How strong sector fundamentals and sophisticated design buoy Miami’s real estate market in trying times
Edgardo Defortuna President & CEO – Fortune International Group
Given that Miami’s real estate sector relies heavily on international buyers, how has the local market been impacted by a strong U.S. dollar?
Miami is particularly sensitive to events taking place in other parts of the globe—whether this pertains to currency exchange rates or government policies. At Fortune, we believe that the world is in love with Miami so we don’t worry so much about what is happening in particular countries; rather, we focus our efforts on opening up new markets and forging new partnerships with those who may still be unfamiliar with Miami. Everyone wants a piece of the Miami pie. Our job is to find the right mix and the right timing for them.
Miami’s strategic location and good climate are no doubt attracting investors and buyers. What role do the actual buildings in the market play in elevating Miami’s global profile?
Developers today are not just concerned with how buildings look from the exterior, but also with how they function and interact with the environment. For instance, thorough sun studies are conducted, especially for buildings on the beach, to analyze how shadows are created and to ensure that said shadows do not render certain areas, like the pool, unusable after 1 o’clock.
We are also seeing innovations that make more efficient use of space. For example, our architecture partners Herzog and de Meuron came up with the brilliant idea for our Jade Signature project in Sunny Isles to put the parking underground—40 feet under water that is. It makes a big difference and makes everything in the building work—the integration of the pool, the beach, the restaurants and all the amenities. It really makes a difference in the lifestyle of the consumers. Having this level of attention to detail makes for really spectacular buildings and makes Miami far more attractive to a larger audience.
What are the greatest concerns facing Miami’s real estate market?
I worry most about perception because perception becomes reality. The media and others who report on this market often do not understand how the new financing model in Miami is working. They talk about a supply of 10,000 or 15,000 units, but don’t mention that 80 percent to 90 percent of those units have already been sold, with 50 percent deposit. Those deposits are used to finance construction so the leverage today is significantly below what it was in the previous cycle. We are financing less that 30 percent of costs through bank leverage, and these are signs of a healthy market.