😎 Going Full Floridian

Happy Saturday Highest & Best! I’ve just returned from Austin, Texas, where I was hanging out last week to accept an award from the National Association of Real Estate Editors.

Highest & Best, started just 10 months ago, won honorable mention in the “Best Real Estate E-Newsletter” category for 2023.

I’m told I may now refer to this newsletter as “award-winning.” So here it is! Today’s edition of an award-winning newsletter, now with 8,000+ subscribers.

Here’s the rundown:

🌴 JPMorgan gets more Floridian

🫣 Florida’s largest home insurer hikes rates 14%

🚂 A touch of Venice near Miami’s train lines

Let’s get to it!

JPMorgan Going (Almost) Full Floridian

Sure, JPMorgan Chase is building a new 60-story headquarters on Manhattan’s Park Avenue. But it’s getting ever sweeter on Florida.

The New York bank said this week that it’s doubling its corporate office space in Miami AND is opening a 13,000 square foot office in West Palm Beach. It’s also bringing three wealth management branches — called “JP Morgan Financial Centers” — to manage some wealth in Palm Beach, Jupiter and Palm Beach Gardens come 2025.

We could have seen this coming in February, when the bank — the country’s largest — bought the naming rights to a Fort Lauderdale stadium that’s home to the region’s pro-soccer team, Inter Miami CF. Yes, the house where superstar Lionel Messi plays is now called Chase Stadium.

But back to the bank’s corporate expansion. JPMorgan Chase CEO Jamie Dimon has been the biggest get-back-to-the-office evangelist in the post-pandemic era, and he’s certainly giving his employees enough Florida office to choose from:

In Miami, JPMorgan Chase will expand its lease at 1450 Brickell Ave. to 160,000 square feet from its current 80,000. That extra space can accommodate another 400 employees in Miami, on top of the over 500 who already work there.

In West Palm Beach, the bank will debut a corporate office at 360 Rosemary, a new tower by New York developer Related Cos., that also counts Goldman Sachs as a tenant. The 13,000 square feet it’s taking there will ”bring together” 60 employees currently dispersed across Palm Beach County, the company said.

“Miami and South Florida are home to an increasing number of our clients, customers, community partners and employees, and a strategic location for our operations in Latin America as well,” Jonathan Bello, co-chair of the firm’s South Florida Market Leadership Team, said in a statement.

JPMorgan Chase is clearly not a fleeting presence in the Sunshine State: it counts about 16,400 employees — including in its retail banks — across the state of Florida.

The bank, in a bit of obligatory bragging rights, estimates its corporate expansion will add $151 million in economic activity to South Florida.

⏪ Catch up on recent Highest & Best issues:

• Miami Mega-Loan Mania, June 14, 2024

• Foreclosure, Fines and Forklifts, June 7, 2024

• Happy Home Insurance Vibes, May 31, 2024

A 14% Rate Hike for Florida’s Largest Home Insurer

So much for those happy home insurance vibes.

A few weeks after Florida (land of the highest U.S. home insurance premiums) signaled that prices might be stabilizing, comes this wallop:

Citizens Property Insurance Corp., Florida’s government-backed insurer of last resort, is seeking a rate hike of 14% for next year.

The state insurer — with the twin goals of remaining solvent and offloading as many customers as possible to private carriers— is seeking the maximum price hikes it’s allowed to by law for 2025.

If the new rates are approved by Florida insurance regulators, nearly 1.2 million Citizens policyholders would see their cost of coverage rise:

😲 In Miami-Dade County, 96,941 single-family homeowners with “multi-peril” coverage will see average premiums increase from from $5,113 to $5,804.

🫠 In Palm Beach County, the 61,357 homeowners with Citizens policies would see premiums climb from $4,904 to $5,561.

😳 In Broward County, the price hikes affect 71,196 homeowners, whose premiums would average $6,112 next year.

Citizens offers policies to people who can’t find home insurance coverage elsewhere— a critical function in a state where at least seven home insurers have become insolvent since 2022. Earlier this year, Citizens held 15% of all home insurance policies in Florida, the state’s highest market share.

In 2023, Citizens offloaded 275,000 policies to private firms, reducing its exposure by about $113 billion. And this year, Florida regulators approved 13 other private companies to assume another 354,000 policies from Citizens.

😎 HEY, BUT: While Citizens is hiking its premiums, at least ten other insurers have — in an unusual move— declined to raise premiums at all. And at least eight Florida insurance companies have filed for rate decreases.

Part of the reason is that they didn’t lose too much money insuring Florida homes last year. In fact, they nearly broke even, according to insurance rating agency AM Best:

Florida Insurers Operating Income/Loss 2014-23

A Bit Of Venice, Near Miami’s Trains

For the train-oriented, Venetian architecture buff who wants a lux rental in Miami, comes this week’s new development announcement:

First & Fifth, a 45-story rental tower inspired by Doge’s Palace in Venice, will rise directly across the street from MiamiCentral Station, a hub for the Brightline and several other train systems into the city.

Developer Oak Row Equities announced this week that it paid $38.5 million for the site of the planned tower, at 49 NW 5th Street. The seller of the site never shopped the deal publicly AND provided financing, Oak Row said in a press statement.

Now that it owns a site across from a train station that’s projected to eventually have 10 million people commuting through annually, Oak Row plans to build some for-lease housing there.

“The ability to live, work, and play within a short walk or train ride will become critical to a renter's decision process in South Florida," Erik Rutter, managing partner at Oak Row, said in a statement.

First & Fifth will be a a 500-unit rental tower with “top-of-the-line finishes,” downtown city views, and of course, a pool. The development will preserve the facade of a former three-story Salvation Army building built there in 1925, with it’s multiple pointed archways. The old building, plus inspiration from the Venetian palace, informed the rental tower’s design, Oak Row said. No word yet on when construction begins.

Miami’s commercial real estate investors are banking on a continued momentum of employees to the city, many of whom are coming from locales with ample public transit. Chicago’s John Buck Company is building its first-ever Florida project, called HUB Miami, near MiamiCentral Station as well. See our interview about its office and condo tower plans here.

That’s it for today!

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