Just off the coast of Miami Beach, on ultra-exclusive Fisher Island, there may be one crane on one construction site. It’s the last plot of land available for development and an unlikely bet on luxury real estate at a time when the housing market appears to be in freefall.
Jorge Perez, also often called “the condo king of Miami,” and his Related Group are behind the 10-story, 50-unit project that boasts a sell-out price of $1.2 billion. They paid $122.6 million for the land, at the highest of the market.
Units start at $15 million. The project features a $90 million, 15,000 square foot penthouse and a $55 million ground-floor villa with a half-acre backyard. The constructing will even have its own slip for mega yachts. Sales just began last month.
“Almost 30% of the units are spoken for,” said Perez. “Contracts have gone out for over $300 million, and we have not really done any marketing. Nevertheless, should the market decelerate slightly bit, we’re in a fortunate position.”
Buyers need to put down a 50% non-refundable deposit for pre-construction sales.
Perez said initial buyers hail from Brazil, Recent York, Canada, Mexico and Israel. He said he’s seeing way more domestic interest than up to now, as Miami had traditionally been a haven for foreign investors. That appears to be echoing all around the city.
“Miami is an international-focused market – 80-90% international – nevertheless it flipped during pandemic,” said Danny Hertzberg, a luxury real estate agent with Coldwell Banker and the Jills Zeder Group. “We’ll proceed to have this domestic demand for tax reasons, but sooner or later political instability or a weaker dollar will pull [international] people in.”
Miami has been an outlier within the recent decline in each home sales and costs, with prices still quite strong in town. The high end, nevertheless, has not been as resilient. Pending sales of homes priced above $5 million were down 89% in December yr over yr, in line with Miller Samuel, an actual estate appraisal firm.
“However the one thing to bear in mind when it comes to Miami is that inventory is down 60% since pre-pandemic, so what’s different is inventory is amazingly limited,” noted Jonathan Miller, CEO of the firm. “That throws out loads of conventional wisdom on pricing.”
Miller added that the Fisher Island project, “may not sell in five minutes nevertheless it’s not out of the realm of possibility even on this market.”
The property and its location are each unique. Fisher Island is a 216- acre, ultra-exclusive community, only accessible by ferry or yacht and only open to residents, their guests and guests of the small luxury hotel there. The last condo that sold on the island last yr went for $40 million, in line with a representative of Related Group.
Hertzberg said Perez’s recent constructing “checks loads of boxes” for wealthier buyers who’ve a recent mentality for the reason that start of the pandemic.
“They need amenities, privacy and security. That is a significant component there. They need convenience. There’s a non-public school there. Their very own restaurants, their very own grocery stores. A non-public beach,” said Herzberg.
He also noted that quick admission to the golf club for residents is a large draw. He said there may be a five- to seven-year waitlist in greater Miami to hitch a golf club.
“I’m sure they’ll sell out. The query of when is what happens within the economy and the way aggressive they’re on pricing,” said Hertzberg. “If I used to be betting, they might be top of the list. It just has the suitable elements for the economy and the world we’re in.”
Perez, who has developed a whole bunch of properties in South Florida and weathered the huge condo crash in the course of the Great Recession, didn’t seem in any respect concerned in regards to the way forward for his recent project.
“Yes, the market across the country has gone down, particularly in luxury units, but we’re finding that in enclaves that we now have, like Fisher Island, we still see an important level of interest from those those who can afford the very best,” said Perez.
He does, nevertheless, worry in regards to the broader economy and the broader real estate market.
“After all, it bothers me. It bothers me each day. I get up each day occupied with you already know what will occur within the economy,” said Perez. “We’re pondering that rates of interest and inflation has just about peaked. We’ll have a rough, for my part, one yr to a yr and a half, two years. And we’re able to weather that storm should it occur.”
If Perez does get $90 million for the penthouse, it is going to be the priciest condo to sell in all of South Florida.