Andreessen Horowitz Picks West Palm Beach for Its Defense Practice. Here Is Why That Matters for Industrial Space

Andreessen Horowitz, the venture firm that manages more than $90 billion, is opening a regional headquarters in Related Ross’ CityPlace Tower at 525 Okeechobee Boulevard in downtown West Palm Beach for its American Dynamism practice, which invests in defense, aerospace, manufacturing, supply chains and industrial companies. Traded reports that the size, term and rent were not disclosed, and the office is expected to open in 2027. The move is an office lease. Its consequences reach well beyond the office market.

Why a venture firm moved its defense team here

The practice invests from a $1.176 billion fund, part of more than $15 billion the firm raised this year. Its co-founder, general partner Katherine Boyle, framed the decision around being close to the customers: the military and its contractors are not moving to Silicon Valley. Florida ranks fourth nationally in defense spending, hosts 21 major military installations and three of the country’s 11 unified combatant commands, and state figures put the sector’s economic impact at $102.6 billion a year. This is the firm’s second South Florida office. It leased 8,300 square feet in Miami Beach in 2022 and gave the space up in 2024 as the crypto-era wave of venture offices cooled.

The office market it is returning to is tightening. Cushman & Wakefield reports Palm Beach County office vacancy fell to 11.9% in the second quarter from 13.5% in the first, with average full-service asking rent of $57.75 per square foot and about 1.4 million square feet under construction. Firms relocating or expanding from other markets are a large part of that demand, and the best downtown towers are where they land first.

Where the industrial connection comes in

Defense and dual-use startups do not stay in office towers. The companies a fund like this backs build drones, sensors, propulsion systems, hardware and components, and they need flex, light manufacturing and R&D space with power, clear height, security and room to test. In Palm Beach County that is the tightest part of the industrial market. Cushman & Wakefield’s second-quarter figures put manufacturing vacancy at 1.6% and office-service and flex at 4.2%, against 10.0% for large warehouse and distribution buildings. When capital flows to hardware companies, it eventually shows up as demand for exactly the buildings that are hardest to find.

Palm Beach County already has an aerospace base in Jupiter, Riviera Beach and around Palm Beach International Airport. A major investor planting its defense team downtown adds a funding source within driving distance of those operators and of the startups that want to sit near them.

What this means for you

If you own flex, R&D or light manufacturing space in Palm Beach or northern Broward, know your building’s power capacity, ceiling height, loading and security features. Those, more than rent per square foot, are what an engineering-driven tenant will screen for. If you run a growing hardware or defense company, start your space search earlier than you think you need to, because the right building may not be on the market when you need it. If you are an investor, small industrial buildings near the county’s aerospace cluster deserve a closer look.

AXCESS Commercial works with owners and occupiers of flex and industrial space across Palm Beach County, leasing buildings, listing them for sale and managing properties for owners who want to capture this demand.

Talk to our team about leasing, listing or managing your Palm Beach County property →