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By Carla Vianna, Daily Business Review
Craig Studnicky has lived in the Miami region for 25 years, yet he's never sold a condominium to a Chinese buyer — until now.
Studnicky, a principal with International Sales Group in Aventura, has recently tallied six sales totaling $7 million at a condo-hotel on Fort Lauderdale beach to Chinese investors.
"Like so many of my competitors, we've been fascinated with the concept of China," he said.
Tapping into the Chinese market, home to the world's second largest economy, has been a longstanding item on Miami's real estate wish list. In the race to secure a Miami-China connection, local brokerage houses have deployed marketing trips abroad, hired Chinese-speaking agents and sought partnerships with China-based companies.
ISG recently toured several Miami-Dade County condo properties with 18 Chinese senior managers from Homelink, a top real estate company based in Beijing that ISG linked up with last year.
Stops on the tour included Muse Residences in Sunny Isles Beach, Echo Brickell in Miami's Brickell district and its northern counterpart, Echo Aventura.
"When they look at a property like Echo Brickell, they're fascinated with the architecture," Studnicky said.
The foreign brokers spent the night at the W Fort Lauderdale, where Studnicky locked in his sales to Chinese investors. The beachfront property's 147 condos are under renovation.
The brokers from Homelink said their clients are attracted to condos fit for a quick switch to the rental market.
"The W is a condo-hotel on the beach in Fort Lauderdale, so they know that will rent easily," Studnicky said.
Sophisticated Chinese brokers looked at every nook and cranny when touring the units, he said. They've studied the Miami rental market, and they're aware of the glut of rental inventory in the pipeline. But they're also aware of Miami's relatively inexpensive prices compared with New York City and San Francisco.
The takeaway: "Rents aren't as good, but appreciation potential is huge," Studnicky said.
Also included in the tour was Downtown Doral, where the Homelink agents were "highly impressed with the quality of our product and the price base of our condominiums and the sense of community," said Oswaldo Betancourt, executive vice president of development and construction for Codina Partners, which is building the mixed-use city center.
One of the great challenges Miami faces in securing Chinese investment is distance, said Anthony Kang, a partner in Arnstein & Lehr's Miami office. Kang is heavily involved with the community's effort to court Chinese businesses and investors. The attorney co-chairs the Greater Miami Chamber of Commerce's Asia task force, whose sole purpose is to shrink the gap between the two regions by pushing for nonstop flights to China and similar initiatives.
"One of the great challenges to Miami with respect to Chinese buyers is that Miami is so far and to some very unfamiliar," Kang said. "By encouraging people to actually come here and visit [projects] seems to me like a pretty smart way to go about it."
Peggy Fucci has traveled to China four times this year. She is CEO of OneWorld Properties, a luxury real estate firm with offices in Miami and Fort Lauderdale.
Her pitch to Asian buyers is, "Miami is the next Hong Kong."
Fucci has been tapped to market Paramount Miami Worldcenter, a 700-foot-tall skyscraper rising in downtown Miami. Half of the condo's 513 units have pre-sold, and more than 15 percent of sales have been to Chinese buyers.
"I really was very surprised," said Fucci, who has worked in Miami's real estate field since 1998.
She said her firm has cultivated its relationship with China for several years, also forming a partnership with Homelink.
Because Paramount has an EB-5 component, it has been heavily marketed to investors overseas. Chinese families have traditionally dominated the investor visa program, which allows investors to secure U.S. visas if they pour at least $500,000 into an American development or business. EB-5 marketing efforts have helped spread the word about the Miami project, which has caught the eye of traditional investors looking for a safer place to park their money away from the volatility back home.
More buyers from China purchased residential real estate in the U.S. than any other country from April 2015 to March 2016, accounting for 14 percent of all international buying activity, according to the National Association of Realtors. The buyers, however, have historically stuck to the country's western and northeast coasts, pocketing houses in San Francisco and luxury condos in Manhattan.
Chinese home buyers accounted for only 2 percent of all foreign purchases made in Miami-Dade and Broward counties in 2015, according to the Miami Association of Realtors.
So far this year, interest in Miami has held steady, Kang said.
Studnicky pointed to a recent catalyst: the Panama Canal expansion. The shipping thoroughfare is now deep enough to accommodate the world's largest vessels, which could mean more business for east coast ports.
"When the Panama Canal got closer to opening, lots of Chinese businessmen started checking out Miami," Studnicky said. "They're making investments in some businesses and in commercial real estate, little by little."
Fucci has recently helped a client buy two condos, one for their children to live in while studying in Miami and a second for rental income. And during the recent tour with ISG, Studnicky said he was peppered with questions about Miami's education arena and its universities, perhaps indicating plans to relocate.
"We are in the beginning of — hopefully — a very long marriage," he said.