On the shores of Miami Beach, on the ultra-exclusive Fisher Island, there is a crane on a construction site. It’s the last plot of land available for development and a likely bet on luxury real estate at a time when the housing market is in free fall.
Known as the “King of Miami condos,” Jorge Perez and his Associated Group are behind the 10-story, 50-unit project that boasts a $1.2 billion asking price. They paid $122.6 million for the land, which was at the top of the market.
Units start at $15 million. The project includes a $90 million, 15,000-square-foot penthouse and a $55 million ground-floor villa with a half-acre backyard. The building will also have its own slip for mega yachts. Sales started last month.
“Almost 30% of the unions are spoken,” Perez said. “Over $300 million in deals and we haven’t really done any marketing. Even so, if the market slows down a little bit, we’re in a lucky position.”
Buyers are required to pay a 50% non-refundable deposit for the sale prior to construction.
Early buyers are from Brazil, New York, Canada, Mexico and Israel, Perez said. He said Miami is seeing more domestic interest than in the past because it has traditionally been a haven for foreign investors. It seems to reverberate throughout the city.
View from South Florida
“Miami is an internationally oriented market — 80 to 90% international — but that changed during the pandemic,” said Danny Hertzberg, a luxury real estate agent at Coldwell Banker and Jills Zeder Group. “We will continue to have this domestic demand because of the tax, but at some point political instability or a weaker dollar will drag it down. [international] the people in it.”
Miami is the top performer in the recent decline in both home sales and prices, with prices still quite strong in the city. But the high level has not been so strong. Expected sales of homes priced above $5 million fell 89% year over year in December, according to real estate appraisal firm Miller Samuel.
“But one thing to keep in mind from a Miami perspective is that pre-pandemic inventory was down 60%, so what’s different is that inventory is extremely limited,” said Jonathan Miller, the firm’s CEO. “It reveals a lot of conventional wisdom about pricing.”
Miller added that the Fisher Island project “might not sell in five minutes, but it’s not beyond the realm of possibility in this market.”
Both the property and its location are unique. Fisher Island is a 216-acre, ultra-exclusive community, accessible only by ferry or yacht, and open only to residents, their guests, and guests of the small luxury hotel located there. According to the representative of Related Group, the last apartment sold on the island last year cost 40 million dollars.
Hertzberg said Perez’s new building “checks a lot of boxes” for wealthier buyers who have had a new mindset 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. Their own restaurants, their own grocery store. A private beach,” Herzberg said.
He also noted that immediate admission to the golf club for residents is a big draw. Greater Miami has a five- to seven-year waiting list to join a golf club, he said.
“I’m sure they will sell. It’s just a question of when the economy plays out and how aggressive they are on pricing,” Hertzberg said. “If I were to bet, they’d be at the top of the list. It just has the right elements for the economy and the world we’re in.”
What the future may bring
Perez, who developed hundreds of properties in South Florida and weathered a massive condo crash during the Great Recession, didn’t seem at all worried about the future of his new project.
“Yes, the market across the country has gone down, particularly in luxury properties, but we’re finding that in the enclaves we have like Fisher Island, we’re still seeing a lot of interest from people who can afford the best. “said Peres.
However, he is concerned about the broader economy and the broader real estate market.
“Of course it worries me. It worries me every day. I wake up every day knowing what’s going to happen in the economy.” “We think interest rates and inflation have almost peaked. I think we’re going to have a tough time for a year to a year and a half to two years. And we’re ready to weather that storm. It’s going to happen.”
If Perez gets $90 million for the penthouse, it will be the most expensive condo for sale in all of South Florida.