ONE Sotheby's Intl. President on Real Estate

And then earlier this month he had Goldman wing plans to house a key division in South Florida. So a lot going on. Meantime, Black Rock is really planning its feed firmly in Manhattan and still plans to move its New York City workforce to new offices in Hudson Yard. So just some of the Yinnan gang going on. Let's get into this with Daniel de la Vega. He is president of One Southeby's International Reality. He joins us on the phone in Miami. Daniels, So nice to have you

here on Bloomberg. So what are you seeing in terms of the migration south? Which isn't a new one, but it does feel like it has picked up some moment as a result of COVID. Thank you, Carol, So happy to be nice to have you here, so thank you, thank you. So like colony like virtue that you guys

just mentioned. It's one company after another. Blackstone just signed a forty one square foot least Starwood is doing their hundred and forty four thousand square feet on Miami Beach, And we're experiencing something that we've never experienced before, quite frankly. And we've always had the no personal income tax, we've always had a lower corporate tax rate, we've always had

no state income tax. But because of the pandemic, because of these companies realizing that they don't have to be all the time in these offices, they're all relocating to South Florida. And it's been a boom like we've never experienced before, and I don't really see it flowing down, and it's incredible to be living here and seeing this happen. Well.

What's interesting, though, is that I think it's fair to say that there are a lot of people who work at New York financial firms that like living in the New York metro area. They like New York City they like the New York City suburbs. So I do wonder about, you know, in terms of the people who are moving down, Um, is it everyone? We heard from the Goldman Sack CEO earlier this year that he expects by the end of the year to see his workers back here in offices

in New York City. So who is it, you know moving? Is it smaller boutique firms? I mean, you did mention I think it was did you say black Rock or Blackstone that's actually moving down Blackstone Blackstone? So so you're seeing right now divisions of some of these larger corporations. So Goldman is going to move their asset management department, or at least there's rumors that they're going to move it. So I guess they're dipping their toe sort of here

in the sand. No pun intended to see if they like it, to see if they can actually attract a good talent pool. But we we are seeing it happen more and more, and and we really believe that it is going to continue. And yes, some of the smaller we're seeing this movement now of tech firms, and some of the tech firms are smaller firms, although some of The buyers of some of these residential properly properties are large time, very very large tech executives like Keith Rabbos,

who's with PayPal, Square LinkedIn, etcetera. He moved from San Francisco. So we're seeing a little bit of both, a little bit of both. Yeah, it's it's kind of interesting to see. Um. Having said that there's great cities like Miami, there's great cities like Chicago, like l A, like San Francisco, like New York. Do you anticipate, as someone who follows um the real estate market, that we're going to see a demise of some of those big cities or not necessarily.

Maybe there's a little bit of a rework for a little bit, but ultimately when we get on the other side of this, what do you expect? You know, what we've predominantly seen is New York to try State Area in New York. And again it's a little bit of both.

When I say what I'm about to say, you've got a lot of large hedge funders, investment bankers that are moving down and saying this is temporary, this is a three or four year moved for me because I need to be in Manhattan, private equity deals are done in Manhattan, their ton out in the hand into the summer, etcetera.

So that's where I need to be. And unless these companies dip their toes in the sand, really like what they see and then move the entire organization, I think you will see a bit of that migration kind of heading back north as things start to um normalize a little bit. But look, for us, it's great that they're coming, that they're realizing what a great place it is here in South Florida and that they can actually work here

and operate out of here. And I think that the way we're operating as businesses will continue to be a bit more virtual. I think that Zoom is going to be something of the future and that is the way that transactions are going to take place, and everything's moving to a more e sech platform and it's just going to embrace everything that's happening. Who's buying properties on a global scale right now when it comes to South Florida and the proper and the and the markets that you

play into, Oh my god, it's so many people. So it just went public today. We just broke it a deal for Randy Gerber and Cindy Crawford on North Bay Road on Miami Beach, which was pretty interesting for a home. I'm assuming resident here for a residential home. Yeah yeah, yeah uh. Same with Tom Brady and just Sell. They bought an Indian Creek, which is great. And we spoke a little bit earlier about Goldman Sachs. I mean, those are celebrities. We spoke a little bit earlier about Goldman

Sachs and Douglas Sacks, the managing director there. He he bought a home for twelve million dollars on Miami Beach. Um John Oranger, who's the founder of Shutterstock, he bought a home for forty two million dollars on Miami Beach. Sam Nasarian in the hospitality industry just closed on something in Gables the States and Coral Gables. So it's all industries, celebrities, everybody.

