Just off the coast of Miami Beach, on ultra-exclusive Fisher Island, there’s one crane on one building web site. It is the final plot of land accessible for growth and an unlikely guess on luxurious actual property at a time when the housing market seems to be in freefall.
Jorge Perez, also referred to as “the condo king of Miami,” and his Related Group are behind the 10-story, 50-unit undertaking that boasts a sell-out value of $1.2 billion. They paid $122.6 million for the land, on the prime of the market.
associated investing news
Units begin at $15 million. The undertaking features a $90 million, 15,000 sq. foot penthouse and a $55 million ground-floor villa with a half-acre yard. The constructing may even have its personal slip for mega yachts. Sales simply began final month.
“Almost 30% of the units are spoken for,” mentioned Perez. “Contracts have gone out for over $300 million, and we haven’t really done any marketing. Nevertheless, should the market slow down a little bit, we’re in a fortunate position.”
Buyers must put down a 50% non-refundable deposit for pre-construction gross sales.
Perez mentioned preliminary patrons hail from Brazil, New York, Canada, Mexico and Israel. He mentioned he’s seeing much more home curiosity than previously, as Miami had historically been a haven for international buyers. That seems to be echoing everywhere in the metropolis.
The view from South Florida
“Miami is an international-focused market – 80-90% international – but it flipped during pandemic,” mentioned Danny Hertzberg, a luxurious actual property agent with Coldwell Banker and the Jills Zeder Group. “We’ll continue to have this domestic demand for tax reasons, but at some point political instability or a weaker dollar will pull [international] people in.”
Miami has been an outlier within the current decline in each house gross sales and costs, with costs nonetheless fairly robust within the metropolis. The excessive finish, nonetheless, has not been as resilient. Pending gross sales of houses priced above $5 million had been down 89% in December yr over yr, based on Miller Samuel, an actual property appraisal agency.
“But the one thing to keep in mind in terms of Miami is that inventory is down 60% since pre-pandemic, so what’s different is inventory is extremely limited,” famous Jonathan Miller, CEO of the agency. “That throws out a lot of conventional wisdom on pricing.”
Miller added that the Fisher Island undertaking, “may not sell in five minutes but it’s not out of the realm of possibility even in this market.”
The property and its location are each distinctive. Fisher Island is a 216- acre, ultra-exclusive neighborhood, solely accessible by ferry or yacht and solely open to residents, their friends and friends of the small luxurious resort there. The final condominium that bought on the island final yr went for $40 million, based on a consultant of Related Group.
Hertzberg mentioned Perez’s new constructing “checks a lot of boxes” for wealthier patrons who’ve a brand new mentality because the begin of the pandemic.
“They want amenities, privacy and security. That’s a major factor there. They want convenience. There is a private school there. Their own restaurants, their own grocery stores. A private beach,” mentioned Herzberg.
He additionally famous that on the spot admission to the golf membership for residents is a big draw. He mentioned there’s a five- to seven-year waitlist in better Miami to affix a golf membership.
“I am sure they will sell out. The question of when is what happens in the economy and how aggressive they are on pricing,” mentioned Hertzberg. “If I was betting, they would be top of the list. It just has the right elements for the economy and the world we’re in.”
What the long run might carry
Perez, who has developed a whole lot of properties in South Florida and weathered the large condominium crash throughout the Great Recession, didn’t appear in any respect involved about the way forward for his new undertaking.
“Yes, the market across the country has gone down, particularly in luxury units, but we’re finding that in enclaves that we have, like Fisher Island, we still see a great level of interest from those people that can afford the best,” mentioned Perez.
He does, nonetheless, fear concerning the broader financial system and the broader actual property market.
“Of course, it bothers me. It bothers me every day. I wake up every day thinking about you know what is going to happen in the economy,” mentioned Perez. “We’re thinking that interest rates and inflation has pretty much peaked. We’re going to have a rough, in my opinion, one year to a year and a half, two years. And we are ready to weather that storm should it happen.”
If Perez does get $90 million for the penthouse, it is going to be the priciest condominium to promote in all of South Florida.