Legacy: The Legendary Stephen M. Ross on Building a Real Estate Empire and Florida’s Next Great City

When we went on air in 2020 our vision was to offer you a seat next to the best minds in the world of commercial real estate to seek wisdom Experience and advice about the state and future of the industry On this episode Five years after our launch one of the finest examples of the kind of insight this show is designed to bring you Up close and personal with one of the greats now. It's fortunate enough to find a career that I really fell in love with That's Stephen Ross the CEO and chairman of related Ross the largest commercial property owner in downtown West Palm Beach and a major developer across South Florida He's renowned as the founder of the related companies which he started in 1972 and now holds some 60 billion dollars in residential retail and office assets On top of that he owns the NFL's Miami Dolphins among other sports and entertainment properties While serving as a major philanthropist who champions numerous humanitarian causes as well as efforts and sustainability Education and the arts I could go on but instead let's hear from the man himself Coming up with a live audience of clients colleagues and friends at one of the latest class A developments in West Palm Beach We meet developers Stephen Ross to learn from his more than half a century of business and real estate experience I'm Spencer Levy and that's right now on the weekly take Welcome to the weekly take and we are privileged to have with us today None other than Stephen Ross. Thanks for hosting us today. Well, thank you. Thank you Spencer inviting me and it's great to be here. Well, it's great to be here on a beautiful day in Palm Beach County We're here today in a Growing market you have some of the finest real estate if not the finest office real estate in others in the market Why are we here in Palm Beach County today as a changing market for tech innovation and otherwise? Well, I'm originally from Florida and it's just a great place to do business The companies haven't really moved here in the past to do business and attracted a lot of back office But it hadn't really attracted many businesses till really the Pandemic and after that how the world has just changed so much you know politically economically socially things that are going on in this country and when there's change there's opportunity We had a small office here at city place. It was more like an outpost if you will We developed this development here at city place of which is was roughly 500,000 square feet of retail some residential then built a couple office buildings but are all kind of a low Rise type of development the problem was we were way ahead of ourselves So we set out to bring in a hospital. We brought in Cleveland Clinic Which is one of two best hospitals in our country Then we had a look at education is that's what companies would be looking for so one from a Secondary education we looked at bringing in Vanderbilt University bringing in their business schools engineering all their graduate schools here to West Palm That deal has been improved and then we had to bring in K through 12 because you're not going to get People wanting to move here unless there's great education. That was probably the most difficult part Also, we had a deal with recreation one of our biggest challenges is really Creating a place where young people want to be and that talent will come to and I think when you walk around you see here And the great retailers that were attracting As restaurants, I mean that's key today and you see the quality of what we're doing in the office buildings it's the story is starting to you know unfold and People are reading about it and It's just an exciting place to be the last part the cultural values the restaurants and San Francisco popped in my mind And I popped in my mind not just because of the wealth the tech the education It also popped in my mind because San Francisco and Silicon Valley they have a relationship with each other about an hour apart and I see something similar here with Palm Beach County and Miami and you have the right line the beautiful train right downstairs. Yes It's similar but when you look and see what issues they had there's no really heart in Silicon Valley I mean when you live there It's kind of all these isolated like suburban communities and And that's what we have to create here, you know, especially when you compare it to Miami That's what we're really you know working and doing in terms of bringing these type of restaurants and Manatees that people would expect and really created because it can't be all Miami It's Miami is so unique. So you've got to have a real lifestyle that really attracts young people and one of the beauties of West Palm Beach as part of Palm Beach County since walkability You can't walk Silicon Valley. There's everything's driving, but this is a creation of a city Like that that's walkable Walkable and also right on the water Mm-hmm and you know the attractiveness of the ocean and water that always you know has that mystical feeling of people want to be near it And I think that's really adds to the ambience of what we're creating And we can actually see the water from here. It's everybody wants to stand up But I mean from the from the buildings the high rise office buildings. You'll see the ocean as well as the interco Let's dig in for just a moment on a couple of the areas we just talked about it other cities I'm thinking about include Austin, Texas