Foreign investment in Miami real estate remains strong, despite the weakening of currencies in feeder markets from South America and Europe, according to elected officials, developers and lenders who addressed an intimate gathering of investment bankers and lawyers on Thursday.
During his opening remarks at Miami law firm Holland & Knight’s first annual Roundtable Forum, Miami-Dade Mayor Carlos Gimenez said the county’s unemployment rate has dropped to pre-recession levels and real estate development has helped fuel job creation.
“These are not props,” Gimenez said, gesturing to the buildings under construction outside the window of Holland & Knight’s meeting room on the 33rd floor at 701 Brickell Avenue. “There is really a boom happening and we are headed to become one of the great cities of the world,” the mayor asserted.
During a panel discussion about project financing, Terra Group President David Martin told the audience of about five dozen participants that a strong U.S. dollar and economy are driving buyers from the Midwest and Northeast to purchase condos not only in South Beach, but also in emerging neighborhoods like North Beach, where his company plans to build a 20-story, 64-unit tower at 8701 Collins Avenue.
“You are seeing people from New York, Connecticut, and Cleveland buying in North Beach,” Martin said. “Even with devaluations of currencies in Latin American countries and the U.S. dollar strengthening, we are still seeing a huge influx of foreign investment.”
Panelist Alan Ojeda, founder and chief executive of Rilea Group, said foreign investors no longer simply view Miami as a safe haven for flight capital. “If all they wanted was to protect their money, they can send it to Zurich,” he said.
“When we started Downtown Dadeland, the [Venezuelan] bolivar was trading at 70 cents to $1. Now, it is below 30 [cents]. So sure, it is a concern … Luckily, there are still many investors who want to be here,” Ojeda said. “But buying a condo or a single family home gives you the sense they want to enjoy their money.”
During another panel discussion, developer and Codina Partners Executive Chairman Armando Codina touted the progress of his company’s signature mixed project, Downtown Doral, which encompasses eight to nine mid-rise condo towers, 70 retail stores and restaurants, and more than a million square feet of office space in four buildings along a new Main Street.
“It is 95 percent built,” he said. “And the retail will be open by the end of the year.”
Codina acknowledged that the weakening buying power of South American investors, particularly Venezuelans who have fueled demand in Doral, has slightly slowed down sales of condos.
“It is having a dampening effect,” he said.