As fears grip New York’s real estate industry following Zohran Mamdani’s primary mayoral race win, the feeling is far more upbeat in South Florida. The industry here is gushing over the prospect of an influx of New York investors and high net worth individuals, prompting a second residential and commercial real estate boom in the tri-county region, following the pandemic.
“I think this outcome will be extremely beneficial for all of South Florida,” Fort Lauderdale-based commercial and residential broker Jaime Sturgis said of Tuesday’s primary results. “There’s been a number of policy changes over the years that have driven investors out of New York. A lot of them are lifelong or multi-generational investors and owners in New York and they are just done. They are all coming down. This [election] may be the proverbial straw that breaks the camel’s back.”
Florida, a right-to-work state with no personal state income tax and a ban on rent regulation, has for years been the antithesis of New York, where developers and investors face strict rent control policies and requirements for union labor. Since Covid’s onset, South Florida’s pro-business climate made it a magnet for New Yorkers, supercharging the tri-county region’s residential and commercial markets.
Mamdani’s calls to freeze rents for rent-stabilized apartments and impose higher income and corporate taxes are poised to amplify the influx. New York real estate investment trusts felt the sting immediately after the results, with shares in AvalonBay Communities, Equity Residential, Vornado Realty Trust, SL Green and others sliding on Wednesday.
His anti-Israel stance also has prompted anxiety in New York. (Mamdani’s win isn’t final. Although New York’s general mayoral election historically swings Democratic, the city’s real estate industry and other stakeholders are expected to mount significant backing of his opponents in November.)
A Mamdani win will be “horrendous” for New York and the rest of the U.S., including Florida, said Alicia Cervera Lamadrid, managing partner at Miami-based Cervera Real Estate.
While “we will without a doubt see increased business and capital flight” to South Florida from New York, Mamdani’s policies undermine the capitalist system in the U.S., she said.
Mamdani stands for “everything that made people run away from Democratic cities and states in the first place,” said Robert Rivani, who moved his Black Lion investment firm to Miami from Los Angeles in 2022, partly due to his disdain for California’s Democratic leadership. “He’s just trying to double down on that madness.”
South Florida brokers and developers are bracing for the fallout.
“My phone has been literally ringing off the hook,” said Sturgis, founder of Native Realty. “This has the potential to be as strong or potentially stronger than the domestic migration of wealth we saw post-Covid.”
New Yorkers worry, Miamians pop champagne
The reaction to Mamdani’s win was swift. As some New York brokers described the feeling as a “knot in their stomachs,” a ballyhoo of excitement resonated across South Florida’s real estate industry.
“Time to move to Miami,” Alex Witkoff, CEO of Witkoff Group, wrote on X, tacking on emojis of a sun and a palm tree.
Gov. Ron DeSantis’ take: “Just when you thought Palm Beach real estate couldn’t go any higher…” he wrote on X. Philip Levine, former Miami Beach mayor and real estate investor, reposted DeSantis’ post, adding in jest: “Florida should pay for Mamdani’s campaign!!!”
Even someone based in Los Angeles and seemingly not involved in real estate chimed in with a video of a “Scarface” scene, including an electronic dollar bill counter, set to the movie’s theme music under the caption, “South Florida real estate agents, as the New York primary results come in.”
It’s all jokes and giddyness for now, while real estate demand is expected to surge.
Top luxury residential broker Dina Goldentayer already has seen New Yorkers keeping a close eye on her Instagram. The primary results only moved “the needle further in Miami’s favor,” the Douglas Elliman agent said via text.
Margit Brandt, a top agent in Palm Beach, said a Mamdani victory will be a boon for the island’s real estate market, especially considering that the busy season starts right after New York’s election day. She’s advising clients to get in ahead of the rush.
“We’re going to see a big price jump,” she said. “You just don’t want to be the last person to the party.”
At BH Group’s W Pompano Beach Hotel & Residences and Ritz-Carlton Residences in West Palm Beach, a potential buyer from Manhattan and another from Connecticut inquired about condos on Wednesday.
