The balance of power in tech cities is beginning to shift after Silicon Valley has dominated the industry for decades. In recent months, many of techs’ biggest names have packed up shop and moved to other locations, with many of them bringing their business with them.
A city that is seeing huge growth in its tech industry, led by Mayor Francis Suarez, is Miami. The city netted itself another big fish recently after it was revealed that PayPal co-founder and venture capitalist powerhouse Peter Thiel had bought himself property in Miami.
Peter Thiel is one of the biggest names in the tech industry, with a net worth of over $7 billion and a history of savvy tech investments. Thiel was the first outside investor in Facebook and runs the Founders Fund, a VC firm that invests in cutting edge tech. Thiel was revealed as the buyer of two adjacent waterfront properties on Miami Beach that were sold at $18 million.
While this doesn’t necessarily mean he’s going to move his companies from San Francisco to Miami, the presence of a mogul of his magnitude makes Miami a more viable tech city. Other big-time tech leaders and VC fund runners have also made the move to Miami.
In December, Keith Rabois, another former high-ranking PayPal executive and a partner with Thiel with the Founders Fund purchased a Miami Beach home for $29 million. Rabois has been tweeting about why Miami is the better spot for tech businesses than San Francisco, touting the growing business community and significantly lessened taxation.
In October, billionaire businessman Jon Oringer, who founded stock image company Shutterstock, purchased a Miami waterfront mansion for $42 million.
There is definitely a significant amount of buzz about Miami as a new tech hub. While Miami Beach has always been a haven for the extremely wealthy, Miami has more consistently been affiliated with a celebrity lifestyle rather than a business one. But with juggernauts of industry making the move to Miami, there is a good chance of that changing. Besides, Miami has a ton to offer businesses.
Douglas Elliman Director of Luxury Sales, Miltiadis Kastanis commented “Miami has seen a big increase in activity from buyers who work in the tech industry. I’ve experienced that when it comes to tech entrepreneurs searching for a home, they look at properties in a different way than the typical buyer. They look at the properties to be more than just a house or a condo. They are not looking for a designated ‘office’ space within the home; in fact most of the tech buyers look at the dining room as their office or even a terrace that offers great waterfront views.
They tend to also be interested in where they are going to put their ping pong table, record room or shuffle board. I’m having a lot of fun selling to these buyers because they are fast moving individuals and they are open to things that other buyers tend to over analyze. They want a fun space to be creative and a place where they can enjoy quality alone or family time in.
They are fast decision makers which is an important quality to have, especially in this rapid real estate market we are experiencing in South Florida. I am excited for what the merge of Finance and Tech entrepreneurs will bring to the already vibrant Miami culture.”
Miami is in Florida, which has no state income tax. With significantly lower corporate taxes than most states, and no tax for LLCs, sole proprietorships, and S corporations, businesses can save a lot of money. As well, the cost of living is significantly lower in Miami than in San Francisco, and the weather is warmer year-round, with some of the best restaurants and beaches America has to offer.
On top of all that, Mayor Francisco Suarez is obsessed with bringing tech businesses into Miami. He is the city’s biggest advocate, constantly tweeting out reasons why tech companies should move to Miami, with that appearing to be one of his core goals as the city’s mayor.
Miami has long been thought of as a place where the rich go to get away from work. While it is a city that is known for its wealth and luxury, it hasn’t necessarily been a place where tech companies would set up shop.
But with Silicon Valley losing its vice grip on the tech industry, Miami appears to be experiencing legitimate growth. There is a buzz about Miami as one of America’s new tech hubs, and with big names like Peter Thiel making the move into the city, it might not be long before Miami lives up to its mayor’s lofty ambitions.