Care to live in a Porsche? Designer labels are drawing luxury home buyers to Miami
The wow factor for Miami's skyscraper condos no longer comes from a dazzling Atlantic Ocean view.
It takes something more audacious to sell beachfront property these days to the global ultra-wealthy who arrive in Miami with millions to spend on second or third homes. It takes words invested with meaning in the language of the international jet set:
Porsche. Giorgio Armani. Fendi.
With a slew of residential and hotel developments, Miami is embracing the notion that homes, like cars, handbags and jewelry, should carry luxe designer labels. The trend has spread from Europe, Asia and the Middle East, where developers discovered a few years ago that luxury-branded hotels and homes could command huge premiums that the moneyed set would happily pay.
Having transformed New York and London, the wealthy are increasingly pursuing new havens. Miami is luring Argentinians, Brazilians, Chinese, Russians and French, some of whom seek refuge from political instability and higher taxes at home. The purchases go beyond the appeal of haute logos: Owning an asset priced in dollars can protect fortunes from the shrunken values of euros, pesos and rubles.
The pull is so powerful that developer Gil Dezer's Porsche Design Tower is mostly sold-out, even though construction won't wrap until 2016, meaning that most buyers committed millions based on blueprints.
Shaped like a piston driven into sand, the concrete-and-glass Porsche Design Tower will contain three car elevators. Each can whisk a convertible up 60 stories and then slide it into the owner's personal steel-reinforced garage. (The owner can stay in the driver's seat.) Inside the apartments, curved windows capture a vista of waves billowing from a midnight blue into a pale green along the shore.
"What we're selling is luxury," Dezer said. "The buyers already know the brand. They like the style, they like the look and that's why they feel more comfortable buying it."
Dezer is also taking reservations for condos at the Armani Casa. The Chateau Group is building the Fendi Chateau (named for the Italian fashion house) steps from the Chanel, Gucci and Tiffany boutiques. Nearby is the Faena District, a condo, hotel and cultural center backed by Argentinian hotelier and fashion designer Alan Faena.
Their emergence has spawned thousands of skilled construction jobs. Yet it's also walled off Miami's coastline behind a phalanx of skyscrapers that has isolated low- and middle-income residents. Many have had to buy farther and farther inland, said Aaron Drucker, a managing agent for Redfin, the real estate brokerage.
"Locals are not really part of the party," Drucker said.
Demand from European and South American buyers caused prices for the top 5 percent of homes around Miami Beach to surge 66 percent in the past year to $6.3 million, according to Redfin. That compares with a 5 percent increase in luxury prices nationwide.
Real estate developers enjoy a growing pool of wealth to target. Roughly 173,000 individuals worldwide are worth above $30 million, according to a report by London-based real estate consultancy Knight-Frank. Their numbers are forecast to swell an additional 34 percent in the next decade.
In setting up the Porsche Design Tower, Dezer identified and sent packages to 1,500 individuals with an affinity for the German automaker. The outreach produced 62 sales.
More than 90 percent of the 132 condo units have been sold. Prices started at $4 million, with penthouses listed for above $30 million. The buyers agree to pay 50 percent of the price in installments during construction — essentially financing the development on more generous terms than some banks would.
Just the idea of the car elevator was enough to persuade Juan Pablo Verdiquio to buy at the Porsche Design Tower.
"I took a leap of faith," said Verdiquio, who had moved to Miami from Argentina a few years earlier and launched a construction business.
For Verdiquio, who drives a Porsche 911 4S, the tower seemed a perfect fit. So he bought an apartment.
But then Dezer showed him blueprints for the Armani building, where prices start at $1.5 million. Verdiquio bought a unit there, too.
Yet Dezer also pitches Miami as a bargain. The average Miami Beach condo sells for roughly $760 a square foot, making it cheaper than most other international cities, according to the brokerage Christie's International.
The condos can also insulate buyers from the devaluation of foreign currencies against the dollar.
A Russian who bought a $1 million home in Miami last year would have spent the equivalent of 34 million rubles. Because the ruble has since plunged, that home is worth roughly 60 million rubles.
"People look at these apartments as bank accounts," Dezer said.