More than a decade ago, in 2010, a pre-construction waterfront luxury condo in the Miami market would fetch around $400 a square foot, representing a 50 percent cut from prices buyers were paying two years earlier, recalled Gil Dezer, president of Sunny Isles Beach-based Dezer Development.
“Today, no one is signing for less than $1,000 a square foot,” Dezer said. The dramatic rebound shows Miami has evolved into a global city that is attracting not only ultra-wealthy buyers from all over the U.S. and abroad, but also drawing out-of-state and foreign financial firms to South Florida, Dezer said during a panel discussion at The Real Deal South Florida Showcase and Forum on Thursday.
In addition to Dezer, the panel, “Miami: The world’s next global city,” featured Michael Shvo, who leads his New York-based eponymous firm, and Isaac Toledano, principal of Aventura-based BH Group.
New Yorkers, Californians, Chicagoans and even Kansians with deep pockets are flocking to the Miami market, Dezer said. “Everybody is coming down,” he said. “We are getting that top echelon.”
Dezer is currently developing Bentley Residences, a planned 62-story tower with 216 units in Sunny Isles Beach. He previously built Porsche Design Tower, a 60-story, 132-unit luxury condominium also in Sunny Isles Beach. In August, Dezer Development hired Douglas Elliman to partner with his in-house Dezer Platinum Realty to help sell out Bentley Residences.
“We are 40 percent presold and sales are averaging $2,700 a square foot,” Dezer said. “We are not selling as fast as we would like, but we are getting four to six [signed contracts] per month.”
Shvo, who is redeveloping the Raleigh, South Seas and Richmond hotels, three Art Deco properties in Miami Beach, into a 60-key hotel and a 42-unit condominium, says buyers at his project are paying between $4,000 to $12,000 per square foot.
“We probably have the most expensive product in Miami Beach,” Shvo said. “We are seeing high-profile buyers,” including from Middle East countries like Qatar and Turkey.
In addition to the Raleigh project, Shvo is also developing three office projects in Miami Beach, where he said he saw a need for class A space.
“We are seeing a lot of movement of companies from the East Coast and the West Coast,” Shvo said. “Financial institutions are the highest paying tenants. The problem is that there is no good office space in Miami Beach. It’s all shit. That’s why we said, ‘Let’s invest in Miami Beach.’”
Toledano’s BH Group is currently involved in more than half-a-dozen planned condominium, mixed-use and office projects across South Florida, with partners such as Coconut Grove-based Related Group and Boca Raton-based Pebb Enterprises. Toledano noted the influx of out-of-state firms to South Florida is driving up office demand and asking rents.
In April, BH and Pebb partnered to purchase the Office Depot campus in Boca Raton for $104 million. Since then, the joint venture has leased out more than 75 percent of the 651,265-square-foot complex, including leasing back about half the property to Office Depot, Toledano said.
“You are seeing incredible demand for office, between Boca Raton and Miami Beach,” he said. “Unemployment here is very low. We have an amazing lifestyle. You have all the reasons in the world to move your offices from California, New York and Chicago.”
In West Palm Beach, new tenants are paying $130 a square foot in planned office towers developed by Stephen Ross’ Related Companies, Toledano added.
“Who would ever believe that would happen,” he said. “About 20 years ago, you couldn’t give office space away [in West Palm Beach.]”