Text size: A- | A+
Cash-Rich Venezuelans Help Resuscitate Miami Real Estate


Cash-Rich Venezuelans Help Resuscitate Miami Real Estate


By Kevin Gray

Many Venezuelans have long had a love affair with Miami, but rarely has it been so intense - as least judging by the property market.

The cash-rich South Americans are leading a charge into Miami real estate, helping to spur a recovery in a market that once stood as a poster child of America's housing bust.

Enticed by what they view as cheap real estate prices and paying in cash, Venezuelan buyers have snapped up condominiums, apartments and houses as investments or second homes.

They are joined by other South Americans cashing in on recent heady economic growth in their region, which also weathered the global downturn fairly well.

Wealthy Venezuelans, faced with dwindling investment opportunities back home and worried about what they describe as a crackdown on the country's domestic housing market by leftist President Hugo Chavez, have become sought-after clients for real estate developers and brokers.

"They pull out their checkbooks right away," said Harvey Hernandez, a Venezuelan-born managing director of the Newgard Group, which is developing BrickellHouse, one of the first condo towers scheduled to be built since the real estate crash.

At BrickellHouse, more than half of the tower's 374 units have been sold, with Venezuelans representing around 40 percent of the buyers. The tower, located in Miami's financial district with views of Biscayne Bay, is slated to start construction later this year.

Venezuelans have also helped reinvigorate real estate markets in Miami suburbs like Doral and Weston, home to large Venezuelan expatriate communities.

"It's the Chavez effect," said Cleto Puzzi, a Venezuelan who sold an apartment he owned in Spain and bought two in Doral that he now rents. "You can't invest in Venezuela these days."

The Venezuelan leader's penchant for expropriations has rattled many well-to-do Venezuelans. Last year, Chavez introduced legislation that makes it more difficult for landlords to evict delinquent renters, spooking property owners and chilling interest in one of the few investment options in Venezuela.

"Chavez basically has served as the greatest backstop the South Florida and Miami condo market has seen," said Peter Zalewski, a principal with the real estate consultancy Condo Vultures.

The wave of property buying by Venezuelans and other South Americans has re-energized Miami real estate developers who are rolling out new projects even as Florida remains among the states hardest hit by the housing collapse. It has also transformed Miami into a top real estate destination for international buyers.

"Latin America has really helped to breathe new life into our market," said Jorge Perez, the chairman and chief executive of Related Group, a leading South Florida developer.

Venezuelans, like many Latin Americans, have historically turned to Miami real estate as a safe haven against political and economic volatility at home.

According to the Miami Association of Realtors, Venezuelans were the top foreign buyers in 2011 and accounted for 15 percent of all sales to international buyers, followed closely by Brazilians and Argentines.

Last year, sales of houses and condos in the Miami area rose a record 46 percent compared with 2010, the association said. Condo prices finally began to rebound in the second half of last year, and December also saw an appreciation in single-family homes for the first time since the recession.

Latin Americans are turning to Miami real estate as property prices back home have soared.

A recent report by Miami-based RelatedISG, a real estate sales group, said prices of downtown Miami apartments and condos trail those at newly built properties in several South American cities, including Rio de Janeiro, Sao Paulo, Buenos Aires and Bogota.

Prices in downtown Miami average more than $400 a square foot, the report said. That compares with $1,000 a square foot for properties in Rio de Janeiro, $900 in Sao Paulo and $550 in Buenos Aires.

Surging real estate prices in Brazil have also sent Brazilians on the hunt for Miami property.

For Brazilians, "everything is so cheap. Going to dinner, buying a shirt, buying a condo," said Jacques Claudio Stivelman, the president of Miami-based Shefaor Development and a native of Brazil.

Big-spending Brazilians are drawing particular interest among Miami realty agents who say they come looking for high-end oceanfront properties.

"Brazilians are buying in the million dollar plus range," said Zalewski.

Foreign interest is not only limited to buying real estate. International developers are also heavily involved in more than 20 planned building projects, many of them likely to be marketed to foreign investors.

The interest from Latin Americans has led real estate developers, many of whom were stung during the U.S. housing crash, to adopt new financing and sales models.

