Florida Is Fast Becoming The Second Home For Wall Street
It’s a cliche that New Yorkers move to sunny Florida when they retire. This trope is being updated. Now top Wall Street, hedge funds and financial services firms are moving out of New York and relocating or opening up offices in the Sunshine State.
Virtu Financial Inc, a highly successful electronic trading firm that made about “$9.6 million a day” during the third quarter of 2020, is the most recent Wall Street player to set-up shop in Palm Beach Gardens, Florida. According to Bloomberg “ Roughly 50 people, or 10% of Virtu’s U.S. workforce,” will be moving. Virtu’s Chief Executive Officer Doug Cifu said in Wall Street parlance about the migration, “We are dramatically oversubscribed for people who want to relocate from the tri-state area.” Cifu added, “We surveyed our employees, and the №1 concern that people had was quality of life-but also taking mass transit to New York City any time in the foreseeable future.” There’s another benefit for the well-paid workers too. They will “see a lateral pay move, which amounts to around an 11% increase in salary because Florida has zero income tax.”
“I was always a non-work-from-home, people-gotta-be-in-the-office, trading-room kind of guy,” said Cifu. “But I don’t think it’s practical given the modern world and where people want to live their lives and where people are happiest.” After schlepping back and forth from his home in New Jersey to Manhattan, Cifu said about the move to Florida, “This is a forever thing,” and “We ain’t coming back.”
A combination of high taxes, poor governance on the part of New York City Mayor Bill de Blasio, ever-increasing crime, capricious business and school shutdowns and a resurgence in Covid-19 cases may have contributed to Goldman Sachs considering to move a large money management division to Florida.
The absence of a state income tax, plus warm weather and a business-friendly mindset, has already prompted hedge fund billionaires and native New Yorkers Paul Singer and Carl Icahn to relocate their respective businesses to Florida. Blackstone Group, the large private equity firm, signed a long-term lease in October for office space in downtown Miami. Deutsche Bank previously established a sizable beachhead office complex in Jacksonville, Florida.
Ken Moelis, the CEO of his eponymous investment bank Moelis, told Bloomberg that his bankers wanted to leave New York City for Florida. In response to their request, Moelis replied, “We’re a talent business. I want to attract, I want to motivate and I want to retain the greatest talent in the world. And if that talent wants to do it in Florida, that’s where we’ll support them.”
A recent study showed that at least 20% of Wall Street banks and financial services firms have thought about relocating workers to other locations outside of New York. This trend will result in a hard hit to New York City’s budget, as the securities industry accounts for a substantial amount of tax revenue. The white-collar employees tend to earn larger salaries and bonuses compared to people in other sectors. Their departure would worsen the situation for restaurants, retail stores and other businesses that are already reeling from the effects of the pandemic.
The Covid-19 pandemic has shown that more work can be done remotely than ever before. Therefore, there is less of a need for costly offices. Unless city and state elected politicians make changes, the flight out of high-taxed, expensive cities will continue. As corporations and well-paid, white-collar workers leave, the cities will bear the brunt of plummeting tax revenue. The decline will force mayors to drastically cut costs. This will include massive layoffs of teachers, police officers, firefighters, garbage collectors and other municipal workers.
With less services, the cities become dirtier, crime increases and living conditions worsen. This will prompt even more people to move. A cascading downward spiral could occur, making places like New York dangerous and inhospitable. It could become just like in the dark days of New York in the ’70s. It took over a decade to turn things back around.
United Van Lines released it’s 44th Annual National Migration Study, that shows a movement from New York and other large cities to locations in the south and west. The report indicated that the Covid-19 pandemic “accelerated many of those decisions to move,” and “ 40% of Americans who moved did so for a new job or job transfer.” Other reasons for the move out of big cities were due to “concerns for personal and family health and wellbeing,” and “changes in employment status or work arrangement,” along with a “desired lifestyle change or improvement of quality of life.”
Eily Cummings, director of corporate communications at United Van Lines said about their customers, “As more people experience job and lifestyle changes amid the pandemic like remote working, we’re seeing they have more flexibility in where they can live — many choosing to move from urban to more rural areas.”
Here are the top inbound and outbound moves according to United Van Lines:
The top inbound states
- South Carolina
- South Dakota
- North Carolina
The top outbound states
- New Jersey
- New York
- North Dakota
Originally published at https://www.forbes.com.