Just off the coast of Miami Beach, on the ultra-exclusive Fisher Island, is a single crane on a single construction site. It is the last plot of land available for development and an unexpected bet on luxury real estate at a time when the housing market appears to be in free fall.
Jorge Perez, aka the “Miami condo king,” and his related group, are behind the 10-story, 50-unit project that has a total sale price of $1.2 billion. They paid $122.6 million for the land, at the top of the market.
Units start at $15 million. The project includes a $90 million penthouse, 15,000 square feet, and a $55 million ground floor villa with a half-acre backyard. The terminal will also have a special voucher for mega yachts. Sales just started last month.
“Nearly 30% of the units are spoken,” Perez said. “We’ve done more than $300 million in contracts, and we haven’t really done any marketing. However, if the market slows down a bit, we’re in a lucky position.”
Buyers are required to pay a non-refundable 50% deposit for pre-construction sales.
Perez said the first buyers come from Brazil, New York, Canada, Mexico and Israel. He said he sees much more domestic interest than in the past, as Miami has traditionally been a haven for foreign investors. It seemed to reverberate throughout the city.
“Miami is a market focused on the world — 80-90% international — but it has flipped during the pandemic,” said Danny Hertzberg, luxury real estate agent with Coldwell Banker and Giles Zeder Group. “We will continue to have that domestic demand for tax reasons, but at some point, political instability or a weak dollar will pull back.” [international] people in.”
Miami has been outside of a recent decline in both home sales and prices, as prices are still very strong in the city. However, the high end wasn’t as resilient. Pending sales of homes over $5 million fell 89% in December year over year, according to Miller Samuel, a real estate appraisal firm.
“But the one thing to keep in mind with regards to Miami is that inventory is down 60% since before the pandemic, so the difference is that inventory is very limited,” noted Jonathan Miller, CEO of the company. “This throws away a lot of the conventional wisdom about pricing.”
Miller added that the Fisher Island project “may not sell in five minutes but it’s not out of the realm of possibility even in this market.”
The property and its location are both unique. Fisher Island is a highly exclusive 216-acre community, accessible only by ferry or yacht, and open only to residents, their guests, and guests of the small luxury hotel there. The last apartment on the island sold last year for $40 million, according to a representative linked to the group.
Perez’s new building, Hertzberg said, “checks a lot of boxes” for wealthier buyers who have had a new mindset since the start of the pandemic.
“They want amenities and privacy and security. That’s a major factor there. They want comfort. There’s a private school there. Their own restaurants, their own grocery stores. And a private beach,” Herzberg said.
He also noted that immediate access to the golf club for residents was a big draw. He said there is a five- to seven-year waiting list in Greater Miami to join the golf club.
“I’m sure they’ll sell everything,” Hertzberg said. “The question is when is what happens in the economy and how seriously should they be pricing.” “If I bet they would be at the top of the list. It just has the right stuff for the economy and the world we’re in.”
Perez, who developed hundreds of properties in South Florida and tackled a massive condo meltdown during the Great Recession, didn’t seem at all concerned about the future of his new venture.
“Yes, the market has been down across the country, particularly in luxury units, but we’ve found that in the pockets we have, like Fisher Island, we’re still seeing a great level of interest from those people who can afford better,” Perez said.
However, he is concerned about the broader economy and the broader real estate market.
Perez said, “Of course, it bothers me. It bothers me every day. I wake up every day thinking you know what’s going to happen in the economy.” “We think interest rates and inflation have pretty much peaked. We’ll have a rough year, in my opinion, a year to a year and a half, two years. And we’re ready to weather that storm if that happens.”
If Perez gets $90 million for the penthouse, it will be the most expensive apartment for sale in South Florida.