Designer names attract Miami home buyers
SUNNY ISLES BEACH, Florida — 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 ultra-wealthy 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. 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 caché. 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 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 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 $6.3 million, according to Redfin.
Global buyers are largely paying with cash. Some may be shifting their holdings from American 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 $400 billion, according to court filings.
Dezer pitches Miami as a bargain compared with other global cities. The average Miami Beach condo sells for about $760 a square foot, according to the brokerage Christie’s International. That makes it cheaper than a comparable pad in Monaco, New York City, London, Moscow, Paris or Beijing.
With only so much oceanfront, the condos should become a scarce resource that appreciates over time, Dezer said.