Chinese target Miami residences
Written by Laura Stace on November 13, 2013
Miami’s smoking hot real estate market and its savvy realtors paired with Asia’s astute investors are proving to be a match made in long distance realty heaven.
Just back from the Top Marques expo in Shanghai – where all things luxury were on display for wealthy attendees including cars, jewelry, art and real estate – is Eddy Martinez, CEO and founder of Worldwide Properties.
Joining Mr. Martinez on the trip was Worldwide co-founder and director of sales Roland Ortiz, senior agent Lily Zanardi and a Chinese speaking member of their Miami Beach-based team.
Mr. Martinez returns to Miami – by way of Las Vegas, where he toured his new listing, the $19.5 million “Hacienda Palomino” home Michael Jackson leased from late 2006 to the time of his death – with a few luxury pre-construction sales pending.
The condos of interest include one in downtown in the $4 million to $5 million range and one in the Brickell corridor in the $1 million range.
The potential buyers, he said, are in the process of speaking with their attorneys and have all the necessary paperwork. Mr. Martinez said he is expecting purchase agreements to come through in a few weeks.
The response was not something Mr. Martinez was anticipating, as he said he heard that doing business in China was all about creating and building trust with clients and he expected to nurture his relationships upon returning to Miami.
At the invitation-only show, Mr. Martinez said, he joined firms from Australia and England in the real estate section.
He said he and his team showed 10 properties, all pre-construction, from just under $1 million to $14 million in the non-penthouse category and penthouses ranging from $35 million to $50 million.
Also at the show, the team announced the listing of Michael Jackson’s former Las Vegas residence.
The Chinese, he said, are more accustomed to traveling to Los Angeles, San Francisco and New York but are becoming increasingly open-minded about coming to Miami.
Most potential customers, he said, didn’t know how much Miami had developed culturally but were impressed to learn about the thriving arts scene.
Also appealing, Mr. Martinez said, was that Miami has a large concentration of international banking and no state income tax.
Mr. Martinez said for the past year he had been reading market trend reports in the media that indicated Chinese were looking more and more at Florida.
He said according to data compiled by Chinese real estate websites and reported by journalists, Miami was coming it at number two, behind California, as a place where investors were looking.
On US soil, the numbers have been indicating a slight increase in Chinese buyers entering the market.
Ralph De Martino, president of Ocean International Realty, said according to data complied by the National Association of Realtors, as a percentage of international buyers, Chinese buyers in Florida had grown from 0.05% in 2008 to 3.7% this year.
This year, he said, 21.1% of international purchases in Florida were in the Miami/Miami Beach market, with Asian buyers for 5% of those.
Also this year in Florida, Mr. De Martino said, 6.9% of all international buyers were from Asia.
L. J. Rodriguez, Midtown Sales Director for Fortune International, said he has seen a recent uptick of Chinese buyers in the market.
Up until about 2½ months ago, he said, buyers were almost exclusively Latin American. But now, he said, Chinese investment groups have purchased properties in Midtown.
Chinese investors, he said, are looking to diversify their investments. This, paired with the “steps Miami is taking to put itself on the global map, is what is resonating on their radar, and then they see the prices.”
The majority of Midtown prices are in the $300 per square foot range -– $356 per square foot for a one bed, one and a half bath in 4 Midtown and $375 per square foot for a one bed, one bath in Midblock .
This, he said, has attracted the Chinese investment buyer to the area due to its relative value compared to competing pre-construction projects. Also, most units have tenants in place, which provides the opportunity for investors to begin earning on their investment immediately.
Getting the business from so far afield is all about relationships and referrals, Mr. Rodriguez said, adding that a Fortune International representative was traveling in Asia for meetings with top brokers.
Saddy Delgado, vice president of Sotheby’s International, travels to varying parts of Asia for business at least three times a year.
She visited China four years ago when her son moved there and said she was “mesmerized” by Shanghai.
Miss Delgado said she saw the potential for Chinese buyers to invest in Miami and has seen this occur naturally, little by little.
Earlier this year, she said, China placed restrictions on property ownership to “cool down” the market.
Miss Delgado said Chinese buyers are starting to see Miami as a hot spot and are realizing prices aren’t as high as New York and other major cities.
They are looking for safe, long-term investment, she said, and aren’t looking to flip a property.
Most of the buyers, she said, pay all cash, but if they do require financing they typically secure it from a New York-based institution as they aren’t generally first-time buyers.