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Steve Ross Steps Down from Related, Launches West Palm Firm

Stephen Ross is stepping back from his New York-based company, Related Companies, to lead a newly formed, independent entity called Related Ross.

Together with

Good morning. Stephen Ross is stepping back from his New York-based company, Related Companies, to lead a newly formed, independent entity called Related Ross.

Today’s issue is brought to you by GSH Group—a concierge approach to owning multifamily real estate.

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Second Act

Most people in their 80s retire to Florida, but Stephen Ross is just getting started on his second act.

End of an era: Stephen Ross, 84, is stepping back from his New York-based company, Related Companies, to lead a newly formed, independent entity to manage his growing investments in Palm Beach.

A new chapter: Ross’s new business, dubbed Related Ross, is an offshoot of Related Southeast, which Ross rebranded to focus exclusively on West Palm Beach developments. Related Ross, which owns nearly 3 million square feet of commercial space and several luxury residential properties, has quickly become the largest owner of downtown commercial space in West Palm Beach.

Ross's new firm will oversee:

  • Commercial Properties: This includes completed and under-construction office buildings like 360 Rosemary and the upcoming 25-story One Flagler, which is 75% preleased.

  • Residential Projects: The 21-story Laurel apartment building, the South Flagler House condos, and the 26-story Shorecrest condo tower.

  • Future Developments: The firm will also start construction on 10 CityPlace and 15 CityPlace and develop a 20-story Hilton convention center hotel.

Why SoFlo? With deep personal and business ties to Florida, Ross made the state his permanent home during the pandemic. Observing a significant migration driven by favorable weather and tax policies, he decided to capitalize on the region's growth through his new company. He'll also focus more time on the Miami Dolphins and the city's Formula One race. “Doing something impactful. That’s what I’ve always loved,” he said.

➥ THE TAKEAWAY

Looking ahead: Ross's deeper investment in South Florida marks a return to his roots. His transition follows a decade-long succession plan at Related Companies, which is now led by CEO Jeff Blau, President Bruce Beal Jr., and COO Kenneth Wong. Despite stepping down as chairman, Ross remains the largest shareholder and a non-executive chairman at Related Companies.

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✍️ Editor’s Picks

  • Deal flow surges: The June LightBox Monthly CRE Activity Index rose to 93.9 from 87.2 in May, showing growing momentum.

  • Biggest hotspot: Miami's RE market has surged, capturing 5.3% of all US job listings, with average salaries hitting $130K in 2023.

  • Growing another arm: Tishman Speyer (TSIB) expands into debt by hiring Amit Rustgi, targeting CRE loans for major US metros.

  • Where biz blooms: Virginia is now the top state in the country for business growth, thanks to an excellent education system and infrastructure, earning it a record sixth win on CNBC's rankings.

🏘️ MULTIFAMILY

  • New record: Manhattan renters faced more competition than ever in June, with a record-high 24% of listings leased faster than ever—and after bidding wars, with average rents stable at $4.3K.

  • Defaulted deals: Goldman Sachs (GS) and Ballast Investments defaulted on $687.5M in loans, with RBC set to take over 82 buildings in San Francisco.

  • Luxury loophole: Greystar plans to exploit a legal loophole to add 140 units to a 355-unit apartment complex near Google’s offices in San Francisco.

  • Affordable Bay Area: The Pacific Companies is set to develop 781 low-income tax credit housing units in San Jose and Concord with Safehold.

🏭 Industrial

  • Data center dilemma: Data center rents and power costs have surged, with average rents in major North American markets up 20%.

  • Chilling expansion: Vertical Cold Storage is ready to acquire its 10th facility, a 109 KSF USDA-certified frozen distribution center in Dothan, AL.

  • Denver's delights: Adler Real Estate Partners bought a nearly 205 KSF Denver industrial property for $37.7M, fully leased long-term at 98%.

  • Atlanta expansion: Alterra IOS acquired 3 industrial outdoor properties spanning 28 acres in Atlanta for $22.4M, expanding its regional portfolio to 23 assets.

🏬 RETAIL

  • Charging into the future: By 2026, BP Pulse will add over 900 ultra-fast charging stations at 75 Simon properties nationwide, supporting all EV models.

  • Legal battle unfolds: Union Station in DC is seeing a retail revival as Starbucks returns, with foot traffic up 94% amid a court battle over control of the property.

  • Loan default woes: Brookfield Properties defaulted on a $66.4M loan on Town East Mall in Mesquite, TX, representing 40% of the total pool.

  • Mega-merger: Albertsons is selling 63 California supermarkets to C&S Wholesale Grocers for $2.9 billion ahead of its merger trial with Kroger.

  • Reviving retail: Aspen Real Estate bought the Renaissance III shopping center in Las Vegas for $24.7M and plans to renovate the 40% leased property for $7M.

🏢 OFFICE

  • E pluribus unum: Miami's office market bucks the national trend with a low vacancy rate, while the rest of the nation faces a 20.1% vacancy rate, which is only expected to rise.

  • Denver defaults: Denver's CRE market has a delinquency rate of 10.5%, exceeding the national average, and office buildings contribute significantly to the figure.

  • Looping in LaSalle: Namdar acquired a distressed LaSalle St. office tower in Chicago's Central Loop for a little under $20M, a 73% discount from its debt balance.

  • Google downsizes digs: Google (GOOGL) is reducing its office space in San Francisco by 54%, leasing 64 KSF compared to its previous 140 KSF footprint.

🏨 HOSPITALITY

  • Sky-high dispute: Friends of the High Line in Manhattan opposed plans for a development that includes a casino and skyscraper, risking city views.

  • Regulatory rumble: The US Supreme Court's Loper Bright ruling ends a 40-year Chevron (CVX) deference, impacting federal agency regulations, including labor and OSHA.

📈 CHART OF THE DAY

CPI showed a slight deceleration, as the May inflation numbers came in at 3.3%, versus a 3.4% reading in April. This was immediately followed by the release of the Fed dot plot, forecasting one cut for 2024 and a total of four cuts for 2025. 


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