Live in a Porsche? Designer la­bels draw Miami home buy­ers


The wow fac­tor for Miami’s sky­scraper con­dos no longer comes from a daz­zling At­lantic Ocean view.

It takes some­thing more au­da­cious to sell beach­front prop­erty th­ese days to the global ul­tra­wealthy who ar­rive in Miami with mil­lions to spend on sec­ond or third homes. It takes words in­vested with mean­ing in the lan­guage of the in­ter­na­tional jet set: Porsche. Gior­gio Armani. Fendi. With a slew of res­i­den­tial and ho­tel de­vel­op­ments, Miami is em­brac­ing the no­tion that homes, like cars, hand­bags and jew­elry, should carry luxe designer la­bels. The trend has spread from Europe, Asia and the Mid­dle East, where de­vel­op­ers dis­cov­ered a few years ago that luxury-branded ho­tels and homes could com­mand huge pre­mi­ums that the mon­eyed set would hap­pily pay.

Hav­ing trans­formed New York and Lon­don, the wealthy are in­creas­ingly pur­su­ing new havens. Miami is lur­ing Ar­gen­tini­ans, Brazil­ians, Chi­nese, Rus­sians and French, some of whom seek refuge from po­lit­i­cal in­sta­bil­ity and higher taxes at home. The pur­chases go be­yond the ap­peal of haute lo­gos: Own­ing an as­set priced in dol­lars can pro­tect for­tunes from the shrunken val­ues of eu­ros, pe­sos and rubles.

The pull is so pow­er­ful that de­vel­oper Gil Dezer’s Porsche De­sign Tower is mostly sold-out, even though con­struc­tion won’t wrap un­til early 2016, mean­ing that most buy­ers com­mit­ted mil­lions based on blue­prints.

Shaped like a pis­ton driven into sand, the con­crete-and-glass Porsche De­sign Tower will con­tain three car el­e­va­tors. Each can whisk a con­vert­ible up 60 sto­ries and then slide it into the owner’s per­sonal steel-re­in­forced garage. (The owner can stay in the driver’s seat.) In­side the apart­ments, curved win­dows cap­ture a vista of waves bil­low­ing from a mid­night blue into a pale green along the shore.

For the de­sign­ers and builders, the part­ner­ship of­fers dual re­wards: The brands gain a rev­enue stream and en­hance their ca­chet? The de­vel­op­ers and own­ers ben­e­fit from the al­lure of a trea­sured name and logo.

“What we’re sell­ing is luxury,” Dezer said. “The buy­ers al­ready know the brand. They like the style, they like the look and that’s why they feel more com­fort­able buy­ing it.”

Dezer is also tak­ing reser­va­tions for con­dos at the Armani Casa. The Chateau Group is build­ing the Fendi Chateau (named for the Ital­ian fash­ion house) steps from the Chanel, Gucci and Tif­fany bou­tiques. Nearby is the Faena Dis­trict, a condo, ho­tel and cul­tural cen­ter backed by Ar­gen­tinian hote­lier and fash­ion designer Alan Faena.

Their emer­gence has spawned thou­sands of skilled con­struc­tion jobs. Yet it’s also pro­duced an epic surge in home prices. And it’s walled off Miami’s coast­line be­hind a pha­lanx of sky­scrapers that has iso­lated low- and mid­dle-in­come res­i­dents. Many have had to buy far­ther and far­ther in­land, said Aaron Drucker, a man­ag­ing agent for Redfin, the real es­tate bro­ker­age.

“Lo­cals are not re­ally part of the party,” Drucker said. “It’s a lit­tle bit­ter­sweet for folks who aren’t go­ing to be able to en­joy the beauty of Miami.”

De­mand from Euro­pean and South Amer­i­can buy­ers caused prices for the top 5 per­cent of homes around Miami Beach to surge 66 per­cent in the past year to US$6.3 mil­lion, ac­cord­ing to Redfin. That com­pares with a 5 per­cent in­crease in luxury prices na­tion­wide. Miami Beach’s gains dwarfed the price in­creases of top-tier homes in San Fran­cisco, Los An­ge­les and Wash­ing­ton, D.C.

Global buy­ers are largely pay­ing with cash. Some may be shift­ing their hold­ings from U.S. bank ac­counts af­ter the IRS sought to re­duce tax avoid­ance in 2012 by re­quir­ing banks to re­port in­ter­est earned on ac­counts held by for­eign­ers. Those ac­counts are es­ti­mated to hold up to US$400 bil­lion, ac­cord­ing to court fil­ings.

Far Out­pac­ing Econ­omy


Two-thirds of sales in the Miami area were all-cash, com­pared with 48 per­cent in other U.S. mar­kets with high pro­por­tions of in­ter­na­tional buy­ers, Redfin found. Na­tion­wide, by con­trast, all-cash sales ac­counted for only about a quar­ter of pur­chases in Fe­bru­ary, ac­cord­ing to the Na­tional As­so­ci­a­tion of Re­al­tors.