include Nashville include Charlotte Maybe Dallas even because Dallas is larger, but nevertheless Dallas actually started as a financial hub and expanded kind of like West Palm Beach We're Palm Beach started as financial and expanded the innovation. How do you see these other cities? comparing to Palm Beach You know if you look today and you think today where do young people want to be today? Mm-hmm and the overwhelming choice today I'm gonna talk about college graduates and where they want to be. It's probably New York City Mm-hmm, okay, but the problem is when you live in New York City at some point You can't afford to stay there And well, it's attracting the young people today you know People say with no one really there's not a talent base in Florida New York City It's people after living there. Where would they rather go to Dallas? Nashville Charlotte or Florida? Everybody has a good feeling about Florida And I think that this is really the ability to where Where young people want to be. Mm-hmm. Don't forget old people want to be with the young people You know and and creating that environment and understanding that It'll attract a lot more people and businesses So the whole idea is really How do you track talent? And a lot of it is attraction retention but also Creation and creation is the universities and we have Vanderbilt what you just mentioned But you spent a couple years at University of Florida. I mean, that's the untold story here is that Florida has great schools And but the fact is they don't have the jobs and so therefore they have a talent drain of people and now Being able to bring these companies you know to Florida and knowing they're coming for talent and therefore Florida be able to retain a lot of the of their own Residents that have grown up here and want would prefer to be here. Mm-hmm. So You start putting all this together you can kind of put together a story It's very compelling the companies to say hey, this is a place we want to grow from a business perspective And that has never been the case in Florida before Speaking of the other universities just to mention a few University of Florida University Central Florida the you University of Miami down the street all of these are creators But a lot of the things you've done here are Tainers of that talent which is the cultural amenities which is the K through 12 schools? Well, it's not retaining. We got to get them here Once they do graduate and make it a place where they want to be But also from all over the country and I you know, I think when Vanderbilt University can make a decision to come and open up their only campus Outside of Nashville. That's as an awful lot. They see the growth potential It's here in Florida and they don't have branches or extensions anywhere else in the country I mean, this is going to be a real campus for them at the same quality level as it is in Nashville And so that that's I think very important state universities can't really expand Into other states. So it really takes a private university. So the question is how many great private universities are there That are in a position to expand So I don't really see this as a big new trend because of the limitations that are placed upon the schools and the ability to really grow But I think that's what makes it unique having a Vanderbilt And I think going to we talked about universities. Let's go to health care for just a moment Bringing the Cleveland Clinic. How'd that come together? Well, I mean Having lived here and in Palm Beach they used to say if you could sick where do you go and the answer was the airport Because there aren't a lot of great You know Hospital there aren't any good hospitals really here in West Palm Beach So it was you know the question was to recruit and find a great hospital and You know when you're really trying to change things People want to be familiar with the great brands, you know, so you talk about Cleveland Clinic I mean, it's always either what's the best hospitals in this country. It's either Mayo or Cleveland Clinic Those are considered the two best hospitals So we were fortunate enough to get Cleveland Clinic And then schools the same way, you know, what is it from a private school? What are the great brands? You know besides the eastern iveley schools Stanford then your Vanderbilt's right up there is probably comparable with those great, you know great institutions So You know having brands of people are familiar with that can read they can relate to You know makes it a lot easier or sell because people kind of know what they can expect You know from that Let's move to the place out of this and I know that you're bringing some great concerts here through live nation And I know that as the owner of the Miami dolphins and hard rock you've brought f1 into the area How does all of these play elements work into your vision? There's a lot more in life than just working, you know People want to play and joy and have fun and I think that you have to really That all goes part of the kind of what you need to create great cities, great places How you put it together in a package There really attracts everybody that's diverse every city that you think of the great cities in this country You can identify a certain thing that they're known for Look at New York is probably the most diverse city There's the entertainment the food Everything what do young people want to be there because those are vitality you got to create that vitality within cities How are you trying to bring a broader