Before the bust, Miami condo and real estate developers and property buyers relied heavily on bank financing. But as the market unraveled, developers watched as clients walked away from their deposits and banks, worried about falling housing prices, shut off lending. Empty condo towers soon dotted Miami's downtown skyline.

With Latin Americans and other non-U.S. buyers now representing a majority of real estate sales in Miami, developers have unveiled a more cash-focused financing option familiar to foreign buyers.

The pay-as-you-go model means buyers pay at certain stages of construction. It is used widely in Latin America and requires buyers to pay as much 80 percent of the property's final price before construction is completed.

"I don't think this is a long-term approach, this is a reaction to the way this market is in its current form," said Perez.

Ivan Martinez, a 40-year-old lawyer in Caracas, recently bought two apartments at BrickellHouse for $250,000 and $400,000.

"Miami is like a second home for me," he said, rattling off trips he had made since he was a child. Venezuela's political instability, he said, was a key factor in his decision.

Some realtors who work frequently with Venezuelans said they expect their interest in Miami real estate to remain strong, particularly if Chavez wins a presidential election later this year and extends his 13 years in power.

Eli Santurio, a sales manager at Keyes Realtor, said many realtors were joining Venezuelans in keeping a close eye on the run-up to the October vote.

"That's what everybody is talking about," she said. "If Chavez wins, then sales could increase big time."

"PRIVACY POLICY": Newgard Development Group respects the privacy of visitors to its website and does not generally seek to identify its visitors or to collect information regardingtheir use of this website. Although Newgard Development Group may track thenumber of visits to each of the pages of its website, no Personal Information is collected in the process. The type of information that is automatically collected by Newgard Development Group can include date and time of access of the website, the Internet protocol address of the computer that you are using, the domain and host from which you access the Internet, your browser software and operating system, and the specific activities you are engaged in while visiting the website. This aggregate tracking information is used to help Newgard Development Group improve and enhance the website experience for all of itsvisitors. Newgard Development Group will collect some limited Personal Information that you voluntarily provide such as your name, address, telephone number and/or email address, if you communicate with us via email in response to any prompts on this website. Additionally, any information collected about you from this website may be associated with other information that NewgardDevelopment Group has collected from other sources about you. Under California law, California residents who have provided personally identifiable information to a company may have the right to request a list of all third parties to whom that company had disclosed such information for the third parties' direct marketing purposes during the preceding calendar year, along with a list of the categories of Personal Information that had been so disclosed. However, Newgard Development Group policy, as disclosed on this website, does not currently permit Newgard Development Group to share the Personal Information collected at this website about you with non-affiliated third parties for such third parties' direct marketing purposes. Moreover, even if Newgard Development Group policy permitted the disclosure of Personal Information to third parties for such third parties' direct marketing purposes, because Newgard Development Group provides you with an opportunity to opt out of such disclosure, Newgard Development Group does not have to provide you with such lists. If you are a California resident who would like information on how to exercise your rights concerning third party disclosures, you may send an email to or contact us via postal mail at: NEWGARD DEVELOPMENT GROUP MAKES NO WARRANTY OR REPRESENTATION REGARDING OF CONFIDENTIALITY OF ANY COMMUNICATION OR INFORMATION TRANSMITTED ON THIS SITE OR ANY WEB SITE LINKED TO THIS SITE. YOU AGREE THAT NEITHER NEWGARD DEVELOPMENT GROUP, NOR ANY OTHER PROVIDERS OF PRODUCTS OR SERVICES RELATED TO THIS SITE, ARE RESPONSIBLE FOR THE CONFIDENTIALITY OF ANY INFORMATION, (INCLUDING WITHOUT LIMITATION, PERSONALLY IDENTIFIABLE INFORMATION, EMAIL ADDRESS, PHONE NUMBER, ETC.), AND NEITHER NEWGARD DEVELOPMENT GROUP, NOR ANY OTHER PROVIDERS OF PRODUCTS OR SERVICES RELATED TO THIS SITE, ARE RESPONSIBLE FOR ANY DAMAGES THAT MAY ARISE FROM DISCLOSURE OF SUCH INFORMATION.

