Off the coast of Miami Beach, on exclusive Fisher Island, there is one crane on one construction site. It’s the last piece of land available for development and an unlikely bet on high-end real estate at a time when the housing market appears to be in freefall.
Jorge Perez, also known as the “King of Miami Apartments,” and his communications team are behind the 10-story, 50-unit project that boasts a sold-out price of $1.2 billion. They paid $122.6 million for the land, which is 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 just started last month.
“Almost 30% of the units are claimed,” Perez said. “There’s been over $300 million in contracts, and we haven’t really done any marketing. Still, if the market slows down a little bit, we’ll be in a lucky position.”
Buyers must pay a 50% non-refundable sale deposit prior to construction.
Perez said early buyers hail from Brazil, New York, Canada, Mexico and Israel. He said he’s seeing a lot more domestic interest than in the past because Miami has traditionally been a haven for foreign investors. It seems to resonate throughout the city.
“Miami is an international market — 80 to 90 percent international — but it’s turned upside down during the pandemic,” said Danny Herzberg, a luxury real estate agent with Coldwell Banker and Jills Zeder Group. “We will continue to have that domestic demand for tax reasons, but at some point political instability or a weaker dollar will [international] people”.
Miami has been the exception to the recent decline in home sales and prices, with prices in the city still quite high. However, the high class was not so stable. According to Miller Samuel, a real estate appraisal company, pending sales of homes over $5 million fell 89% in December compared to the same period last year.
“But one thing to keep in mind from Miami’s perspective is that inventory is down 60% from pre-pandemic because that’s different than inventory being very tight,” noted Jonathan Miller, the firm’s CEO. . “It throws out a lot of traditional assumptions about pricing.”
Miller added that the Fisher Island project “might not sell in five minutes, but it’s not out of the question even in this market.”
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 small luxury hotel guests. According to a representative of the Related Group, the last condo sold on the island last year was for $40 million.
Hertzberg said Perez’s new building “checks a lot of boxes” for wealthier buyers who have a new mindset since the pandemic began.
“They want convenience, privacy and security. This is an important factor. They want convenience. There is a private school there. They have their own restaurants, their own grocery stores. A private beach,” said Hertzberg.
He also noted that instant access to the golf club for residents is a huge draw. Greater Miami has a waiting list of five to seven years to join a golf club, he said.
“I’m sure they will sell out. The question is what will happen in the economy and how aggressive they are in pricing,” said Hertzberg. “If I were to make a bet, they’d be top of the list. It just has the right elements for the economy and the world we’re in.”
Perez, who built hundreds of properties in South Florida and lived through the Great Recession’s massive apartment bust, didn’t seem at all concerned about the future of his new project.
“Yes, the market across the country has fallen, especially in luxury, but we’re finding that in the enclaves that we have, like Fisher Island, we’re still seeing a lot of interest from people who can afford the best, “, Perez said.
However, he is concerned about the economy as a whole and the real estate market as a whole.
“Of course, it worries 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 peaked. In my opinion, we are facing a difficult period from a year to one and a half, two years. And we’re ready to weather that storm when it happens.”
If Perez does get $90 million for the penthouse, it will be the most expensive condo for sale in all of South Florida.