A re­sult is that the de­mand for branded con­dos is far out­pac­ing the fun­da­men­tals of a Miami-area econ­omy that’s still re­cov­er­ing from the hous­ing bust. Over the past year, av­er­age hourly wages in metro Miami have risen just 1.3 per­cent to US$22.74 an hour, ac­cord­ing to the La­bor Depart­ment, be­low na­tional av­er­ages.

“The typ­i­cal met­rics used to mea­sure real es­tate mar­kets — such as lo­cal job growth — don’t ap­ply here,” said Neisen Kas­din, a for­mer Miami Beach mayor and lawyer who rep­re­sents de­vel­op­ers of the Faena Dis­trict. “I’ve never seen this con­gre­ga­tion of wealth be­fore.”

Branded homes are help­ing at­tract some buy­ers who weren’t familiar with Miami’s luxury hous­ing, said Liam Bai­ley, global head of re­search at the Lon­don-based real es­tate con­sul­tancy Knight Frank.

“There is a mar­ket­ing ben­e­fit of hav­ing a brand that is rec­og­nized out­side the mar­ket,” Bai­ley said. “There is an el­e­ment of trust.”

The de­vel­op­ers en­joy a grow­ing pool of wealth to tar­get. Roughly 173,000 in­di­vid­u­als world­wide are worth more than US$30 mil­lion, a pop­u­la­tion that rose 3 per­cent last year, ac­cord­ing to a re­port by Knight-Frank. Their num­bers are fore­cast to swell an ad­di­tional 34 per­cent over the next decade, mean­ing that more for­eign buy­ers will be look­ing for homes in New York, Los An­ge­les, Miami and else­where.

In set­ting up the Porsche De­sign Tower, Dezer iden­ti­fied and sent packages to 1,500 in­di­vid­u­als with an affin­ity for the Ger­man au­tomaker. The out­reach pro­duced 62 sales.

More than 90 per­cent of the 132 condo units have been sold. Prices started at US$4 mil­lion, with pent­houses listed for above US$30 mil­lion. The buy­ers are com­mit­ting mil­lions to a designer condo based on blue­prints, mod­els and an­i­mated videos. They agree to pay 50 per­cent of the pur­chase price in in­stall­ments dur­ing con­struc­tion — es­sen­tially fi­nanc­ing the devel­op­ment on more gen­er­ous terms than some banks would.

Just the idea of the car el­e­va­tor was enough to per­suade Juan Pablo Verdiquio to buy at the Porsche De­sign Tower.

“I took a leap of faith,” said Verdiquio, who had moved to Miami from Ar­gentina a few years ear­lier and launched a con­struc­tion busi­ness.

In the end, he de­cided the condo he had bought for va­ca­tions was lack­ing as a year-round fam­ily home. For Verdiquio, who drives a Porsche 911 4S, the tower seemed a per­fect fit. So he bought an apart­ment.

But then Dezer also showed him the blue­prints for the Armani build­ing, whose ar­chi­tect, Ar­gen­tine Ce­sar Pelli, known for designing the Petronas Tow­ers in Malaysia, Verdiquio ad­mired. The prices, start­ing at US$1.5 mil­lion, were less ex­trav­a­gant. So Verdiquio bought a unit there, too.

He ex­pects the designer la­bels to carry weight from Shang­hai to Sao Paulo, giv­ing his apart­ments more value than one with an or­di­nary name cho­sen by a de­vel­oper.

“I think it’s go­ing to be a huge land­mark for Miami and, I think, world­wide,” Verdiquio said.

Yet Dezer also pitches Miami as a bar­gain com­pared with other global cities. The av­er­age Miami Beach condo sells for roughly US$760 a square foot (0.09 square me­ters), ac­cord­ing to the bro­ker­age Christie’s In­ter­na­tional. That makes it cheaper than a com­pa­ra­ble pad in Monaco, New York City, Lon­don, Moscow, Paris and Bei­jing.

With only so much ocean­front, the con­dos should be­come a scarce re­source that ap­pre­ci­ates over time, Dezer said. This makes th­ese build­ings a store of value, though as­so­ci­a­tion fees and taxes can cost US$300,000 a year, ac­cord­ing to es­ti­mates by the real es­tate lawyer Kas­din.

In some cases, the condo has even in­su­lated buy­ers from the de­val­u­a­tion of for­eign cur­ren­cies against the dollar.

A Rus­sian who bought a US$1 mil­lion home in Miami last year would have spent the equiv­a­lent of 34 mil­lion rubles. Be­cause the ru­ble has plunged since then, that home is worth roughly 60 mil­lion rubles. A sim­i­lar trend has played out for the euro, the Brazil­ian real and the Colom­bian peso.

“Peo­ple look at th­ese apart­ments as bank ac­counts,” Dezer said.


This March 2, 2015 photo shows an ex­te­rior view of the un­der con­struc­tion Faena House Condo in Miami Beach, Florida.

Newspapers in English

Newspapers from Taiwan

© PressReader. All rights reserved.