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Goldman Sachs, the worldwide investment banking firm, is mapping plans to open an office in downtown West Palm Beach, a move that could expand South Florida’s status as a frontier for the financial services industry.
A person familiar with the firm’s plans said Wednesday that 100 traders and salespeople would occupy the space that would bring the firm closer to institutional investors such as hedge funds operating in South Florida, Latin America and the Caribbean.
But the initiative is in its “early stages,” this person said, declining to be identified. There is no immediate timetable for the move.
“You see hedge funds based in the New York area have moved to Florida,” the person said. “[Goldman] would be able to be closer to that client base.”
A Goldman Sachs spokesperson declined to comment.
Last month, Bloomberg News reported that the New York-based firm was near a deal to obtain space at the 360 Rosemary office tower in downtown West Palm Beach operated by New York-based Related Cos. Goldman Sachs declined to comment on that as well.
For years, the firm has maintained a South Florida presence through wealth management advisers who counsel well-heeled clients from offices in West Palm Beach and Miami. Worldwide, the firm employs more than 40,000 people and earned $6.84 billion in the first quarter of this year on revenues of $17.7 billion.
Kelly Smallridge, president and CEO of the Business Development Board of Palm Beach County, declined to discuss the Goldman Sachs reports, saying she “can’t comment on anything that’s not final.”
But for months, it’s been known among various commercial real estate brokers and development executives that Goldman has been scouting locations in South Florida. First reports indicated the firm wanted a home for its asset management division. But the New York Post reported two weeks ago that the initiative waned when its chief advocate left the firm.
The latest initiative, which focuses on traders and salespeople, was first reported this week by the Business Insider website.
In a telephone interview, Smallridge left no doubt that her agency, in conjunction with various allies in the private and public sectors, consider the recruitment of financial service firms a top priority as they seek to upgrade the county’s economy and job market by attracting businesses that pay employees higher salaries for more sophisticated skill sets.
South Florida has been a prime relocation target for a number of firms seeking to flee crowded urban areas and rising taxes in the Northeast during the COVID-19 pandemic.
Point72 Asset Management plans to open an office at 360 Rosemary. Elliott Management, which manages $41 billion, is moving its headquarters to West Palm Beach.
John Boyd of The Boyd Company, a corporate relocation adviser based in Boca Raton, said the prospective Goldman Sachs move offers “reinforcement” to the notion that South Florida is a “global banking and financial services powerhouse.”
He predicted that Goldman Sachs’ arrival would add to the momentum of new arrivals in Fort Lauderdale, which has drawn smaller financial firms, and Miami, which has become a new Mecca of sorts for both technology and Wall Street firms.
“This is really a terrific endorsement,” he said. “Goldman is a company that other companies look to in terms of their corporate behavior.”
“What’s significant here is Goldman has had a precedent of successful operations in Palm Beach,” Boyd said. “They view Palm Beach as consistent with building their corporate identify and their corporate culture. Their traders like living and working in Palm Beach.”
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The arrival of 100 highly paid employees — most all them with high net worth — means they will buy upscale homes, pump lots of money into retail and hospitality, and generate new tax revenue, Boyd said.
Their contemporaries are growing in number, Smallridge said.
“We’re picking up more and more leases every single week and month,” she said. “It definitely is not a short-term play. It will not end when COVID is done and gone. These companies are signing eight- to 10-year leases.”
She said 360 Rosemary Square, which has 200,000 square feet of office space downtown, will be “fully leased” by October of this year.
“The vast majority of the clients are all coming in from the Northeast,” Smallridge said. The marketing strategy, she added, is to recruit firms with the help of Enterprise Florida, the state’s economic development arm. in financial centers such as Manhattan; Greenwich, Conn.; and Boston.
“The larger the firm and the bigger the name, the more real estate doors it opens for Palm Beach County because it validates South Florida as a great competitive location for the financial services industry,” she said “The more we build critical mass, the more comfortable firms feel in coming into this area.”