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Top Tech Hub Dreams Fade In Miami, But It’s Not All Bad News
Defining the future of real estate
Franco Faraudo & Nicholas Pipitone
September 17, 2024
Presented by Occuspace
Propmodo Daily
By Nick Pipitone · September 17, 2024
Greetings!
Today’s email is brought to you with the support of our friends at Occuspace. Download their new eBook: 5 Ways to Reduce Operational Costs and Boost Productivity with Space Utilization Data. Miami's ambitions to become a top tech and crypto hub faced a setback when Andreessen Horowitz closed its Miami Beach office, but the city's office market remains strong with finance and legal sectors leading. Plus, a new Columbia University building will become New York City’s first all-electric academic research facility.
Now, let’s dig in!
Top Tech Hub Dreams Fade in Miami, but It’s Not All Bad News
Miami Mayor Francis Suarez has lobbied hard in recent years to make the city the country’s cryptocurrency capital and a premier tech city. Suarez’s hopes were dealt another recent blow when Andreessen Horowitz, one of Silicon Valley’s most high-profile venture capital firms, shuttered its Miami Beach office.
The company, also known as a16z, left its roughly 8,300-square-foot office at 2340 Collins Avenue, a boutique office property owned by and hosting the headquarters of Starwood Capital Group.
California-based a16z manages $7.6 billion in crypto-related assets and is a major player in deploying capital in emerging technologies. The loss of the company is the latest sign that Miami’s tech and crypto fortunes are failing to materialize, even as Bitcoin has doubled in value over the last year.
The Miami region hasn’t been able to keep up with better-established tech hubs, let alone Silicon Valley. CBRE’s Scoring Tech Talent 2023 report of top North American tech destinations ranked South Florida 31st behind established tech hubs like San Francisco and New York City and even behind non-traditional tech markets like Detroit, Orlando, and Pittsburgh.
Miami's tech scene boomed in 2022, with 77,000 jobs marking a 24% surge since 2017. But there’s a catch: companies struggle to fill those roles with homegrown talent. Tech-savvy graduates are heading out of town for opportunities elsewhere. According to CBRE, South Florida’s population of twenty-somethings shrank by 9.8 percent between 2016 and 2021.
Though the buzz around Miami as the ‘Silicon Valley of the South’ may be fading, the city’s office market remains resilient. Avison Young reports tech firms made up just six percent of office leasing activity through July. Miami’s office heavy hitters—finance and legal sectors—continue to dominate the market.
Losing Andreessen Horowitz as a tech office tenant may not sting too bad, either. Within weeks, Bausch + Lomb scooped up the office space that a16z put up for sublease, kept all the furniture, and had already moved in.
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🏢 The Long Goodbye to Divergence in Public and Private Real Estate Valuations 📉
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