It just seems like, you know, South Florida is the spotlight of everything, and we've spoken about Miami, but it's really happening in Dave, Broward, Palm Beach, all of South Florida, I mean Miami, Dave County, year over years up over thirty Broward forty two, the Island of Palm Beach over fifty, So you're blended at over almost throughout South Florida. And this is on single family homes and condominiums. Um. So the increases that we've been experiencing are crazy, and it's

we've had almost like this reset Carol of pricing. I mean, you've got homes that are up fifty in some of these luxury neighborhoods and you're looking at these houses that are now trading for twenty that pre pandemic, you couldn't get ten million for them. And it's just become the new norm. And we've had this this now reset of pricing that that is what the numbers are. So it's just yeah, there's some deals over a hundred million that

are going to be done before this quarters over. You talking about residential or no, you're talking about commercial now residential residential? Yeah, I mean commercials on fire as well. We run a commercial firm that's called One Commercial. I mean, the demand for office right now is strong. In the Brickle Downtown corridor. You've got triple net numbers around forty five sixty four dollars a square. It's forty five to

sixty five dollars a square foot. That's the range um and there's over I would say a million square feet right now in a man for office space in these areas. So it's not only people buying these these residential homes, they're also looking to move their headquarters Daniel, at least divisions within these courts. Is it a trend that would have happened if we didn't have COVID or is there is this the COVID factor. I think it's the COVID factor.

I really think it's the COVID factor. Like I said earlier, I mean we've always had had, you know, a strong migration from the northeast from Canada. We started to see a little bit of California in tech to service Latin America, etcetera. But it really is the COVID factor. I mean, in March and April, we didn't know what was going to happen. And then come May, June, July, which are typically our slowest months, they were our strongest months. We were up

over a hundred in July alone. So it happened, and it happened very quickly. Well, and when I you know, when I kicked this off and we started talking about who's buying and you said, you know a lot of people are buying. Um it used to be a lot of I feel like foreign or non US investors and buyers. What are we seeing from Europe, What are we seeing from Latin America, What are we seeing from Asia? It's

pretty dry. So we traditionally, especially in our new condominium division, we saw a lot of what we would call flight capital from Latin America, and that has just dried up because of everything that's happening in the respective economies up down in Latin America. So we we have just seen the domestic buyer, I mean, and because of you know, the low interest rate environment, we've also seen a lot of refinancing. So that's of course helped sort of spur

the market forward. But it's really been the domestic buyer from the Northeast, from California that's been relocating here Boston, Washington, Chicago. We just did a deal. We're representing one thousand Museum, which is in downtown Miami Asahahadeed building. We just did it deal for fifteen million dollars over fifteen hundred of square foot or sixteen million, fifteen hundred of square foot to a buyer from Chicago. So it's just it's it's

it's incredible what's happening. So okay, I'm going I just kind of put a if you weren't in Florida and this wasn't the market you were playing in right now when it comes to and selling and and working with in um, if it wasn't South Florida or Florida, where would it be that you would want to be working in me? In New York City? I think that there's see I I go to New York City often with my family for business, etcetera. We love it, and my wife and I this year we're talking about how sad

it was. She does a girl's trip actually every Christmas to New York and they couldn't go. And then some of my buddies and I were talking on New Year's about when, when, when is the right time to go back to New York And I hope it's very soon. But from a business perspective, I heard you say earlier

and I agree with you. Prices, especially on the condominium front and the new developments have not gone down the way you've expected then two or the way we've expected them to help kind of firm and you are seeing some deals get done thirty forty million. But I do believe there will be opportunity, and I think that it's it's it's the it's the intelligent thing to do to be investing right now. And then yeah, that's what people

have said, it's great opportunities. The median price have previously owned homes that changed in the fourth quarter just down about one and a half percent by Miller Samuel and you know, just looking at those Manhattan home shoppers, people who are selling are not cutting their prices at this point. Um, Daniel is so great to check in with you. Um, be well and hopefully we'll check in again throughout the

new year. Daniel de la Vega, President at One Sotheby's International Reality, on the phone from Miami.