D1 Capital Partners Investment Fund CEO Dan Sundheim has become part of the growing list of managers and investors deciding to move from chilly New York to warm Florida. Sundheim confirmed that he will open a new headquarters in Miami.
D1 Capital Partners is an investment fund that promotes start-ups and technology businesses with an asset portfolio of more than $20 billion. Among the companies where D1 Capital is the lead investor are app delivery service goPuff, molecular pharmaceutical company Inflammatix and international shipping platform Shippo.
Several D1 Capital executives also relocated along with Sundheim. The investment fund will maintain its offices in New York and Hong Kong, despite Sundheim’s decision to relocate to Florida.
CEOs continue migrating to Florida
Sujheim joins a long list of investors who have decided to move to Florida, including Alexis Ohanian, co-founder of Reddit; Jonathan Oringer, founder of Shuttershock, and former PayPal executive Keith Rabois.
Like D1 Capital many investment funds have relocated or opened branches in the southern part of the state, as is the case of Citadel, Goldman Sachs’ trading desk, and the venture capital fund Elliot Management.
Miami Mayor Francis Suarez and Governor Ron DeSantis have been active figures in attracting investors to the state. Suarez has been seen in talks with numerous investors and entrepreneurs in the finance sector, including Tesla founder Elon Musk and Apple CEO Tim Cook.
Governor DeSantis, for his part, has sought to implement lax restrictions to contain the pandemic, which means keeping places like restaurants and schools open.
These looser restrictions, coupled with the low tax structure, have convinced many residents of states like California and New York to invest in Florida.
In 2020, Florida had the second highest population growth in the country, after Texas, with the arrival of more than 240,000 new residents.
One of Florida’s main attractions, aside from its welcoming climate, has been its tax structure, where there is no income or inheritance tax. In addition, the corporate tax is among the lowest in the nation, at 5%.
Florida property boom is caused by migration
In 2020, 2,246 people changed their permanent address from Manhattan to Miami-Dade County and 1,741 to Palm Beach County, according to U.S. Postal Service data.
The influx of high-income earners and new businesses has been reflected in the rising cost of real estate in South Florida. In the most luxurious neighborhoods of the city of Miami, the price of an average condominium reaches $2,000,000, that is, the square foot already exceeds $800, quadrupling the value of the average square foot in Florida.
The high demand, naturally, has also outpaced lodging costs, which in places like the luxury island-city Key West already reaches $600 a day to rent an apartment through Airbnb, making it one of the highest renting cities in the U.S.
The phenomenon of rising real estate prices is not unique to Florida, as housing prices across the country have been on the rise mainly stimulated by increased demand due to low-interest rates offered by banks.