Miami Market Buoyed by Foreign Money

An article by Roben Farzad in this weeks Bloomberg Businessweek illustrates a very different Miami and general South Florida real estate market than what we are used to reading about. We hear the good news of decreasing inventory as investors buy up swaths of distressed real estate to turn into rentals, but not a healthy building boom, with full occupancy predicted in a years time.

Roben writes that at least two dozen condo projects have been announced in the past 10 months. The 27-floor Bellini on Williams Island is taking orders for its 70 condos, each with elevators that open directly into the unit. The 65-floor, 1,000-unit Resorts World Miami, featuring a lagoon, casino, shopping mall, and six towers, is expected to be ready for occupancy in 2014. The Mansions at Acqualina, by local developer Jules Trump, will have 79 villas with ocean views and a 16,000-square-foot, $50 million Palazzo di Oro penthouse. Trump says the project registered $200 million in sales in its first month.

Latin Americans, Europeans, and Asians, are said to represent as much as 80 percent of new buyers in the area.  At Trump Hollywood, another superluxury complex (by the Donald, and the Related Group), buyers are South Americans, Canadians, and Russians. Apogee Beach, a new Related Group condo 20 miles north of the city, presold 87 percent of its units to Argentines, Venezuelans, and Mexicans—and only 5 percent to Americans, the developer says. “When we saw that foreigners were again buying condos here, we rapidly adapted,” says Jorge Pérez, Related’s chief executive officer.

Developers predict that Miami’s downtown condo market will reach full occupancy early next year, compared with 8 percent vacancy now—even as 4,500 new condos become available across South Florida. Peter Zalewski, a principal at Condo Vultures, says, “The speculator seeking riches has always been the common thread in South Florida’s boom-bust cycles,”  “The only change today is the extent of foreign investors with strong currencies flooding in.”

 

It certainly seems like the downtown Miami and South Beach are hot again as international buyers rush to acquire pied-a-terres in what has long been considered the gateway to Latin America. Home sales jumped 46% last year, the Miami Association of Realtors reports. Median monthly rents are up 30%from 2009, according to Condo Vultures, a Miami real state consulting firm.