction has trailed off nationwide, but business-friendly politics are allowing South Florida to buck the trend.
There was more than 1.4M SF under construction in Palm Beach County at the end of the first quarter, up more than 400% year-over-year, according to Cushman & Wakefield. Only Midtown Manhattan, Dallas and Los Angeles had more office space going up at the end of March.
A large share of the upcoming supply there is being built by billionaire developer Stephen Ross' Related Ross, which has leveraged the state's low-tax, low-regulation environment to court business leaders from blue states who are fretting about a wave of left-wing political victories.
“You look around the country, you see California, Washington, New York, Massachusetts: They're talking about wealth taxes, they’re talking about political actions that create uncertainty or unpredictability for business growth,” Related Ross Executive Vice President Jordan Rathlev said.
“In the state of Florida today, whether it’s sustainable or not, the discussion at the legislature obviously could be reduced or eliminated property taxes.”
Of the 150 leases Related has signed in the Palm Beach area over the last five years, he said 85% were relocations from out of state.
The deals kept Palm Beach's overall vacancy rate at 13.5% last quarter, far below the nationwide average of 20.2%, according to Cushman.
Another 500K SF is under construction in Miami as developers build out more space to accommodate the corporate migrants — a contrast to the rest of the country, where office development is at a 14-year low.
Seventy-four companies relocated their headquarters to Florida between 2020 and 2025, which was more than anywhere else in the country, according to JLL. Another four followed suit in the first two months of 2026 alone, according to a Bisnow analysis.
One of Related’s newest tenants in West Palm Beach is ServiceNow, a California-based cloud computing company that has secured 220K SF there for its second headquarters.
Wells Fargo is taking 50K SF at a Related space to move the entirety of its wealth management team to West Palm Beach.
When it comes to leasing decisions, highly charged political conversations are more important than the actual policies lawmakers pass, Rathlev said.
“In Florida, they have to kind of fully vet the economic impact [of the property tax proposals], but for us, it's the perception,” he said. “That's what the discussion is.”
In November, voters will decide whether to approve property tax exemptions of at least $250K for residents who have owned homes in Florida for five years or more, which would effectively eliminate property taxes for roughly 92% of Florida homes.
The proposal, backed by Republican Gov. Ron DeSantis, is worlds away from what’s happening in Boston and New York City, where rent control and efforts to raise taxes on the wealthy have drawn the ire of some business leaders.
“Even if these ballots don't pass in California or New York, that is the mindset,” Rathlev said. “Something could come back in a new iteration.”
New York last month passed a levy on second homeowners with properties worth more than $1M after New York City Mayor Zohran Mamdani drummed up support with a “tax the rich” video filmed in front of Citadel CEO Ken Griffin’s record-breaking $238M Midtown apartment.
The billionaire hedge fund executive responded in part by stating Citadel would focus on Miami instead of the Big Apple. Griffin plans to start construction this year on a supertall office tower in Brickell, near where he moved Citadel's headquarters after the company was founded in Chicago.
“In reaction to New York, we filed a permit with the city of Miami. We’ve added several hundred thousand square feet of new space in our new building,” Griffin said last month.
Griffin, who tapped Related Cos. — which Ross founded and where he is still nonexecutive chairman — to help develop the tower, had initially proposed including a hotel at the base of the building but is now moving forward with a 1.7M SF office tower with some ground-floor retail, Commercial Observer reported.
“We will add far more jobs in Miami over the next decade as an immediate and direct consequence of the mayor’s poor decision here, with respect to his posting of that video,” Griffin said.