Links to Other Websites From time to time, the Newgard Development Group website may contain links to other websites that are not controlled and/or maintained by Newgard Development Group. Please be aware that these other websites may have different privacy policies which may subject you to different privacy practices. Please review the privacy policies of such other websites for information concerning what information is collected on such websites and how it is used.

Changes in Policy This Privacy Policy applies to current and former visitors to the Newgard Development Group website. From time to time, Newgard Development Group's Privacy Policy may change. Newgard Development Group will post changes to the Privacy Policy on this website. Please review this Privacy Policy often so that you will remain abreast of Newgard Development Group's current policies, including its policies concerning the gathering and use of information that may be collected on our website. You are responsible for making sure you are aware of the provisions of Newgard Development Group's most current policy (see date below).

Terms and Conditions of Use Disclaimer None of the information or materials contained on or accessible through this website, including any information or materials accessible in any password protected areas, should be construed as providing any type of investment or other advice to you, nor should you consider it as a solicitation, recommendation, endorsement or offer to you to purchase or sell any investment vehicle, financial security or other financial instrument.

Use of Materials All material on this website, including but not limited to images, logos, trademarks, appearance, graphics and any documentation (collectively referred to as the"Material"), is protected under various intellectual property laws and (except where otherwise stated) owned or controlled by Newgard Development Group, or used with permission of the owner(s) of such Material. Except as otherwise indicated on this website, copying, reproduction, uploading, downloading, transmitting or any other use of this website or of any of theMaterial, in whole or part, without the express permission of Newgard Development Group, is prohibited. You may, however, copy, reproduce, download, transmit and/or print individual pages contained on this website for the purpose of accessing this website under these Terms and Conditions and/or your personal, non-commercial use, provided you agree not to conceal, remove or alter any trademark, copyright or other notice contained on: (i) this website; (ii) any of the Material; or (iii) any such individual pages so copied, reproduced, downloaded, transmitted or printed. Any unauthorized use of this website and/or the Materials may subject the user to criminal prosecution and/or civil liability under applicable law. Limitation of Liability and Use of Disclaimer Newgard Development Group is not responsible for any damages or loss related to the use of this website. THIS WEBSITE, ALL MATERIAL CONTAINED ONTHIS WEBSITE, AND ALL LINKS OR OTHER ITEMS RELATED THERETO ARE TRANSMITTED AND DISTRIBUTED "AS IS" AND WITHOUT WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, THAT THE WEBSITE, ITS FEATURES AND FUNCTIONS WILL BE AVAILABLE FOR USE OR FUNCTION AS DESCRIBED. THERE ARE NO WARRANTIES REGARDING MERCHANTABILITY, ACCURACY, FITNESS FOR A PARTICULAR PURPOSE, TITLE, SECURITY, OR MERCHANTABILITY WITH RESPECT TO THEWEBSITE OR THE MATERIALS CONTAINED HEREON. ANY INFORMATION CONTAINED WITHINTHIS WEBSITE IS SUBJECT TO AMENDMENT, REVISION OR UPDATING. NEWGARD DEVELOPMENT GROUP RESERVES THE RIGHT TO SUSPEND OR WITHDRAW ACCESS TO THE PAGES OF THISWEBSITE WITHOUT NOTICE AT ANY TIME AND ACCEPTS NO RESPONSIBILITY FOR THESE PAGES NOT BEING AVAILABLE AT ALL TIMES. NEWGARD DEVELOPMENT GROUP SHALL NOT BE LIABLE FOR ANY ALLEGED DAMAGE OR INJURY, INCLUDING BUT NOT LIMITED TO ANY COMPENSATORY, CONSEQUENTIAL, DIRECT, INDIRECT AND/OR SPECIAL DAMAGES, THAT RESULT FROM YOUR USE OR INABILITY TO USE OR ACCESS THIS WEBSITE OR ANY MATERIALS CONTAINED HEREON OR FROM ANY COMPUTER VIRUS, MALFUNCTION OR OTHERFAILURE.