Varonis, an international technology company that’s spent the past 20 years in New York, is relocating to Miami after a number of its clients set up shop in the Magic City, a sign of how the area is luring business.
The firm is moving into its new headquarters at 801 Brickell Ave. in Miami's financial district and Varonis co-founder and CEO Yaki Faitelson told CoStar News he personally made the move last year.
Miami is "becoming increasingly and amazingly friendly for business," Faitelson said in an interview, “Customers love to come there. A lot of talent wants to relocate there." He cited a strong quality of life for attracting clients and talent, while others have credited public safety and the lack of a state income tax.
Faitelson helped launch Varonis in 2005 in New York. While the publicly traded company plans to keep an office at 1250 Broadway in Manhattan, it has grown to have offices around the world, providing data security services to over 7,000 clients. However, Miami is central because customers "love to come meet me" there, Faitelson said.
Over the past few years, Miami and South Florida, more broadly, have become a landing pad for companies and executives looking to expand or relocate their operations. The names include a who’s who from the financial, tech and professional services worlds like Microsoft and Apple in the tech space, financial companies Apollo Global Management and Blackstone, major law firms such as Kirkland & Ellis and Sidley Austin, and most recently, a new Amazon office in the city’s arts district.
One of the biggest moves came when billionaire Ken Griffin’s hedge fund Citadel and sister company Citadel Securities announced their headquarters relocation from Chicago to Miami in 2022.
That was followed last year by billionaire New York developer Stephen Ross’ announcement of Related Ross, a new venture focused on South Florida and West Palm Beach. Citadel and Related Ross are currently in the early stages of building a new supertall headquarters tower for Citadel on Miami's waterfront.
How long can appeal last?
But now with the end of the pandemic-era boom, it has become a growing question over whether the region can hold onto its gains since 2020.
Those were “extraordinary years for us both in leasing activity, absorption, and the migration that we saw come into the marketplace,” said Greg Martin, the principal and managing director of Avison Young’s Fort Lauderdale and Boca Raton offices, during a panel last month. “I think we're taking a breath in South Florida right now. That's exactly what happened in the last 12 months, particularly. The rest of the nation caught up with us.”
In Miami, Varonis’ move comes at a time when the local office market has started to moderate, with leasing activity slowing since the highs of 2022 and 2023, while rent growth is down to about 3%, from over 9% three years ago. The influx of new companies drove rents at some trophy buildings to nearly $200 per square foot. But now that fewer companies are moving, the city is adjusting to a slower pace — one that saw developer Swire Properties cancel a planned supertall office tower just steps from Varonis’ new location.
“The cancellation of one proposed tower reflects cautious development planning rather than weakening market fundamentals,” said Stephen Rutchik, vice chairman at Colliers, in an email to CoStar News. Rutchik, who represented the landlord in Varonis' Miami office lease, added that companies like Varonis are being more strategic in their choice of office space as part of a wider flight to quality, rather than a market downturn.
“Miami continues to be a destination for businesses seeking premier office environments,” Rutchik said.
Over the next few months, Varonis is planning to bring about 100 employees to its new Miami headquarters. Some of the team’s key people have already relocated to Miami, Faitelson stated, and while he said he didn’t want to give any bold statements, “to go from zero to 100 employees very fast" and to have top executives living in Miami "is a big thing."
The company is in the midst of building out its space, with the expectation that it will move in prior to the end of the year. Varonis was represented by Newmark's Clay Sidner in the lease deal.
Varonis’ office at 801 Brickell will host “key functions” such as professional services, marketing and human resources, Faitelson said. “We like Miami. We like everything about it," Faitelson said.