Editor’s note: Miami mania

National Issue /
Jan.January 18, 2021 04:30 PM

Stuart Elliott

It seems like the whole world is heading south for the winter — and staying there.

Since the pandemic hit, South Florida — despite seeing an enormous number of Covid cases — has benefited with rarely a day going by without news of a mammoth luxury sale or prominent company relocating some of their employees from elsewhere in the country.

In our cover story this month, we explore an idea that has gained currency in recent weeks as Miami’s fortunes have surged: Can the city capitalize on its growth to eventually become a tech hub? Maybe even the next Silicon Valley?

Prompted by Miami Mayor Francis Suarez, a real estate attorney who took office in 2017, the idea went viral last month.

As reporter Katherine Kallergis writes, a principal at venture capital firm Founders Fund threw out a proposal in early December to move Silicon Valley to Miami. Suarez quote-tweeted the investor, asking, “How can I help?”

The response went viral with more than 2 million impressions and thousands of likes. The mayor compared it to “catching lightning in a bottle.” More importantly, “Suarez was suddenly in conversation with major venture capitalists and tech executives from around the country, grateful for a friendly ear in what has become a political climate openly hostile to Big Tech,” Kallergis writes.

While some are optimistic, others see it as unlikely, labeling it “the latest real estate hustle” in Miami. We explore the idea — and what’s next for Miami’s real estate market overall — in our story.

In another big piece, we dive into the fallout in the country’s multifamily market amid the pandemic. While office landlords have taken a huge hit, hotels have been slammed, and the already suffering retail sector has faced even bigger challenges, the market for rental buildings has performed better than expected.

The number of people paying their rent mostly has held up, and there have been fewer distressed properties as a result. But the real pain could still be ahead, hitting in the next six months to a year.

Meanwhile, it’s no secret that 2020 was (somehow) a good year for the stock market, despite steep job losses and widespread economic pain. It was also the biggest year for IPOs since 2007, and instant-homebuying startup Opendoor and home-services software company Porch.com were among the companies that debuted. Both went public in December and saw their valuations climb to $18 billion and $1 billion, respectively.

Next up is the long-awaited IPO of residential brokerage Compass. As with any startup, the earliest backers could reap the biggest rewards. Reporter E.B. Solomont breaks down who invested and who is best poised for a windfall. We also look at the biggest winners from Opendoor’s IPO, including its CEO Eric Wu, who’s now a billionaire.

Elsewhere in the issue, we look at the real estate reaction to the violence at the Capitol earlier this month. The fallout for the Trump Organization has been severe, and those in the industry are among those turning away: Cushman & Wakefield has quit leasing duties at Trump properties, and JLL backed off its assignment to sell the Trump hotel in D.C. At the same time, some real estate agents’ use of social media app Parler had sparked concerns early this month, though the app has recently been cut off by Big Tech.

Finally, don’t miss our investigative piece looking at the implosion of crowdfunding firm Prodigy Network, where investors poured in a staggering $690 million. And check out our sit-down Closing interview with Ray McGuire, the New York City mayoral hopeful who has some of the biggest business backers on his side.

Enjoy the issue.


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