See who’s shopping for Miami actual property proper now
Everyone loves the new Miami it seems. The Russians are all over the sunny islands. The Brazilians and Argentines are all about Brickell’s new city center (yes, they spell it like the British because its developer Swire Properties is British). Even the Chinese are moving in; The new Paramount Worldcenter in the city center was advertised almost exclusively for the foreign Chinese market. Wait what happens if there is a direct flight from Miami to Shanghai sometime in the next two years.
Miami: Part rogue town, part Art Nouveau playground, foreign empires, the city popularized by fictional Vice Detective Sonny Crocket and the Cubans is becoming more than a place to launder money in condominiums. Developers in Miami are building new inner cities to turn them into a place to live. Think northeastern cities with new trains and small subway moves, shopping malls, art galleries and entertainment, and the ubiquitous cool restaurants of the month. The “lifestyle” is what the big luxury developers call it. You are no longer in the real estate business, but in the lifestyle building business.
Who’s moving here now? The Turks. You discovered South Florida. The lifestyle pitch pays off.
“The Miami lifestyle makes me love Miami,” said Neslihan Havutcu, wife of Tayfur Havutcu, a well-known coach at Besiktas football club in Istanbul. She bought one of the units in the Armani Residences in the Design District. Starting price: $ 2.2 million. London is closer. Paris is closer. Miami is cooler. And warmer.
“It was my first choice for a vacation home,” she says. She has two children aged 17 and 8.
Like most foreigners in Miami, wealthy Turks buy vacation homes and don’t want to move here. Others only buy it as an investment. In Miami, a buyer can rent a property valued at $ 350,000 for around $ 2,500 per month. In Turkey, the same property costs $ 700, says Turkish realtor Nasra Bozkır of Viens Consulting in Istanbul. Most of those buyers are in for cash flow and buying Miami Sight unseen, Bozkir says.
“When we started promoting front building projects in Miami, Turkey in 2015, there weren’t any Turkish companies selling them. So we came in and were able to sell Miami to famous people who brought us even more buyers.” Says Bozkir. Other Turkish brokers followed suit.
“The Turkish economy is currently unstable and people are looking for alternatives to make money. You haven’t had a return on investment here for 35 years. In Miami, you will get your money back in 18 to 20 years.” Bozkir adds that direct flights between Istanbul and Miami really opened the door to Turks last year.
Bozkir has sold the 32-story Hyde Midtown Suites & Residences condominium and hotel project near the design district. The related group of FORBES billionaire Jorge Perez is the main developer. One bedroom apartments start at $ 490,000. The Hyde, which went on sale in December 2015, has been almost completely sold and – in typical Miami fashion – 70% has been sold to foreigners.
See: Miami Owes Its Life to Foreigners – Forbes
Ten best cities for global real estate investors – Forbes
The Affiliate Group’s Auberge Miami is held as a market stall – The Real Deal
The shore flow of people to Miami has changed over time. First the Cubans fled from Fidel Castro. Then Argentines became a big part of the new Spanish speakers in the city, followed by Colombians in the 80s, Brazilians in the 90s, Russians in the 00s, and now in the emerging market universe, the Turks are buying.
“For us at Hyde, we’re currently primarily dealing with New Yorkers and Turkish buyers,” says Javier Cuadros, Vice President Development at Related. “This direct flight has opened the locks. We are working with 10 Turkish brokers who have sold there because of the political situation,” he says.
Last year, Turkish President Recep Tayyip Erdogan put down an opposition uprising and asked some whether the country was leaning towards dictatorship. The currency lost 17% of its value against the dollar over the past year. It’s up 2.08% this year and the stock market has rebounded.
This could very well be a slip on the radar that is about to black out. The Turkish stock market has risen over 40% since August 31st, making up for all of the losses of the past year. However, the political crisis continues.
Like any other foreigner, the wealthy buyers have offshore dollar bank accounts that they can use to send money to the United States. Many of them pay for the property in full. Some send it through “unconventional channels,” a broker told me, while others risk the tax and pay fees to introduce it through Western Union.
“I was in Istanbul this summer and sold them W hotel condos,” says Craig Studnicky, Principal at RelatedISG. Studnicky’s International Sales Group (ISG) signed a joint venture agreement with Related in 2010 and founded RelatedISG. The Residences at W are located in nearby Fort Lauderdale. The beachfront hotel and residence cost around $ 850 per square foot: a steal compared to any other world-class American city. Buyers are mostly New Yorkers and Brazilians who can rent their hotel furnished rooms to the W Hotel when they are out of town.
When will Miami’s bubble burst again when all these foreigners are shopping and all these properties are going up? And ultimately wash the Turks, Russians and Brazilians off the market?
Nobody knows. The market has certainly softened with Related pausing the Auberge Miami project, the company said.
Miami developers have learned from the housing bubble. Back then, they were heavily in debt, as were their buyers. Many of the mortgages sold to the domestic market were unfounded and fell sharply in 2008, affecting other projects that were more focused on foreign investors.
Today, overseas buyers are considered the safest of the market due to the high down payments, if not direct cash purchases. According to the affiliated group, 70% of their projects are bought by foreigners in cash. You are not alone. Other developers like Swire Properties are seeing the same thing, and that makes them less dependent on credit to build.
Nobody wants their million dollar investment to become $ 700,000. For the Turks looking for a financially secure home, such a crash would take them off the market. There are beautiful climates nearby in Cyprus and Greece that are also sold at Miami prices.
“I’m really curious why the Turks loved Miami so much,” says Studnicky. “Your favorite cities are London and Miami. Why not New York? Too expensive and the weather is bad. Our weather is better,” he says. “Plus, it has Latin sex appeal that makes us alluring.”
Courtesy Smith Aerial Photos
Kenan Ercetingoz, 55, a well-known media personality in Turkey, says even his dog Bidik prefers Miami.
“Miami will be an amazing city in five to ten years,” he predicts. He bought a condo in Hyde Midtown in November 2015. He says he paid a 50% deposit on the apartment. “There is almost nowhere in the world that I have not yet seen. Miami has always been one of my three best decisions,” he says, including Hawaii and Cape Town, South Africa. His son is studying in Miami and will be moving to Hyde next year. After all, Ercetingoz wants to spend half of his time in Turkey and half of his time in Miami.
“I’ve been in the media business here for 40 years,” says Ercetingoz. “I want to settle down from now on and have a quieter, different lifestyle. My son can take over and build his career in the Turkish television news business. I will enjoy Miami.”
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