Miami is a winner in the office space slump. The metropolitan area has outperformed and is set to continue to do so, according to Capital Economics. But its triumph wasn’t enough to save Andreessen Horowitz’s “Wall Street South” office, it seems.
In May, the venture capital firm shuttered its Miami office two years after opening, Bloomberg reported on Wednesday, seemingly relinquishing its hopes of building a presence in what’s become a burgeoning hub for crypto and finance. Miami has been christened the “Wall Street South” as it has evolved into a new frontier financial center with more and more companies, and the billionaires who helm them, migrating to the Sunshine State.
The pandemic (and remote work) was already a thing when a16z signed a five-year lease back in 2022, but crypto hadn’t experienced its meltdown yet. So flash-forward a couple years, and there weren’t enough employees using the office space, according to Bloomberg, which cited people familiar with the matter. The company confirmed the news to Bloomberg, but declined to comment further.
In late July 2022, billionaire entrepreneur Ben Horowitz, one member of the founding duo, wrote that the firm would open three new offices in Miami Beach, New York, and Santa Monica in addition to its existing Menlo Park and San Francisco locations, and that its new headquarters would be in the cloud. Tech-heavy metros in the West, especially San Francisco, have been the worst-hit when it comes to office woes befouled by lower demand and higher interest rates. And yet it’s the venture firm’s office in Miami that it has decided to forfeit, one owned by none other than real estate billionaire Barry Sternlicht, a vocal opponent of the Federal Reserve and its monetary policy.
Either way, it was only months later that the $30 billion empire that was FTX collapsed in a 48-hour period. So it may be that Miami is no longer the shiny crypto hub it used to be because clearly it isn’t simply remote work that’s forced a16z to pull its physical presence in the Magic City. According to Capital Economics, which earlier labeled Miami “a winner” of the latest office cycle, office visits in the city “had recovered to 90% of their pre-pandemic levels by July, well above the 72% national figure,” it said, citing outside data. Plus, in the second quarter, the Miami-Dade county office vacancy rate was 9.2%, which was much lower than the national average of 17.5%, according to Colliers. Andreessen Horowitz did not immediately respond to Fortune’s request for comment, and a Miami office is not listed on the company’s website.
Not to mention, recently, JPMorgan Chase doubled down on its office space in Miami, with plans to expand. Similarly, in 2022, Goldman Sachs doubled its downtown Miami office footprint and that same year, Citadel announced its new global headquarters would be in Miami, and has continued to lease more office space since. Oracle, Palantir, and Hewlett Packard Enterprise relocated their offices to Miami, too. And Amazon happens to be looking for some office space in the metropolitan area, following founder Jeff Bezos’ move to the city’s Billionaire Bunker.
The former a16z office is now the workspace of Bausch + Lomb, a company that makes contact lenses, Current Real Estate Advisors’ Brandon Charnas told Bloomberg. It was his commercial real estate firm that helped facilitate the new deal and original lease. “We’re not seeing a ton of crypto companies saying they need an office space in Miami,” Charnas said.
Another, Colliers’ Kevin Gonzalez, who also helped facilitate the new deal, told Bloomberg: “There was a lot of hype around promoting crypto in Miami, but crypto had a small office presence even at its peak.”
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