5 Questions With Related Companies’ Jordan Rathlev
A sharp shift in white-collar work means office landlords across the country are struggling. But you’d never know it from Related Companies’ ambitious plans to reshape the skyline of Downtown West Palm Beach.
The developer is moving forward with two office towers at The Square, its mixed-use project on the site of a former AMC theater. One building, the East Tower designed by Arquitectonica, will include 485,000 square feet of office space and 20,000 square feet of retail. The other, the West Tower designed by Kohn Pedersen Fox, is designated for 480,000 square feet of offices.
Related has begun demolition of the former cinema on the site.
The company already developed and owns a variety of West Palm Beach office properties, including 360 Rosemary, CityPlace Tower, Esperanté Corporate Center and Phillips Point. The developer is also completing One Flagler, a 25-story office building set to open in 2024. One Flagler is 75 percent taken, and 360 Rosemary, which opened in 2021, is 100 percent leased.
Or 105 percent, actually.
“We say 105 percent, because we had to convert the top floor of parking for Related’s offices,” says Jordan Rathlev, senior vice president of Related Southeast.
The executive, who operates out of the company’s West Palm Beach office, spoke to Commercial Observer about Related’s office strategy in the South Florida city.
This interview has been edited for length and clarity.
Commercial Observer: Why is Related so bullish on office?
Jordan Rathlev: Obviously, the national headlines would lead you to believe office is having significant struggles. But it is such a more granular process. It’s not just office, but it’s specific submarkets and product type. We’re delivering Class A++ lifestyle office that’s highly amenitized. We’ve seen an influx of tenants, and we’re really giving employers a reason to draw employees back to the office. With the East and West towers, we’re adding nearly 1 million square feet of new space. We’re effectively doubling the Class A space in the market.
“Class A++” space – what does that look like?
There are two parts. It’s what’s actually in the physical building itself. The East and West towers have world-class designers and will be LEED platinum certified. It’s also the destination. We have 60-plus restaurants outside our front door. We look at ourselves as a service provider, not just a 9-to-5 landlord. It’s how can we can accommodate your needs through the day. It’s really a full-service level of offering.
West Palm Beach’s office market always was known as a move-around market. What changed?
You look at what’s happening around the country, whether it’s politics or certain other factors. When you move to Florida, you get an automatic tax rebate because of the lack of a state income tax. During the pandemic, people recognized that South Florida is not just a leisure destination, and we’re seeing an influx. A lot of our tenants here also have space at Hudson Yards. We’ve done 70-plus office deals in West Palm Beach, and about 85 percent of that is new to market. There are a number of large tenants circling around downtown.
CityPlace opened almost 25 years ago as a mixed-use development. Why is your new vision so much different from the original project?
You look at any downtown around the country, 25 years is a long time. There’s multiple economic cycles. There’s multiple cycles across product types. The natural evolution for a city that grows is to add to its employment base, and to accommodate that you need office space. You think back to the 2007-2008 time frame, the biggest knock on West Palm was there wasn’t enough Class A office space for companies that wanted to move here. We’ve proven that tenants will come here.
Is there a downside to one landlord controlling such a big chunk of the office market?
We’re here for the long term. We want the city to grow with us. And we have the ability to be flexible with tenants over time. If you want a short-term lease with a few seats but you think you’re going to expand in a few years, we can do that. And if you have a lot of space but think you might need to contract, we can help with that, too.
Jeff Ostrowski can be reached at email@example.com.