entertainment experience given all of the assets in the neighborhood? Well, this is a big area and you know You want to create a heartbeat as part of it But each each city has his own uniqueness to it and you go to Delray They have a Lanark avenue and you've been there at night with all the young people. It's exciting. It's one of the most exciting places in Florida but Since it's going to be throughout the county and this county is a very large county It's the largest county in the eastern United States If you drive from the southern end of the county to the northern end and 95 nonstop it'll take you 50 minutes at 80 miles an hour So you have to have different cities that have diverse type of entertainment and Places Because and people will be attracted to those different places those you know You have wellington with all the horses you got the schools that run bokeh and with Delray's next to bokeh So I mean it's not going to just be West Palm Beach. I mean that's the core of it and the center and the spokes go out Probably one of the most important things that today is the fortability of housing and the diversity of the housing And I think that's one thing that if you look and see the cost and the diversity of housing that's available Here in Palm Beach County It's quite unique when you talk to corporations Because they're looking to see what their employees can afford because it's an affordability issue and the cost of housing today Which is probably going to be one of the most important aspects going forward the greatest needs um And so I mean we've created a venture Of with Lanard to provide Workforce housing. So there's choices housing Rettles townhouses With the affordability issue you know really prime consideration You're one of the most successful business people in the world And you are still running and gunning and I say this with a great respect wow your energy your vision Doesn't stop what keeps you going Well, I mean you know, I think you want to do something that has an impact in life and uh It's not about the money It's really doing something that can have an impact that can make the world a better place and uh, I guess uh That's more important than you know You're plenty of time you take your dirt nap to counter money, right? but Um, it's really you know doing something that you can look at and be really it's challenging and impactful and I think being able to really build cities and and Environments and creating you know exciting things for other people uh, it's something that's uh You know really has driven me so It's kind of a work to love we have several uh Younger individuals in the room here today and they they look at you with great admiration What do you say to them if they want to be the next Steven Ross today? I mean you want to be doing something that you love you have passion and doing And if you love what you're doing and you're good at you're gonna succeed and I think there's nothing better than Really doing something that you really have that passion to be doing in life And how long have you had that passion um Steve because you started off as a tax attorney And you started uh the related company in 1972 so you started off as a lawyer then you became a advisor then you became a real estate company When did you realize you had the passion for being a great real estate developer? I guess success breeds success You know and I think the more success you have first when you start you know any career Anything you gotta sustain yourself. I start with no money and and you know I first you have to worry about making a living and then you can worry about having a family and all that So I mean it started with that and then I was fortunate enough To find a career that I really fell in love with I guess I believe in the philosophy That you don't do something that you can hire somebody who can do it better than you can do So you gotta find some find somewhere area that you really have passion and you can do better than anybody else If you have the passion you're not really working You know so I mean I love what I'm doing so I don't ever feel I'm working a day in my life you know So uh and I think when you're working with other people And they're like-minded I think you you work together as a team. It's not about an individual And really um I think bringing people together to work together and what you can accomplish if you're all you know in and for the right reasons Um it's unlimited It's boundless. So we're gonna get to the Miami Dolphins at a moment because I as I warned you in advance or a few disgruntled New York Jets fans sitting out there Ready to disgruntled dolphin fans ready to get a piece of your mind on that but before we get a piece of your mind I'm gonna just go back to what you said about there's something more and I would also be remiss not to say there are a lot of People bleeding blue in this room. Uh Michigan grads and you are the number one benefactor of the university name is uh proudly on so many things Uh tell us about your relationship with Michigan. Why that's so important to you Well, I guess I mean it was born and grew up in Detroit and uh I moved to Florida when I was 15 Um, but always wanted to go back to the University of Michigan I guess I went to a football game. I know I was eight years old and fell in love with the place, you know and Um, it's a great institution Um, and it did a lot in helping my career and I really believe in giving back and uh, I guess I don't know if you read you into Michigan My son's there. My