Last year, the formerly Chicago-based hedge fund Citadel announced that it would be moving its global headquarters to Miami. (Though to be clear, the company still has an office in Chicago.) Today, the Miami housing market is feeling the effects:
“They’ve been buying here aggressively,” said Michael Martinez, a real estate agent with Sotheby’s in Miami, who recently brokered the sale of a $5mn home in Coconut Grove, a quiet salubrious suburb, to a Citadel employee. Most of the luxury homes he has sold in recent months have been to hedge fund buyers, half of them from Griffin’s firm, he estimates. “The Citadel migration is definitely occurring.”
But it’s not just Citadel.
According to another agent quoted in the article, there are many other “hedge fund buyers” active in the market, and many/most of them are buying all cash. In desirable suburbs like Coral Gables and Coconut Grove, homes between $3-7mm now account for about 40% of all listings.
I remember visiting family in Miami in and around the GFC of 2007-2008. It was at this time that I really fell in love with the place. You could see how it was using art and culture to carve its identify. It was (and still is) this really exciting and sexy place.
But it was also reeling from the GFC. I remember seeing listings for large and newish 2-bedroom waterfront condos for ~US$150k in some areas. If I had any money, this likely would have been a smart move given how Miami has grown since then.
So I think this story is less about the Citadel effect and more about Miami’s continued rise as a global city and global financial center. Notwithstanding the whole climate risk thing, this city region has some pretty powerful tailwinds.
Photo by Ryan Parker on Unsplash
BRANDON DONNELLY 
But I understand that Miami is essentially sinking, and a seawall is being built in the ocean to protect it. Also, apparently Florida is the “sink hole capital” of North America. Florida is among the worst states in the huge shift to the right, so I imagine people wanting to go there are either conservative – or ignorant.
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So this.
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Does the current state government scare you at all? The attack on womens bodies and gun control is enough for me to not travel there, vote with your wallet.
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I visited Miami last year and I like it much more than I thought I would – so many galleries, so much great art. But I also have the sense that it’s home to a lot of dark money. And yes, with the current state government in power, who are over-riding local laws that they don’t like, for instance around historical preservation. I’m glad I went last year because I won’t be back.
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