Just off Miami Beach, on the very exclusive Fisher Island, there is a crane at a construction site. It’s the last plot of land available for development and an unlikely gamble on luxury real estate at a time when the housing market appears to be in free fall.
Jorge Perez, also known as “the king of Miami condos,” and his related group are behind the 10-story, 50-unit project that has a 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 15,000 square foot penthouse and a $55 million ground floor villa with a half-acre backyard. The building will also have its own slipway for mega yachts. Sales started last month.
“Almost 30% of units are booked,” Perez said. “The contracts have exceeded $300 million and we haven’t really done any marketing. However, if the market were to slow down a bit, we would be in a privileged position.”
Buyers must deposit a 50% non-refundable deposit for pre-construction sales.
Perez said the first buyers came from Brazil, New York, Canada, Mexico and Israel. He said he saw far more national interests than in the past, as Miami has traditionally been a haven for foreign investors. It seems to resonate throughout the city.
The view from South Florida
“Miami is an international-oriented market — 80 to 90 percent international — but it’s turned around during the pandemic,” said Danny Hertzberg, a luxury real estate agent at Coldwell Banker and the Jills Zeder Group. “We will continue to have this domestic demand for fiscal reasons, but at some point political instability or a weaker dollar will pull [international] the people in it.”
Miami has been an outlier in the recent drop in home sales and prices, with prices still quite high in the city. The top end, however, wasn’t as resilient. Pending sales of homes priced over $5 million were down 89% in December year-over-year, according to Miller Samuel, a real estate appraisal firm.
“But the one thing to keep in mind when it comes to Miami is that inventory is down 60% since pre-pandemic, so what’s different is inventory is extremely limited,” noted Jonathan Miller, CEO of the company. “That throws a lot of conventional wisdom into pricing.”
Miller added that the Fisher Island project “may not sell out in five minutes, but it’s not out of reach, even in this market.”
Both the property and its location are unique. Fisher Island is an ultra-exclusive 216-acre community, accessible only by ferry or yacht and open only to residents, their guests, and guests of the small luxury hotel therein. The last condo sold on the island last year cost $40 million, according to a representative from Related Group.
Hertzberg said Perez’s new building “ticks a lot of boxes” for wealthier buyers who have had a new mindset since the pandemic began.
“They want convenience and privacy and security. That’s a major factor there. They want convenience. There’s a private school there. Their own restaurants, their own grocery stores. A private beach,” Herzberg said.
He also noted that immediate admission to the golf club for residents is a huge draw. He said there was a waiting list of five to seven years in greater Miami to join a golf club.
“I’m sure they’ll sell. The question of when is what’s happening in the economy and how aggressive they are on pricing,” Hertzberg said. “If I bet they would be top of the list. He has just the right elements for the economy and the world we find ourselves in.”
What the future may bring
Perez, who developed hundreds of properties in South Florida and weathered the massive condominium meltdown during the Great Recession, didn’t seem at all concerned about the future of his new venture.
“Yes, the market across the country has gone down, especially in luxury units, but we’re seeing that in the enclaves that we have, like Fisher Island, we’re still seeing great interest from those who can afford the best,” Perez said.
However, he is worried about the economy in general and the real estate market in general.
“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,” Perez said. “We think interest rates and inflation have pretty much peaked. We’re going to have a tough time, in my view, a year to a year and a half, two years. And we’re ready to weather this storm if it comes.”
If Perez gets $90 million for the penthouse, it will be the most expensive condo for sale in all of South Florida.