South Florida’s office market prospered from an influx of companies over the past four years, pushing up rents to record rates and prompting developers to jump on projects. But now, as tenants pause expansion plans due to elevated interest rates and more expensive financing, some office owners and developers are feeling the sting of higher vacancies and a lack of preleasing.
Steve Ross isn’t one of them.
The founder of New York-based Related Companies continues to score financial firms and other tenants at his completed and under construction towers in downtown West Palm Beach.
The firm is the biggest office landlord in the area.
The 25-story One Flagler, dubbed the “hedge fund tower,” has been a prime target for the leasing flurry. The building, which will have 270,000 square feet of offices and 4,100 square feet of retail, is under construction at the foot of the Royal Park Bridge. Completion is expected this year.
One Flagler is 75 percent preleased, with rents reaching $100 per square foot to $140 per square foot, according to The Palm Beach Post.
The other leases were at Ross’ completed towers. The 20-story 360 Rosemary, finished in 2021, is 105 percent leased after Related converted the garage’s top level to offices. The 20-story Esperanté Corporate Center lost a tenant to One Flagler but also gained a tenant, meaning the tower still is fully leased. Related’s 18-story CityPlace Tower also scored a venture capital firm as a tenant.
Here is more about the leasing activity:
Paulson Capital, founded by billionaire hedge funder John Paulson, will open its first South Florida at One Flagler, the release said. Consistent with the trend of financial firm executives first purchasing residential properties in South Florida prior to moving their company here, Paulson dropped $110 million for a Palm Beach mansion in 2021. Paulson Capital is an investment management services firm.
Another new-to-market financial firm opening at One Flagler is New York-based asset manager Baron Funds. It has $43 billion of assets under management.
Private wealth manager Bessemer Trust will move to One Flagler next year from its home at 222 Royal Palm Way in Palm Beach. The firm has had a South Florida presence since 1929. And private equity investment firm HighPost Capital, founded by CEO David Moross and Mark Bezos, who is brother of Amazon’s billionaire founder Jeff, will move its headquarters from the Esperanté Corporate Center to One Flagler.
The Glazer family, owners of the Tampa Bay Buccaneers, will open a family office for their Lancer Capital, which is tied to their nonprofit Palm Beach-based waterfront arts and cultural center.
Two nonprofits, Johnson Family Foundation –– 108 Management and Betty Wold Johnson Foundation also leased at One Flagler.
In previously announced deals, Chicago-based private equity firm GTCR, private equity firm Siris Capital and asset manager Diameter Capital Partners leased at One Flagler. Also, Siris and Diameter are both based in New York.
Chef Costas Spiliadis’ Greek seafood restaurant Estiatorio Milos, with its nearest location in Miami Beach, will open in a roughly 10,000-square-foot space on the ground floor and second level.
One Flagler is at 134 and 142 Lakeview Avenue, as well as the adjacent lot at 809 South Flagler Drive.
The known tenants at the tower include JP Morgan Chase and Goldman Sachs. Also, Point72 Asset Management has a spot in the tower.
Northwell Health will open at the tower next year, The Post reported.
The nonprofit, led by CEO Michael Dowling, is a New York-based health care network and health care provider.
Esperanté is at 222 Lakeview Avenue.
VC and growth equity fund manager Clear Sky opened its headquarters at the tower at 525 Okeechobee Boulevard. Led by CEO Alex Weiss, the firm invests in technology tied to energy transition and cybersecurity.
Related didn’t provide the square footage the tenants leased.