The move by the media conglomerate behind the Playboy brand to the Miami area from its longtime home in Los Angeles lengthens a list of high-profile headquarters departures from California as executives have expressed concerns about the state’s regulations and taxes.
PLBY Group, the global lifestyle company founded by the late Hugh Hefner, has finalized a deal to move its corporate hub to a $100 million office redevelopment project just a few blocks from the beachfront. Company executives said the decision better aligns with the evolving brand as it tries to reestablish its former dominance on the media stage.
Companies such as Tesla, Chevron, Charles Schwab and McKesson have moved their corporate offices out of California in recent years to places they have called more business friendly.
For Playboy, that meant a move to Miami Beach, Florida.
The city “is among the most dynamic and culturally influential in the country, making it the ideal home for Playboy’s next chapter,” CEO Ben Kohn said in a statement.
Playboy’s move, while similar to other California exits made in recent years, is primarily aimed at resetting the company’s public image as it has struggled to keep up with a rapidly evolving media landscape.
“Our vision is to create world-class content and experiences that resonate globally, and Miami Beach provides the perfect environment for that ambition [and] its vibrancy, pro-business approach and quality of life make it an extraordinary home for our employees and for our future,” Kohn added.
Flight to quality
The company has been based in Los Angeles since it left Chicago more than a decade ago. Now the company has struck a 10-year deal with landlord Rivani, formerly known as Black Lion Investment Group, to take over the penthouse suite at the mixed-use project the firm has underway at 1691 Michigan Ave. in Miami.
The space will be less than half of its current headquarters at 10960 Wilshire Blvd., where it signed a sublease deal for more than 40,200 square feet in 2018. The new deal with Playboy will kick off Rivani’s redevelopment plans for the site, which currently houses an early 2000s-era office located off Miami Beach’s iconic Lincoln Road Mall.
Plans include a redesign led by the internationally recognized Rockwell Group that will draw upon the owner’s longtime involvement in some of Miami’s trendiest hospitality and restaurant offerings. Although the office itself will be a fraction of the company’s soon-to-be-former Los Angeles hub, Playboy employees will have access to a roster of amenities including a luxury spa, fitness and wellness center; a speakeasy and other private venues; an upscale restaurant; and a variety of lounge and meeting areas.
For Rivani, Playboy’s tenancy will not only fill a significant slice of the project’s designated office space — the total for which has not yet been finalized — but also “securing a top-tier, globally recognized company like Playboy underscores the level of prestige” the developer is looking to bring to the project, CEO Robert Rivani said in a statement.
Owners of renovated or new office buildings have been having an easier time filling vacancies in recent years, with Class A+ buildings in major markets exceeding 90% of pre-pandemic use on peak days, according to a midyear report from building security firm Kastle Systems.
Hard reset
Playboy’s decision to cut its long-standing ties with California is the latest in a series of blows the state has suffered as it struggles to shed its reputation as a regulation- and tax-heavy environment among businesses. Some, like X, formerly known as Twitter, have left in response to the state’s politics, while others have cited high employment expenses and burdensome policies as reasons behind moves to states such as Texas, Georgia, North Carolina and Florida.
Companies announced more than 200 headquarters relocations out of the state in 2021, according to data from the Public Policy Institute of California, a significant spike compared with the roughly 150 made in 2011. Those moves across those 10 years collectively resulted in the loss of more than 77,600 jobs, and larger companies in particular are more likely to decamp for cheaper pastures than their smaller counterparts are.
Playboy reported a net loss of about $7.7 million for the quarter ended June 30 and, in an effort to regain profitability, is shifting its focus to more lucrative licensing agreements as it looks to “reclaim its position as one of the world’s most enduring and influential lifestyle and media brands,” CEO Kohn said.
The move provides a boost to Miami Beach as the wave of post-pandemic company relocations to South Florida has largely tapered off. Playboy’s future headquarters is expected to bring a “significant number of well-paying jobs” to Miami Beach, city commissioner Joe Magazine said. He added that he had been in talks with Kohn and the company’s board of directors for months, spearheading efforts alongside the city’s economic development department to bring Playboy to Miami Beach.
Local officials offered an incentive package that ultimately became what Magazine said was “a critical component in securing Miami Beach as their destination.”
“They had options to remain in Los Angeles or go to any number of cities or neighborhoods in South Florida,” he said. “I worked extensively with their team showcasing how Miami Beach is pro-business with a renewed focus on economic development and one of the most dynamic and culturally influential cities in the world.”