Just off Miami Beach, on the ultra-exclusive Fisher Island, there’s a crane on a construction site. This is the last lot available for development and it is impossible to bet on luxury real estate at a time when the housing market seems to be in free fall.
Jorge Perez, also known as “Miami’s apartment king” and his Related Team are behind the 10-storey, 50-apartment project with a sale price of $1.2 billion. They paid $122.6 million for the land, which is the highest on the market.
Units start at $15 million. The project includes a $90 million, 15,000 square foot penthouse and a $55 million ground-floor mansion with a half-acre backyard. The building will also have its own slide for the giant yachts. Sales just started last month.
“Nearly 30 percent of the apartments are for sale,” said Perez. “Contracts have been signed for over $300 million and we haven’t really done any marketing. However, if the market slows down a bit, we’re in a lucky position. lucky.”
Buyer must deposit 50% non-refundable deposit for pre-construction sale.
Perez said the initial buyers came from Brazil, New York, Canada, Mexico and Israel. He said he is seeing more domestic interest than in the past, as Miami has traditionally been a haven for foreign investors. That seems to be echoing throughout the city.
View from South Florida
“Miami is an internationally focused market – 80-90% is international – but it has been turned upside down in the past,” said Danny Hertzberg, a senior real estate agent with Coldwell Banker and Jills Zeder Group. pandemic period. “We will continue to have domestic demand for tax reasons, but at some point political uncertainty or a weaker dollar will drag [international] residents.”
Miami is an outlier in the recent decline in both home prices and sales, with prices still fairly high in the city. However, the high-end segment is not so durable. According to Miller Samuel, a real estate appraisal firm, sales of pending homes priced above $5 million fell 89 percent in December compared with the same period last year.
“But one thing to note about Miami is that inventory is down 60% since pre-pandemic, so what’s different is that inventory is extremely limited,” noted Jonathan Miller, the company’s CEO. . “That gives a lot of the conventional wisdom on pricing.”
Miller added that Fisher’s Island project “may not sell for another five minutes but it’s not out of the question even in this market.”
The property and its location are both unique. Fisher Island is an ultra-exclusive, 216-acre community that can only be reached by ferry or yacht and is open only to residents, their guests, and guests of the small luxury hotel there. According to a representative of Related Group, the last apartment sold on the island last year cost $40 million.
Hertzberg said Perez’s new building “checks a lot of boxes” for more affluent buyers who have had a new mentality since the start of the pandemic.
“They want convenience, privacy and security. That’s the main factor there. They want convenience. There’s a private school there. Its own restaurant, its own grocery store. Private beach,” Herzberg said. speak.
He also notes that instant golf club access for residents is a huge draw. He says there is a five to seven year waiting list in greater Miami to join a golf club.
“I’m sure they’ll sell out,” Hertzberg said. “The question is when will happen in the economy and how aggressive they are in pricing.” “If I were to bet, they’d be at the top of the list. It just has to do with the economy and the world we live in.”
What the future can bring
Perez, who has developed hundreds of properties in South Florida and weathered a massive condo collapse during the Great Recession, doesn’t seem worried about the future of his new project.
“Yes, the market across the country has gone down, especially in luxury apartments, but we’ve found that in the lands we have, like Fisher Island, we’re still seeing a level of interest. large from those who can afford it best,” said Pezérez.
However, he is worried about the broader economy and broader real estate market.
“Of course, it bothers me. It bothers me every day. I wake up every day and think about what’s going to happen in the economy,” Perez said. “We’re thinking that interest rates and inflation have peaked. In my opinion, we’re going to have a tough time of a year to a year and a half, two years. And we’re ready to get through it. that storm if that happens.” happen.”
If Perez made $90 million for the penthouse, it would be the most expensive condo sold in all of South Florida.
