Related Ross Plans ‘Big Push’ To Bring Defense Tech Firms To West Palm Beach

As Stephen Ross delves deeper into West Palm Beach, his company, Related Ross, has increasingly attracted new companies in industries from financial to law services. 

Defense technology is next on the list.

U.S. lawmakers are in the midst of pushing the country’s defense systems to become less dependent on other countries.

With West Palm Beach’s proximity to the Space Coast region, southern commands in Tampa and Miami, and a defense tech industry already cemented in Jupiter, Related Ross is looking to capture a slice of the action, Executive Vice President Jordan Rathlev said at Bisnow’s Palm Beach State of the Market event on Dec. 4.

“We're going to do a big push in defense and defense tech in this region,” Rathlev said on stage at Related Ross’ Hilton West Palm Beach. “... We've seen a lot of interest on that front as well, and I think you'll start to see the evolution of the different types of industries here.”

In the last year, U.S. defense technology startups have doubled their share of Pentagon contracts, from less than 1% last year to 1.3% this year, developing fighter jets, drone boats and artificial intelligence-driven software, Reuters reported.

Their contracts may continue to grow, especially since a U.S. military spending bill was released on Monday that would amend the National Defense Authorization Act. It would require the Pentagon to end its reliance on other countries, like China and Russia, for electronic display technology over the next five years, Reuters reported.

If passed and signed into law by President Donald Trump, it would also require the Pentagon to map out needs for things like handheld electronics to fighter jets until 2040. 

A new focus on defense tech in Palm Beach would add to the area's growing company base of financial firms, law firms and tech firms.

Ross, owner of the Miami Dolphins, founded development giant Related Cos. before spinning off the West Palm Beach holdings into his own company, where he then pledged to spend $10B to turn the city into the “Wall Street of the South.”

The company has 1M SF of office space under construction.

At a Bisnow event last year, Related Ross Vice President of Leasing Greg Kuhlman said the company was working to expand its reach from financial service firms to technology companies to make West Palm the “next Silicon Valley.”

On top of bringing in second headquarters and satellite offices for larger companies, a game-changer for West Palm Beach’s growth could be in the startup field, including in defense tech.

Ross has invested in that opportunity, launching a program with eMerge Americas and the Florida Council of 100 for fintech and dual-use and defense tech startups, according to a release.

“If we could create a culture here where we ultimately have one or two unicorns that are West Palm Beach-native companies that make it big, they go public, and they can say, ‘We started in West Palm Beach, we went public, and we're growing in West Palm Beach,’ that would be an amazing opportunity,” Rathlev said.

To further diversify the city’s economy, the city, county and state should provide more support and position the state not only as a vacation destination but also as a business destination, Rathlev said.

“We have not been as competitive as Texas, Tennessee [and] North Carolina on the incentive side of it,” Rathlev said. 

He referenced the deal with ServiceNow, an enterprise software company that signed a more than 200K SF lease with Related in September.

The company received a $2M grant from West Palm Beach to help establish its regional headquarters and an AI institute at the under-construction 10 CityPlace office tower in West Palm Beach.

Companies and executives are attracted to the Sunshine State, Rathlev said, but an eternal summer doesn’t always win against rising costs.

“When a company pulls out the book and says, 'Where are we going?' we should be top five on that list every time, and then once they're here, we tend to always win,” he said. 

The company delivered its One Flagler office building in February at 95% leased to financial firm tenants like Vista Investments of Florida, GoldenTree Asset Management and Ocean Sound Partners.

The billionaire CEO has also committed $50M to Vanderbilt University’s upcoming West Palm Beach campus, which is expected to offer graduate-level programs in AI, data science, computer science, business administration and finance.

“I think at the end of the day, we need an economy that's robust and diversified,” Rathlev said. “So, having financial service firms, technology firms, defense tech firms, healthcare firms [and] education-based initiatives are all important to the long-term longevity of what we're doing.”