My morning ritual has remained the same for a very long time. I start my day with some affirmations, a great cup of tea or coffee, and then to 2 or 3 newspapers, major network TV news, and real estate related news and blogs on my phone. I read an article this morning on Bisnow’s South Florida 2016 Forecast’s recent panel, in particular quoting Jorge Perez, and thought about how many times I am asked about what I think about the market. This really resonated with me and I want to share it. There are many takes on the market, and in my opinion, this is one that I will refer back to. I will balance it with Miami being a Top Ten international destination, our incredible lifestyle and business opportunities, and how wonderfully busy I am with local, national, and international buyers, and well informed sellers. Hope you enjoy it!
Related Chairman Jorge Perez: Foreign Investment In Miami A Double-Edged Sword
Investment in Miami's real estate market could be chilled by the economic shock waves affecting foreign countries. That's what Related Group chairman Jorge Perez told attendees at Bisnow's South Florida 2016 Forecast event at the Four Seasons Hotel Miami.
Jorge told the more than 350 attendees the rising dollar, coupled with the decline in many other currencies, could have a real impact on real estate investments here. That's because in Miami, 80% of all real estate buys are fueled by foreign money. As the dollar has strengthened, Miami real estate has become all the more expensive for buyers in other countries. For instance, Jorge said a Brazilian investor has seen the price of condos jump two times over three years ago, without the real prices moving anywhere.
Yet, Jorge—snapped being interviewed by CBS4 News' Gaby Fleischman—said it's economic turmoil in those countries and the relative safety of the US market that's prompting them to continue to invest here. Even with a much stronger dollar, people thinking of investing in the United States is good news for Miami real estate, he said. “And since Latin Americans in particular are very dubious about banks...they tend to look at real estate as an investment vehicle.” And even as Miami real estate gets more expensive, it's still a bargain when compared to places like New York or LA, he adds.
Jorge's comments come as Related continues its development advancements locally, including with Icon Las Olas, One Park Grove and most recently Paraiso Bay (here), it's ultra-luxurious 388-unit condo project in Edgewater with unit prices topping $600/SF that will deliver by 2017. Jorge said many of the units already sold at the project were picked up by foreign buyers. That's a trend Jorge says he'd like to see reverse somewhat in Miami and see more local buyers, as you see in cities like Atlanta, NYC and San Francisco. Here's a look at some of the other projects headed for the Miami skyline.
Despite any coming challenges, one thing that bodes well for the Miami market is it's become a stable city for real estate investment. Premier Developers CEO Bradley Deckelbaum thinks Miami has passed a threshold in terms of its place as a global city, and that investors will keep Miami as a priority no matter the economy. “It's not going to be the same boom or bust...because we'll remain an important city for investment,” he said.
Bradley was part of a development panel that included Ready Capital managing director David Cohen, who moderated, Aria Development Group principal David Arditi, Fryd Properties CEO Jonathan Fryd, and Cervera Real Estate managing partner Alicia Cervera Lamadrid.
David said the aggressive pricing in Miami has forced his firm to seek development projects in other cities, such as NYC and DC. He said there are far fewer foreign buyers in DC, and most tenants are local folks with real jobs and healthy salaries.
Source: Bisnow Miami News