son's there. It's like a cult that goes to Michigan I've heard always wherever you are go blue, you know, I mean how often does somebody stop you never just say go blue I mean, I'll just be walking by and someone will just walk by go blue. They're recognized me I mean it happens all over anywhere in the world. Probably of any school. It has that more of that cult feeling than any other school and uh, it's it's a great place. They had over a hundred thousand applicants uh this year. Mm-hmm So it's um It's hard school to get into. I mean, I know I couldn't get in today if I was graduating, but you know I mean And it's it's such a driver not only of great minds of great sports But it actually is the number one market in Michigan is Ann Orber And the university's clearly driving that and so far beyond that Michigan's has its problems as you share problems But probably the best thing in Michigan is the University of Michigan today Though Detroit has had a renaissance of sorts and led by Certain financial services companies and some of the auto companies saying so I'm bullish on Michigan, but that it clearly has its issue I mean, I'm bullish. It's difficult to bring back a city like Detroit Um, I know I've created an innovation center um And which is an economic development tool of the University of Michigan to open up in Detroit and gave the lead gift and got a hundred million dollars from the state and uh, and I put in a hundred million dollars and to try and bring back and revitalize Detroit But it's a lot harder to try and revitalize a place like Detroit And it is to grow a place like like West Palm Beach And I can tell you it's getting people to invest and believe in something like that And bringing it back it may be a great story to bring back a great city To its former prominence, but uh It's easier said than done going back to Palm Beach Palm Beach is obviously on an amazing trajectory now and related Ross is a big piece of that But Palm Beach and West Palm Beach itself has had a troubled history itself When you started in this market 25, 30 years ago Oh yeah, I mean that's what I said I was ahead of my time I mean Florida has been a great growth state But people never looked at it from a business perspective As being a place that businesses really grow and come here So much changes occurring in this country today That when you look around I can't see a better place To really grow and start a business, start a family than here in South Florida We're not going to mention any specific tenant names here, but innovation, tech, the gold coast This is the next level for Palm Beach County, the next level for this Southern Florida region because we have been driven or it has been driven Primarily by financial services firms Tell us about that shift from one or the other or maybe both Well, I mean when you see what's the change that's occurring in the country And you see what's going on in California Whereas California was the state where you know all technology really was starting where young people wanted to be But then it became a place that's very difficult to do business today And even though it's a great place They're their own worst enemies And so businesses are moving out You see places today like what's going on in New York City today with the election I mean you go too far to the left Businesses are going to shy away from being there and growing there and I think that's what's happening in California I mean it's not Their companies aren't going to pick up and move but the question is they're large companies and where their future growth is going to be where they're going to really you know Point that And the places they're pointing today include Austin, Texas, Nashville, Charlotte, Dallas. We want Palm Beach County to be part of that. Right first love That's our competition. You know, I think we can win Well speaking of competition at the dolphins have been a tremendous investment for you hard rock stadium F1 Tell us about how you got into that and how you see that as a driver of this community I love sports and I you know, I played football but not being any good Is it hey, I went on a team one day, you know And so it was like a dream and the opportunity to buy it I came up and I could afford it But I also saw it being a real estate developer of the importance and You know, it's just not about winning games. It's the impact you can have on the community and There's nothing that brings a community together and the community here being South Florida and how you can impact the community and so The opportunities of owning a sports franchise are great I mean nothing like the National Football League Because it is so popular today and it is continuing to grow and the love of the football in South Florida is Good as any place in the country. Well, we've been able to do is really bringing the community together there both in terms of bringing other events I've kept the Miami Open tennis tournament there and they were going to move Because they couldn't stay and keep us cane and Miami and I got them to come to our stadium He has opposed to moving to Orlando or Mexico with a tournament was going to go that I saw the economic benefits and With Formula One and what it does for the area we could put on an event, you know, and our stadium Not in the stadium, but around the stadium and it's now probably The most important form to one race in the country and we're three years old before years into it So it it shows you what sports can do and the impact can have on a community