Blackstone Group is betting on Miami to build out its technology team, with hiring underway for newly leased office space in Florida’s second-largest city.
The alternative asset manager expects staff will begin moving into the new office this summer and is aiming to hire around 200 professionals, John Stecher, Blackstone’s chief technology officer, said in a phone interview. The team will help develop and strengthen Blackstone’s internal tech, he said, including apps for clients to engage in analytics and cybersecurity to protect their money.
New York-based Blackstone is the world’s largest private equity firm, investing on behalf of institutional investors such as pensions, endowments, foundations, and sovereign wealth funds. Stecher, who joined the firm in February after serving as CTO and chief innovation officer at Barclays, said Blackstone already employs around 400 tech professionals in New York and India.
The decision to create an office in Miami was based on Blackstone’s desire for a new tech team in the same time zone as New York, as well as the firm’s effort to find a city that could attract and retain top technologists, according to Stecher. He said the area stood out as a desirable place to live and work partly because of its climate and transit system.
Miami “really rang through in terms of where people were interested” in having a technology career with a company like Blackstone, said Stecher. “It’s a destination city.”
Local university programs in computer science and engineering will provide Blackstone with solid recruitment grounds, while the seasoned tech professionals in the area are another potential pool of talent, according to Stecher. Blackstone has already begun hiring across various tech roles, including cybersecurity, he said, and is currently set up in a temporary Florida office.
The firm recently signed a lease for new office space in downtown Miami, where the new staff will eventually work, said Stecher. The new location is a 41,000-square-foot lease at 2 MiamiCentral, a building whose tenants include law firm Carlton Fields, auditing firm Ernst & Young Global, and natural gas infrastructure company New Fortress Energy, according to a January 4 statement from landlord Shorenstein Properties.
The building is next to the MiamiCentral train station, which Danet Linares, vice chairman of Blanca Commercial Real Estate, described to Institutional Investor as a mini version of New York’s Grand Central station, as the transit hub includes dining options. Blanca brokered the Miami lease with Blackstone, representing property owner Shorenstein.
Linares said by phone that she has seen an unprecedented search for commercial real estate in the Miami area this year. She attributed the increased interest in part to the pandemic, because people began considering alternative locations where they might prefer to work remotely, as well as Florida’s push over the past several years to attract businesses.
Hedge funds and other investment firms have appreciated Florida’s tax-friendly policies and that Miami’s airport includes international flights, she said. At least before the pandemic, the city offered a vibrant scene for entertaining business clients, Linares added.
Companies new to Miami are seeking a total of 1.1 million square feet of real estate in the area, according to a spokesperson for Blanca. That represents 54 percent of the total square feet sought in the area by tenants tracked by the commercial real estate brokerage firm.
Fifty-seven percent of tenants new to the Miami market are in the hedge fund and financial services industries, an email from the spokesperson shows. Almost half of new entrants’ interest in Miami real estate stems from New York, while Chicago and San Francisco are other large markets with tenants seeking office space in the southeastern city of Florida.
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Billionaire Carl Icahn is among investors to make the move, relocating his firm’s headquarters to Sunny Isles Beach, Florida from New York this year. Sunny Isles is part of Miami-Dade County.
Private equity firms I Squared Capital and Optimum Capital Partners have also entered the Miami market in the past few years, according to Blanca.
In another high-profile move, Barry Sternlicht’s real estate investment firm Starwood Capital Group, founded in Greenwich, Connecticut, is now based in Miami Beach, the firm’s website shows. Starwood had planned its relocation from Greenwich well before the pandemic, according to a 2018 report from The Real Deal.
Blackstone’s Stecher said the firm’s new tech-focused office in Miami is not an exit from New York. Citing his past experience on Wall Street, including at Barclays and Goldman Sachs Group, he said supporting growth means searching for top engineers outside New York, as well.
While the Covid-19 pandemic has prompted many firms to shift to working remotely, Stecher said he expects his new team in Miami will eventually all work at the office for the sake of collaboration. The pandemic has made it easier to recruit people, he said, finding that many people who had left the area now have a desire to “boomerang back.”