While participating in a panel discussion during the Urban Land Institute’s annual Miami Condo Market Symposium, Related Group CEO Jorge Perez had a sobering take on the city’s booming real estate market.
“While we are here to promote Miami, it is not yet a global city,” Perez said. “We are highly dependent on buyers from New York, Europe and South America. We have very few local buyers even for condos going for $500 a square foot.”
On Thursday morning at downtown Miami’s Epic Hotel, Perez joined fellow developers Ugo Colombo, Eduardo Costantini and Richard LeFrak, along with Douglas Elliman chairman Howard Lorber, for a discussion on the latest trends in the Miami market. Perez said Miami lacks a young, strong middle class and still has a hard time attracting Fortune 500 companies to open offices in the city.
“We have done a poor job attracting high-paying jobs in comparison to Atlanta or Houston,” Perez told the standing room only crowd. “We have a long way to go.”
LeFrak, the New York real estate mogul who is developing 1 Hotel & Homes South Beach, echoed Perez’s comments.
“I was recently speaking to the CEO of a New York financial company,” Lefrak said. “He told me all his employees over 55 want to relocate to Miami. But he doesn’t know if he can convince those under 55 to move.”
The symposium also featured a discussion with commercial lenders on the resurgence of construction financing for Miami condo projects.
Panel participant Jonathan Roth, president of Canyon Capital Realty Advisors, and Michael Wadler, vice president of real estate finance for HSBC Bank USA, noted banks and nontraditional lenders are willing to loan money to developers who have a proven track record of finishing projects and have a substantial number of presold units.