“The salesperson understood in between the lines that they weren’t happy with what’s going on,” said BH Group’s Isaac Toledano. “A lot of people aren’t happy and are nervous of what’s coming. Florida will win and will benefit from this.”
Sturgis received close to 20 calls since Tuesday night from New Yorkers, many saying they plan to sell off their commercial assets, and asking him to find South Florida properties they can use for 1031 exchanges.
“We need more [for sale] inventory down here to meet the demand,” he said. “I was joking I want to start a super PAC for this candidate because he is driving all of the constituents straight to South Florida.”
The pandemic unleashed the biggest wave to South Florida, with many also citing higher crime, hurdles to business and other issues elsewhere. Most recently, California’s wildfires prompted further discontent with the management of that state, leading affluent residents to look to Palm Beach.
Billionaire Ken Griffin moved his Citadel and Citadel Securities’ headquarters from Chicago to Miami’s Brickell in 2022, setting records for commercial and residential property purchases. Billionaire Steve Ross is redeveloping downtown West Palm Beach into an office mecca, tapping into his New York network to quickly fill his eight office towers, including those planned and under construction. The in-migration led to an influx of wealthier residents, bringing in $39 billion of net-income migration to Florida from 2020 to 2021, according to the Palm Beach County Business Development Board.
Ripples beyond Miami, West Palm Beach
Miami and West Palm Beach, cities with pro-business leaders who have long tried to entice out-of-staters with billboards in Times Square, social media posts and other marketing tactics, emerged as the biggest winners of recent years’ in-migration.
Along with wealthy executives, investors and developers, the in-migration included those who rented apartments. They worked remotely in their South Florida apartments, renting at a discount to New York rates, and leading to record rent increases in Miami and beyond.
This time, if Mamdani wins and New Yorkers leave, things will play out differently for Florida, some say.
The rental market likely won’t experience an increase in demand because employers in New York already called workers back to the office, ending the work from a Miami apartment party, said Andrew Rahman, of Plantation-based multifamily management firm Crown Residential. Mamdani’s push to make New York housing more affordable also will lead the city’s renters to stay.
Instead, multifamily investors and developers will leave New York, largely due to Mamdani’s proposal to freeze rents on rent-restricted apartments, Rahman said. New York landlords of these properties already have been reeling from the state’s Housing Stability and Tenant Protection Act of 2019, which essentially ended deregulation.
But don’t expect them to move to Miami-Dade County. The land-constrained county already experienced a development wave in the past five years, saturating it with new apartments, which has slowed lease-ups, and pushed land prices up.
“Miami is just expensive all the way around. When it comes to how much income you are going to earn in NOI [net operating income], some markets in Orlando rival South Florida,” Rahman said. “Developers are absolutely seeing that and licking their chops, either developing in Orlando or they can go even slightly north of Orlando to New Smyrna Beach and Daytona Beach.”
High net worth individuals will still seek a Florida escape, as their wallets will be threatened by Mamdani’s promise of a 2 percent city income tax on earners of over $1 million and a higher corporate tax rate, experts say.
Yet, not everyone is entirely convinced. New Yorkers won’t leave their homes for Miami if Mamdani wins, said Ruthie Assouline, of Douglas Elliman.
“That’s not how New Yorkers operate,” said Assouline, a New York and South Florida agent who runs the Assouline Team with her husband, Ethan. “It’s not your typical city. They’re entrenched in their schools, their businesses. That’s the lifestyle they want to lead.”
The election will prompt those who already moved to South Florida and were recently contemplating moving back to New York, to stay, she said. “That type of person is probably taking a pause,” Assouline said.
Some New Yorkers say the tri-county region lacks private schools and cultural offerings that they are used to, as well as infrastructure that is not geared to meet the rapid growth. Could a Mamdani win prompt them to overlook South Florida’s shortcomings?
“For people that did not yet relocate, but may have an office or presence here, or may have contemplated moving here,” said Brett Forman, of Delray Beach-based private lender Forman Capital, “that may be the tipping point.”
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