Miami Welcomes Russian Investors
Russian interest in Florida properties has persisted since the blockbuster $95 million sale of Donald Trump’s Palm Beach mansion to a Russian billionaire last year. Not an isolated incident, Trump claims that New York and Palm Beach are targeted by the wealthiest soviet visitors.
In the case of Trump’s sale, the buyer new exactly what he wanted and paid in cash. This is common behavior according to Michael Valdes of Sotheby’s International Realty in Miami. He has sold almost $100 million worth of property to Russian buyers in the last two years.
The U.S. incentives for foreign investors are tempting. In the last two years, the U.S. dollar dropped 13 percent against the ruble. Real estate prices in Moscow are about $50,000 to $60,000 per square meter, versus Miami prices at $17,000 to $20,000. A luxury home can still be had in the $800,000 range, but in Moscow, that wouldn’t even buy a condo. Low prices, the value of the ruble, combined with 365 days of sunny weather make South Florida an attractive choice for Russian snowbirds.
Some of the more popular destinations include Miami, Boca Raton, Fisher Island, Indian Creek and Star Island, with home values starting at about $5 million and going up from there. The islands are especially appealing because of the additional privacy and security they offer. It’s not uncommon to see purchases made through corporations or trusts so that buyers are able to disguise their holdings. There is a real fear of kidnapping and political concerns.
Nelson Gonzalez, senior vice president of EWM Realtors in Miami comments on the ease of working with his Russian clients. “They’re coming well-prepared, sending representatives beforehand and bringing interpreters”. He recently showed a $35 million property on Indian Creek to interested clients. Some are looking for a seasonal move and others are definitely cashing in on investment opportunities with distressed properties.
Mirax Group, a leading Russian property developer is currently working on Aqua Project, a 13 home, $75 million development near Miami Beach. These new-urbanism-style homes come fully furnished (even silverware and linens), with a $5 million price tag. The Mirax Group feels investment opportunities in Miami are just beginning.
The average Russian buyer is relatively young, wealthy, and in their 40’s. Occupations range from private businessmen to rock stars. Some have families and want their children educated in the U.S. One thing they all have in common, they love the Florida lifestyle, gorgeous scenery and the sunshine.