and bringing the community together and also Doing things to economically develop and Rise all ships if you will In addition to everybody that loves sports But this is also a real estate show. This is what we're talking about and when you buy a professional sports team I think a lot of people see the Business of the team, but there's also the business of real estate around it. How much of Professional sports ownership would you say is Changed now that it's a real estate story as much as perhaps it is a sports story one of the reasons is the Importance of media and what those media rights are worth. That's what's really Kind of elevated all sports people wanting to own sports teams Because they see the value of the media dollars. I don't know if exactly agree with everybody But today entertainment is such a big portion of people's lives, you know No matter what the economy is it's the diversification and And sports certainly today is the common denominator And so I think that'll continue to grow and therefore all franchise values are continuing to grow Because of that and we've done a lot in Miami more so than any other Place in the country by bringing it all together as an entertainment center. I don't know If it works everywhere, you know Because the capital investment is so great. All of a sudden you're just not going to be and we're going to find the land That's big enough to really create, you know where you can build a the synergy between Sports and business and living but I think we were fortunate that when you know when I bought the dolphins that we had You know the acreage that I bought with it that I could develop something even though it was kind of in a low income area It's kind of hard to do that in downtown areas But I think people are going to try and you're going to see a lot more diversification with stadiums and real estate development Let's go back to Palm Beach. We've talked about healthcare, affordable housing infrastructure Transportation, tech so many topics What's the first thing you want a potential tenant to think about when they think about Palm Beach County? Today the theme that everybody wants is really inclusive growth You know and living in a safe secure environment You know the livability aspects of it and I think If you don't really concentrate on that You're not going to find it a place where people really want to be Live worker play you can't neglect any of those aspects You add the safety and security that people expect and demand Because you're not going to find any place growing without that But but also it has to have We're at a heartbeat to it where people really want to participate And in the community In the future of office is a Probably been the biggest ping pong ball since covid of any topic within our industry and a lot of people have been down on it But nevertheless we're sitting here at one of your assets in Palm Beach and you have the highest rents Not just in West Palm Beach but in Florida here And you have tremendous demand here So that's one side of the story but the other side of the story some people are negative on the future of office What do you say to those people? I'm very positive on the future of office I think first of all Any company you know you have to build a team And you can't build a team unless you're working together And you just can't do it by looking at a screen You got to be there together and it's what doesn't happen You know it's like Going to the water fountain you know the conversations that occur in the hallways I mean those are that's the important things. It's not the meeting itself And companies cannot grow and you can't succeed without believing you're part of a team And you can't do that without being in a central place And I think we're kidding ourselves that people are going to work at home And really you're going to be productive and you're going to accomplish and you're going to be innovating and Creating because you know no one individual can do it himself And we obviously have great models here in Palm Beach You have great models of everything that you've done in New York and elsewhere But there are some buildings that may not have those amenities may not be in the right sub market What's the future there? Are they going to be knocked down? Are they going to be converted into multi-family Yeah, I mean if you can adapt the use of older office buildings That work for residential That's great, but I think it costs typically Unless it's some kind of unique building as much to build new than it is to Rehab something, you know, I think you'll find a lot of office buildings knocked out Yeah, they are obsolete And I think a lot of the issue with office buildings the cost factor is the physical cost The inflation that we've gone through the last couple of years the cost of labor the cost of materials interest rates So just a big if you don't mind a macro question How do you see the economy today and how should I mean today? I mean, I don't think people today the uncertainty that exists today We haven't seen this type of uncertainty, you know between the tariffs You know and what's going on in Middle East and And taxes and which direction we're really going as a country and you know as really a world that You know, I think people are concerned, you know, I think that's why you know you talk about today with all the inflation or where we're going Still talking about reducing interest rates, you know, and the Fed you know is a big thing because we do have to worry about inflation I