Kayne Anderson Capital Advisors of Armonk, N.Y., is moving its real estate private equity group to Boca Raton, a sign that the trend of financial firms fleeing the Northeast to save taxes continues to boost Palm Beach County’s business fortunes.
“It falls in line with our big push tailored around this industry,” said Kelly Smallridge, president of the Business Development Board of Palm Beach County, the county’s chief business recruitment arm.
Albert Rabil III, managing partner and chief executive of Kayne Real Estate Private Equity, said his group has considered relocating for the past four years and looked at Texas, Scottsdale, Ariz., Denver, Colo., and Tampa.
Plans are to open an office at One Town Center, a 10-story office tower near the Town Center mall, by October.
The deciding factors for Palm Beach County? “Weather, lifestyle, taxes and a pro-business environment,” Rabil said.
In addition, “Palm Beach County has been incredibly welcoming to us,” Rabil said. Assistance with housing, schools and other needs encouraged his team to make the move.”It’s an adventure we’re embarking on together and the (BDB) played a role in making it happen.”
Of 25 Kayne employees, 23 are making the to 13,500 square feet on the third floor of One Town Center. Kayne has a right of first refusal for the remaining 6,000 square feet on the floor. Over time, the group could lease up to 20,000 square feet and employ 50 people, Rabil said. Plans are to have employees move before the start of school in August. The company already is leasing temporary space in Delray Beach.
Although some executives will live in Boca Raton, others will live in Delray Beach due to Atlantic Avenue’s allure, he said. Rabil himself is renting a home in Boca Raton but is building a home in Delray Beach.
Closing the deal with Kayne required work on the BDB’s part, especially when it came to satisfying the concerns of executives who were interested in the quality of the region’s schools. “Education is very big among this population,” Smallridge said. Although she said she showed Kayne officials around West Palm Beach, “what it came down to is the quality of schools in the Boca Raton area.”
For months, the BDB has waged a campaign to entice firms in the Northeast to flee high corporate and personal income taxes and come to Florida, which has lower corporate tax rates and no income personal tax.
Kayne Anderson Capital manages $20 billion in assets. The real estate private equity division moving to Boca Raton manages more than $1 billion in assets, with the division’s expertise being investment in off-campus student housing projects, although the division has investments in medical office and senior care properties as well.
Business recruiters had hoped to keep the empty One Town Center available to corporations seeking the entire 195,000 building, but big corporate moves are less frequent in today’s business environmen.
Kayne Anderson is the first tenant to take space there and Rabil said that other Kayne Anderson divisions might make a move.