![Jorge Perez bets on Fisher Island with the sale of new luxury apartments](https://image.cnbcfm.com/api/v1/image/107178028-16735486881673548684-27679832356-1080pnbcnews.jpg?v=1673555007&w=750&h=422&vtcrop=y)
Just off the shores of Miami Beach, on the ultra-exclusive Fisher Island, there’s one crane at work on one construction site. That is the last plot of land available for development and an unlikely bet for luxury real estate at a time when the housing market appears to be stagnant.
Jorge Perez, also often called “the king of Miami housing,” and his affiliated group are behind the 10-story, 50-unit project with a selling price of $1.2 billion. They paid $122.6 million for the land, which was at the highest of the market.
Units start at $15 million. The project features a 15,000-square-foot, $90 million penthouse and a $55 million single-story villa with a half-acre backyard. The constructing may even have its own slipway for megayachts. Sales only began last month.
“Nearly 30% of the units are booked,” Perez said. “Contracts were over $300 million, and we didn’t really do any marketing. Nevertheless, if the market slows down a bit, we’re in a lucky situation.”
Buyers must pay a 50% non-refundable down payment on sale prior to construction.
Perez said the primary buyers are from Brazil, Latest York, Canada, Mexico and Israel. He said he sees far more domestic interest than previously because Miami has traditionally been a haven for foreign investors. It seems to echo throughout town.
View from South Florida
“Miami is a global market – 80-90% international – nevertheless it has modified through the pandemic,” said Danny Hertzberg, a luxury real estate agent at Coldwell Banker and Jills Zeder Group. “We are going to proceed to have this domestic demand for tax reasons, but in some unspecified time in the future political instability or a weaker dollar will pull [international] people in.”
Miami has been an exception within the recent decline in each home sales and costs, with prices in town still quite high. Nonetheless, the high-end was not so resistant. In keeping with Miller Samuel, an actual estate appraisal firm, expected home sales over $5 million fell 89% year-on-year in December.
“The only thing to bear in mind with Miami is that inventory is down 60% since pre-pandemic, so the difference is that inventory may be very limited,” noted Jonathan Miller, the corporate’s CEO. “This throws loads of conventional wisdom on pricing aside.”
Miller added that the Fisher Island project “may not sell out in five minutes, nevertheless it’s not out of the query even on this market.”
The property and its location are exceptional. Fisher Island is an especially exclusive 216-acre community, only accessible by ferry or yacht and open only to residents, their guests and guests of a small luxury hotel. The last apartment that sold on the island last 12 months cost $40 million, in keeping with a representative of a related group.
Hertzberg said Perez’s recent constructing “checks many boxes” for wealthier buyers who’ve had a recent mentality for the reason that starting of the pandemic.
“They need amenities, privacy and security. That is the major factor. They need convenience. There may be a non-public school there. Own restaurants, grocery stores. Private beach,” said Herzberg.
He also noted that the immediate entry into the golf club for residents is loads of fun. He said that in greater Miami there’s a waiting list of five to seven years to affix a golf club.
“I’m sure they’ll sell. The query is when is it getting in the economy and the way aggressive are they on pricing,” Hertzberg said. “If I used to be betting, they’d be at the highest of the list. It just has the proper elements for the economy and the world we’re in.”
What the longer term may bring
Perez, who built a whole bunch of properties in South Florida and survived an enormous housing crash through the Great Recession, didn’t seem in any respect concerned concerning the future of his recent project.
“Yes, the market across the country has declined, especially in high-end establishments, but we discover that in our enclaves like Fisher Island, we proceed to see strong interest from individuals who can afford the best,” Perez said.
But he is anxious concerning the wider economy and the broader real estate market.
“After all it worries me. It bothers me every single day. I get up every single day occupied with what is going on to occur within the economy,” Perez said. “We predict rates of interest and inflation have almost peaked. I believe we will have a tricky 12 months to a 12 months and a half, two years ahead of us. And we’re able to weather that storm should it occur.”
If Perez gets $90 million for the penthouse, it would be the most costly condo on the market in all of South Florida.