Russian Real Estate Developer Sets His Sights on Miami

Russian property mogul Vladislav Doronin flew to Milan earlier this year to wrap up his deal with Italian fashion house Missoni. The company, he believed, was partnering with him on one of his first U.S. developments. But once he arrived, Mr. Doronin realized he had been mistaken. Missoni family members bluntly told him they made no commitment. What’s more, he had only a couple of hours to convince them to join him on his $350 million luxury condo project in Miami. After six hours of eating, toasting and intense negotiations, the family came around. Missoni agreed to lend its name to Mr. Doronin’s latest project and design the interiors and common areas. “We are good friends now,” he said during an interview this month at his 71st floor apartment in Manhattan’s Time Warner Center. The 53-year-old Russian billionaire is going to need those persuasion skills as his new U.S. property company, OKO Group, launches three luxury condo projects. He is building in South Florida, an oversupplied market that has started to soften after years of cheap financing and soaring prices. The number of Miami Beach condo transactions in the fourth quarter was down 20% from the year earlier, according to appraisal firm Miller Samuel Inc. A strong U.S. dollar in recent years has cut the buying power of Russian, Latin American and European investors, whose purchases had helped to prop up prices in Miami and other major U.S. cities. Volatile U.S. stock markets, meanwhile, have made locals wary of making big purchases. Many Miami developers have put on hold or canceled more than half a dozen projects planned when markets were rising. “You need to deliver good product, sophisticated product, and you will be different,” Mr. Doronin said. All told, OKO will spend $1 billion to acquire land and develop the three Miami projects. “I am spending bucks,” Mr. Doronin said. First up for OKO: a 57-story residential complex, which is under construction in Miami’s trendy Edgewater neighborhood and begins marketing this month. Called Missoni Baia, the project will include spa treatment rooms, three swimming pools and private terraces overlooking Biscayne Bay. OKO plans to sell units for an average cost of $900 a square foot. The complex is slated to be completed in 2019. Mr. Doronin expects to break ground on two other luxury condo buildings in the Miami area in 2017. Mr. Doronin said even with prices under pressure in some major markets, the U.S. looks like a safe place to invest these days. “Right now the world is a little shaky,” he said. “The U.S. is a good investment for us because it is a secure market.” He believes fresh foreign buyers will step into Miami’s real-estate market, even as older ones have held back their spending. Chinese investors look particularly promising, he said. “The Chinese are coming now,” he said. “They buy baskets of apartments. Like, five apartments at a time.” Mr. Doronin was born in Leningrad, now called St. Petersburg. In 1985, he left Russia for Switzerland, where he worked as a commodities trader for Marc Rich & Co., the firm founded by Marc Rich, the famed oil trader who was charged by the U.S. with tax evasion and busting sanctions with Iran before he was pardoned by President Bill Clinton. Mr. Doronin switched to real estate in 1993 when he launched Capital Group in Moscow, eventually accumulating a portfolio with a total of seven million square meters of space. With more than 70 real-estate projects completed or under way, he is one of the largest developers in Russia. His OKO Tower in central Moscow is 1,160 feet high, making it Europe’s tallest completed skyscraper. Mr. Doronin is also owner of Aman, the luxury hotel operator famous for intimate villas and celebrity guests. He says he wants to expand the brand beyond its traditional resort settings and into major city centers, the first of which opened in Tokyo in December 2014. With rooms starting at about $1,200 a night, Aman Tokyo is one of the most expensive stays per night in Asia. Tokyo’s average daily rate this year through March has been $382, according to data tracker STR Inc. He is now scouting sites in Miami, Los Angeles, Paris, Hong Kong and other major cities for Aman hotels. Mr. Doronin and a partner last year paid more than $500 million for the top 20 floors of the Crown Building on Manhattan’s Fifth Avenue, and some hotel brokers say he is interested in installing an Aman hotel at that prestigious address. The Russian developer declined to comment, saying only that he is interested in a Manhattan site, and it will be “a big decision.” This article originally appeared on The Wall Street Journal.