More "Wall Street South:" Related Cos. plans largest office complex in West Palm Beach
The Related Cos., led by billionaire Miami Dolphins owner Stephen Ross, on Tuesday revealed plans to build the largest office complex in West Palm Beach.
Related's newly proposed tower is a sign the New York-based global real estate developer continues to expect strong growth in West Palm Beach. The city became a mecca for corporate migration during the coronavirus pandemic, leading to its nickname as "Wall Street South."
The goal of 515 Fern, the planned 25-story office tower, is to continue to attract these relocations and expansions, the company said in a statement.
At 456,000 square feet in size, the new tower will be the largest complex in the city and more than 100,000 square feet larger than 360 Rosemary, the company's just-completed office building next door.
The tower also will be tall, rising nearly 375 feet. The maximum height for this section of the city is 380 feet, a city official said.
515 Fern will be built at Fern Street and South Quadrille Boulevard, just south of the Brightline passenger rail station. Brightline has stops in Fort Lauderdale, Miami and, by year-end, Boca Raton.
Plans are to build a connector road from Evernia Street to Fern Street, with a covered pedestrian pathway, Related said.
The 515 Fern office complex is set to break ground in 2023, with completion expected by 2025.
With the launch of the new office tower, Related is capitalizing on continued demand for new office space that led to the rapid leasing of the 360 Rosemary office tower.
That tower began construction right before the pandemic and opened its doors last year, filled with a coveted roster of financial and business tenants from the Northeast and Midwest. They include NewDay USA , Point72 Asset Management and Comvest Partners.
More companies are coming, Related said in a plan filing with the city of West Palm Beach.
"The project is driven by the unprecedented opportunity to add a significant number of high-paying jobs to the city, via the relocation of multiple out-of-state financial and technology firms," the application said.
Just last month, BlackRock, the world's largest asset management firm, confirmed it is subleasing space at 360 Rosemary. The company reportedly is subleasing 5,000 square feet of space to accommodate a top BlackRock executive who has a home in Jupiter's Admirals Cove community.
Related is main office landlord downtown, bets big on West Palm
In addition to being a destination for relocating companies, 515 Fern also cements Related's position as the dominant office owner and landlord in the city. When the new tower is completed, Related will own 2 million square feet in the city.
It's a big bet by a company with a long history in West Palm Beach.
More than two decades ago, Related built CityPlace, now known as The Square, a mixed-use residential, retail and entertainment complex that kicked off the city's renaissance.
Since CityPlace's opening in 2000, Related Cos. has held onto the mixed-use center even as it foundered through real estate cycles and fickle consumer sentiments that led to a frequent reshuffling of retail stores.
One reason for Related's loyalty to West Palm Beach is Ross, Related's chairman and co-founder. The part-time resident is known to be proud of his role helping transform the sleepy mid-sized city into an emerging business powerhouse.
Even before the pandemic's start in 2020, Related had been positioning the former CityPlace complex into a more modern district featuring high-rise business and residential towers.
These plans included transforming the shuttered Macy's department store into a luxury apartment tower and building the modern 360 Rosemary office tower.
Then came the pandemic, which prompted companies and their business executives to flee from dense urban cities in the Northeast and Midwest to warm South Florida cities, especially cities in Palm Beach County.
Related quickly moved to expand its holdings in West Palm Beach, buying up three existing Class A office towers downtown: Phillips Point, Esperante Corporate Center and CityPlace Tower.
With a growing roster of private equity, finance and tech firms, West Palm Beach continues to attract companies seeking to relocate, many of them pursuing clients who also moved to South Florida.
A top Related Cos. executive has noted the seeming overnight success of a city he's spent years trying to grow.
In a previous interview, Related's Ken Himmel said that in the more than 20 years since Related first came to West Palm Beach, "we've been hoping something would break" to justify the company's deep investment in the city.
That time finally had arrived.
"It's been an incredible feeding frenzy," said Himmel, chief executive of Related Urban. "I've never seen anything like it."
Planning for future growth in West Palm Beach
Earlier this year, Related Cos. took the first step toward its plan for more high-rise buildings at The Square when it obtained a zoning change that would allow the construction of towers rising 25 stories.
The rezoning does not include the site of the proposed 515 Fern tower, which can rise up to 25 stories and 380 feet if it is Class A office space, said Rick Greene, development services director for the city of West Palm Beach.
Related partner Gopal Rajegowda told a West Palm Beach business group in April that the company was working to transform The Square into "a place in the city."
But Related isn't just focusing on its holdings at The Square.
Just to the west, the company is part of a group that purchased the Reflections office buildings along Clear Lake. Reflections is expected to ultimately be transformed into residential towers, in part to accommodate the expected need for housing with the creation of the University of Florida's graduate campus in this section of the city.
Meanwhile, on the eastern edge of downtown, Related has started construction of One Flagler, an ultra-luxury office tower rising 25 stories overlooking the Intracoastal Waterway near the Royal Park Bridge.
A company spokeswoman said the 270,000-square-foot tower already is 65% pre-leased.
Alexandra Clough is a business writer at the Palm Beach Post, part of the USA TODAY Florida Network. You can reach her at firstname.lastname@example.org. Twitter: @acloughpbp. Help support our journalism. Subscribe today.