Latin American financial giants are expanding their Miami footprint to hang on to their wealthy clients, who keep parking their cash in South Florida real estate.
The most recent example is Banco Itau, Brazil’s largest publicly-traded bank, which is doubling its square footage at downtown Miami’s Southeast Financial Center, the largest office tower in Florida.
“In addition to the normal trade business that they’ve had and the benefit of the stronger economies, now you’ve got more Latin American citizens investing in the U.S.,” Donald Cartwright, a senior vice president at Jones Lang Lasalle responsible for leases at the tower, told The Real Deal.
Foreign banks are hoping to compete for the business of Latin Americans who are spending more time and money in South Florida, including managing market capital flight, such as in Argentina, where the central bank reported a $3.4 billion net capital outflow last year and $21.5 billion outflow in 2011. The government has responded with controversial capital controls.
Last month Chile’s third-largest bank, Banco de Credito e Inversiones, purchased City National Bank from Spanish investors for $882.8 million as part of an effort to build its first U.S. banking operation.
BCI also recently expanded its lease to 22,567 square feet at Southeast Financial Center.
Banking is among a slate of industries with growing southern exposure: Latin American condo and hospitality developers are also moving in to take advantage of their compatriots’ condo shopping spree.
To Latin Americans, Miami and the Beaches still look cheap compared to prices at home in Caracas, Buenos Aires, Rio de Janeiro and other regional cities. Latin American hotel companies are also setting up shop in South Florida, including the first U.S. location of Chile’s Atton Hotels, as TRD previously reported.
Miami’s position as a center for Latin American trade and finance was largely built on the cocaine trade of the 1980s. Its role since has ebbed and flowed depending on the health and stability of Latin American economies, Cartwright said.
While the region has experienced steady growth in recent years, weathering the global recession better than nearly anywhere, rising crime rates and drug trafficking enterprises are sending wealthy Latin Americans packing for Florida.