mean you and so many of these things are so inflationary that we're proposing Um, and what the impact of that is so people are I think today are very concerned About where they are and when you don't know you don't make decisions you don't make big decisions And at the same time Technology is changing so much of the world and no one really knows what the impact is going to be of AI You know, where the future jobs? What are they going to be? I mean, it's incredible. We're in a period of time That I don't think any of us have ever seen before and so the with that uncertainty You know you got to be very conservative and and people are will just lead to recession I don't know things today if we're keeping it all together and But at the same time With all this inflation and now reducing it all to talk about reducing interest rates today You know That tells you Nobody really knows where we're going And because of that uncertainty the playing field of other developers has gotten small or not that they've all gone out of business per say But they've stopped building most of the large developers or many of them are been sitting on their hands But you have been moving forward and in addition to some of the great office projects including the one we're sitting here today You also are building new condominium projects new multifamily projects. How are you able to do that? Dispirellion is it? I mean Fortunately This is one place that's growing you know is one when the few places that really feel that growth occurring You know if people are coming here and moving here you have to have all the retail you have to have the hotels and What's not slowing down though is people are still looking for entertainment and even in bad times The entertainment sector has never really doesn't get hurt Because no one's gonna sit home and do nothing right so you'll spend your dollars your marginal dollars on entertainment So I mean that's one reason why you know tourism is also a very you know Important Industry here in Florida and what you have here is clearly this mix a lot of the midwestern cities or maybe even to some degree Detroit That has a lot of momentum behind it doesn't have the tourism it doesn't have the weather don't have the ocean and so There's so many things you're that are Independent of many of the things you're trying to do in the business community. Well, that's one the reason why we're here That's why people are interested in Florida exact and why this change is occurring why this growth is occurring so it's um You know but at the same time Nothing goes straight up So I mean you have to be conservative in your viewpoint of you know what you're investing what risk you're willing to take In this environment But growth is certainly a very helpful factor and so I think if I were to sum up that comment growth Is the answer it's the only answer I believe it's the only answer from a macro perspective But even from a micro perspective if you have high interest rates high cost of labor high cost of materials If you can justify the rents because of growth That solves a lot of problems right and you have to be efficient You got to really know what you're doing, you know and today with a lot of with a lot less development going on You got to know how to buy and who to use what contractors to use Because you can afford to do use the best you know always at the end of the day the successful ones are usually the high quality ones And also the great operators how much more of an operator would you say you are today than maybe 10 20 years? I think the important thing is you have to have a long-term perspective I mean you can't be a speculator and so everything that we do in building the buildings and owning them We don't buy them to flip them you know we buy the buildings to own them long-term You know other than a kind of minium, but they're the market is and you want to have a certain amount of presales but you know In life having a long-term perspective I think is what Winds at the end of the day. I just want to reiterate the point Mr. Ross just made long-term wins long-term thinking wins A lot of people get blinded by the light of the short-term flip, but that is not why Mr. Ross is sitting here today First of all, thank you again for having us here today any final thoughts that you want to share with our audience Well, I mean you just say when I've been talking about the whole time is sewing bomb beach county So The bottom line here is for a lot of life. You know, I believe it, you know I believe in that and the dolphins are gonna win There we go. See that we knew we're gonna get that in there So on behalf of the weekly take what a privilege today to have Stephen Ross this CEO and chairman of related Ross the founder of the related companies the owner of the Miami dolphins The host of our clients and colleagues at his beautiful properties here in Palm Beach County. Let's hear from Mr. Ross Thank you for joining us on this special weekly take event Which by the way is not only available on all our usual podcast outlets, but on our newly expanding platform on YouTube as well You can also find more content at our homepage CBRi.com/theweeklytake where you can send us your feedback Subscribe to the show and listen to our informative back episodes with other great real estate minds And archive that's now five years in the making we'll be back next week with more So tune in and we'll see you then I'm Spencer Levy. Be smart. Be safe. Be well. 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