While South American buyers have been buying up condominiums in South Florida and New York City, helping to boost the super high-end in both markets, American real estate companies are now returning the favor, the New York Times reported.
American developers — like the Related Group, Donald Trump and billionaire Sam Zell — are working to build residential housing and commercial spaces in Brazil, Uruguay and Colombia, despite American real estate and banking execs’ usual reticence to delve into those markets, which were long seen as too risky to invest in.
But things are changing in South America, the Times notes.
The average price of a four-bedroom apartment in the Ipanema neighborhood in Rio de Janeiro rose about sixfold between 2008 to 2012, and now exceeds $2.5 million, the Times said.
Related established a Brazilian subsidiary last year, and already has mixed-use projects rising in Sao Paulo, including a $100 million condo project in the Morumbi area, the Times said. Meanwhile, the Trump Organization is building a 4.5-million office tower in the Port Zone region of Rio.
“We feel that Brazil over the next decade will have a much greater growth rate than the United States, and definitely than Europe,” said Jorge Pérez, chairman of Miami-based Related Group. But, having learned from previous booms, Perez remained restrained in his enthusiasm. “There will be bumps on the road, like [in] all development markets,” he said. [NYT] –Guelda Voien