Every July for the last decade or so, powerbrokers in the Miami luxury real estate market had looked forward to the arrival of wealthy Brazilians who are weary of winter weather and decide instead to visit the Florida city for a few weeks of sun and fun. The hope is that these vacationing Brazilians will buy some high-end real estate while enjoying Miami’s terrific shopping, nightlife and sandy beaches.
But because of a poor local economy and ongoing anxiety about political turmoil at home, they mostly stayed away for the last couple of summers, experts say. This year, though, all signs are pointing to a return of the Brazilians.
"They are starting to buy more properties again in the U.S., after a very trying 2016," said Fernando de Nunez y Lugones, executive vice president of ONE Sotheby’s International Realty in Miami. "We had a lot of sales last year from Brazilians that were cancelled, which is very unusual. Now we’re seeing an upsurge in Brazilian interest again."
After two bad years, the up-and-down Brazilian economy appears headed toward a gradual recovery, and many wealthy Brazilians think it’s a good time to protect their money and move some capital out of the country. Traditionally, investing in South Florida real estate has been a good bet for them. As in years past, they are looking at high-end second (or third, or fourth) homes this summer, but they are also looking to invest in income-producing property. And some nervous, fed-up Brazilians are looking to make Miami their primary residence.
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"Brazilians’ acquisitions in Miami are always linked to the exchange rate," said Mr. De Nunez y Lugones, whose agency has the exclusive listings for some of Miami’s biggest upcoming developments, including Brickell City Centre and One Thousand Museum by Zaha Hadid Architects. "When they see opportunities abroad, that’s when they pull the trigger."
"Typically, Brazilians are either No. 1 or No. 2 among foreign buyers, and usually No. 1 in dollar sales," said Edgardo Defortuna, president and CEO of Fortune International Group, which has several large developments underway in Miami and elsewhere in South Florida. "They tend to buy the more expensive units."
At his 192-unit Jade Signature luxury condo development in Sunny Isles Beach, just north of Miami, which launched sales in 2013, more than 25% of the 186 condos sold so far have gone to Brazilians, many of whom bought in 2013 and 2014.
"They really appreciate the fine attention to detail," Mr. Defortuna said. "They are very knowledgeable about types of design and architecture."
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The 54-story Turnberry Ocean Club in Sunny Isles Beach, with six full floors devoted to amenities, is also drawing a lot of Brazilian interest, said Mr. De Nunez y Lugones, whose company has the listing.
At the Turnberry, about 45% of sales are domestic, with the rest going to international buyers, he said. Of those international sales, 40% were to Mexicans, 21% to Brazilians and about 11% to Argentines, Mr. De Nunez y Lugones said. Sales for the development launched in the first quarter of 2015, but an uptick in Brazilian buyers has been fairly recent, he said.
At Three Hundred Collins in the popular South of Fifth section of Miami Beach, four of the 16 luxury condos sold so far have been bought by Brazilians. The four Brazilian buyers, who bought around a year ago, include two developers, an artist and a banker, all of whom reside in Sao Paolo and are buying there as a second or third home. Residences in the 19-unit building are priced from $1.7 million to more than $9 million and slated for completion in October 2017.
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Miami is a welcoming city for many Latin Americans
For Brazilians, Argentinians, Mexicans, Colombians, and Venezuelans, Miami has become the defacto capital of Latin America in the United States. It’s bilingual and bicultural, a welcoming second home that is both cosmopolitan and fun. They understand Miami’s vibe, thanks to the generations of Cubans who began flocking to the city in the 1950s and ’60s.
"They love the entertainment and cultural activities that Miami has to offer," Mr. Defortuna said. "Brazilians are very, very social–they love to entertain, they love to go out, they love late nights, good restaurants."
Between August 2015 and July 2016, nearly 11,000 properties worth $6.2 billion were purchased by foreign buyers in the Miami area, according to a Miami Association of Realtors and National Association of Realtors 2016 international homebuyers report. Of those properties, buyers from Venezuela, Argentina, Brazil, Colombia and Canada made up nearly half of that dollar volume.
Elite and affluent Brazilians, who make up more than half of all Latin American millionaires, have long been a powerful force in the Miami luxury market. And over the years, Miami has "proven to be a good investment for them," said Louis Birdman, the co-developer of the ultra-luxury One Thousand Museum by Zaha Hadid Architects, where the price for half-floor residences begin at $5.5 million and go to over $20 million for full-floor homes. "They’re comfortable investing in places like Miami or New York," he said.
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At his 62-story ultra-modern One Thousand Museum condo tower on Biscayne Boulevard overlooking Museum Park, "Latin America makes up 40% to 45% of the buyers we have, and more than half of those are from Brazil," he said.
"Brazilians are very design conscious and they like luxury brands," Mr. Birdman said. "They like a high level of design."
As the value of the Brazilian real drops against the dollar, it prompts investors to shelter their money in dollar-dominated assets like South Florida real estate, Mr. Birdman said.
He, too, is seeing a noticeable uptick in Brazilian interest this summer. "Over the last couple of years, they’ve seen some stabilization in their economy," he said. "Things have begun to normalize for them."
Still, though, personal safety is a big reason many Brazilians are leaving their home country.
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Because of high crime in Brazil, "people who have means can’t drive the type of car they’d like to drive or wear the type of watch they would like to," Mr. Birdman said. "Here in Miami, they can."
Because of those safety concerns and ongoing political and economic turmoil, Jay Parker, CEO of Douglas Elliman Florida, said that he is seeing Brazilians turning to Miami as their primary residence.
"More and more Brazilians are looking to the United States and specifically Florida, not just for a second home, but for a full relocation," Mr. Parker said.
Mr. De Nunez y Lugones said that while the second-home market for Brazilians remains strong, he is also seeing more of them looking to make rental income off their Miami homes, too.
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"Now they have expanded their acquisitions into more investment-driven products," he said. "They are trying to diversify their holdings and their sources of income."
Brazilians wielding influence high-end properties in Miami
It’s not just Brazilian buyers who are drawing headlines in Miami. As their luxury buildings are completed, Miami developers are turning to top-of-the-line Brazilian designers and brands to furnish common spaces and model residences.
At the 43-unit Palazzo del Sol on the ultra exclusive Fisher Island, the developer turned to Brazilian designer Christina Hamoui to design the $17.4 million model unit. It is fully outfitted with furnishings from Artefacto, a Miami-based high-end furnishings brand also from Brazil.
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This is the second most expensive of the three model units that are helping to propel sales in the 10-story condo tower, the first new construction on the island in a decade.
Paulo Bacchi, CEO of Artefacto, said his company now outfits about 50 model homes a year that are fully turnkey, including many in Miami.
At the oceanfront 1 Hotel & Homes South Beach, all 29 of the luxury penthouses were designed by well-known Brazilian designer Debora Aguiar and feature top-of-the-line Artefacto furnishings. Ms. Aguiar is known for incorporating natural materials and spacious, airy interiors that blur the line between the indoors and outdoors. Along with the penthouses, she designed the lobby and common areas for the development.
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And Miami developers and brokers, including Mr. Birdman, are not just waiting for Brazilians to come to Miami—they are taking their sales teams to Brazil to meet with wealthy buyers and entice them into having a close-up look at their Miami offerings, sometimes well before they even break ground.
Last month, a team from ONE Sotheby’s flew to Brazil to host a series of events for 150 VIP clients in Sao Paulo and Porto Alegre.
"Everyone goes to Sao Paulo," Mr. De Nunez y Lugones said. "We’re going to some of the secondary cities, too.