TORONTO – June 1, 2010 – Nearly 800 Canadians jammed a hotel ballroom
near the Toronto airport Sunday to hear the gospel of Florida real
High-end Brazilian buyers prefer to be wooed more intimately – perhaps
at a cocktail party or a small private dinner – but they are just as
Lured by rock-bottom prices, international buyers are now flocking to
buy Florida properties. It’s especially true in countries where the
currency is strong against the dollar.
“We’re telling Canadians this is a once-in-a-lifetime opportunity – the
perfect storm,” said Brian Ellis, who heads Toronto-based Florida Home
Finders of Canada. “The prices are just incredible and the Canadian
dollar has been so strong.”
At least three of five buyers in the Greater Downtown Miami condo market
are coming from abroad, estimates Jenny Huertas, international sales
director for Condo Vultures, a real estate advisory and research firm.
The stampede from overseas is “kind of like a foreign subsidy helping us
resolve our real estate problems,” said Peter Zalewski, a Condo
Vultures principal. “This time the assistance isn’t coming from
Washington. It’s coming from Caracas, London, Milan, Bogota.”
The buying frenzy was set off by developers lowering prices on new units
to below what it costs to build in today’s market, Huertas said.
“There were many people on the sidelines watching for the floor. In the
last three or four months there’s the perception that we’re there,” said
developer Edgardo Defortuna, president and chief executive of Fortune
Most of the foreigners are cash buyers like Leroy Jean Francois, who has
snapped up 47 properties since January for the two real estate firms he
works for in France and Switzerland. The plan, he said, is to buy, fix
up if necessary, rent out for the next five years, then sell – for a
The Frenchman has already made a paper profit on a unit he closed on in
January at Marquis Residences, a 67-story luxury tower in downtown Miami
where prices for a one-bedroom apartment start at $375,000. His unit
cost $317 per square foot – “a great price, incredible,” he said.
A recent plunge in the euro – it’s now worth $1.23, down from its high
of more than $1.60 in 2008 – could cool things off a little. To buy a $1
million condo, it now takes around 814,000 euros compared to 625,000
euros under the old exchange rate.
Meantime, prices at Marquis Residences also have strengthened to around
$400 per square foot.
But even the declining euro has barely given Francois pause.
“I think the euro will weaken more. But even if the exchange rate is $1
to 1 euro, South Florida real estate is still a great bargain for us,”
said Francois, who is president of The Bridge, a real estate fund
Luxury condos are once again popular among Latin America buyers who
purchase them as investments but also as a home base. While their
children attend school here, they attend to business interests or escape
strife at home.
But for his Canadian buyers, Ellis scours South Florida for condo units
at around the $150,000 price point. “We’re basically the Wal-Mart. We’re
for the average Joe.”
And these days average Joe Canadian can afford much more. For decades
the U.S. dollar was worth more than the Canadian dollar and buying in
the U.S. was always more expensive for Canadians. But in September 2007,
the Canadian dollar reached parity with the greenback for the first
time in 31 years. It fell back again, but now the Canadian loonie, which
takes its name from the loon pictured on the one-dollar coin, is near
parity at around 95 cents.
So Ellis has been offering his Florida real estate seminars to packed
houses in Ontario and is thinking about taking the show on the road to
Montreal. There was so much interest in the latest seminar that he had
to schedule two sessions for 400 people each this Sunday.
Most of his Canadian buyers are what Ellis calls “end-vestors,” meaning
they plan on renting a unit out for now with an eye toward using it
themselves down the road.
Since Home Finders is licensed as a brokerage only in Canada, it works
with Florida brokers who complete the sales and pay the Canadian firm
referral fees. By year’s end, Ellis said he expects to have facilitated
500 Florida closings.
Though Home Finders is now working with one Sunny Isles Beach property
where condos are listed for up to $350,000, the Sun Vista Gardens in
Tamarac is a more typical offering.
There, buyers can find a one-bedroom for under $75,000 and a two-bedroom
for under $100,000. That same one-bedroom used to cost $190,000,
according to Florida Home Finders’ website.
Ellis said he’s actually having a hard time coming up with enough
Florida properties in the $150,000 range. Of course, he’s picky. He’s
looking for good value, a good location and properties without legal
complications. Most of the Canadians want condos, but Ellis said he has
some requests for single-family homes.
Though buyers from Europe, Latin America – most from Argentina, Brazil,
Colombia, and Venezuela – and Canada predominate in the South Florida
market, a smattering of Chinese investors and African buyers also are
starting to make purchases.
“We recently sold a $7.5 million penthouse at Jade Ocean to a Nigerian
buyer,” said Defortuna. “They were here and they loved it.”
At Fortune’s 237-unit Artech building, Defortuna said 11 condos were
sold to Chinese investors. Units in the building are selling for almost
half the original asking price.
“I think China is still a marginal market,” said Defortuna. “The Chinese
are more focused on the West Coast and New York, but small pockets [of
Chinese buyers] can make a big difference in a building.”
With international offices in Mexico and Argentina, Fortune can tap
directly into those markets, and it frequently holds seminars on the
legal and financial aspects of owning property in the United States. At
one recent event in Buenos Aires there was space for just 200 people, so
Fortune decided to charge a $60 fee. “We still had to close
reservations,” said Defortuna.
One big concern of foreign buyers is what happens to their properties
when they lock up after a vacation, said Defortuna. But Fortune
International’s property management division will take care of things
like paying utilities and condo fees – and even turn over a client’s car
engine once a week so the battery doesn’t die.
A number of local brokerages have country specialists on staff who work
with their counterparts abroad to bring in buyers.
Elite Global Reality, for example, has sales associates who specialize
in the French, Italian and Chilean markets, said Thiago Costa, executive
director and sales associates.
Costa, who is Brazilian, travels frequently to his homeland where local
partners have set up meetings with potential buyers in Sao Paulo, Rio de
Janeiro or Belo Horizonte who are “willing and able to buy.”
He prefers to present one South Florida project at a time to 10 to 20
people at a cocktail party or even a dinner at the home of a potential
With Miami prices so low, the Brazilian currency (the real) strong, the
Brazilian economy robust and real estate prices on the rise in cities
like Sao Paulo, where a luxury property might cost $800 to $1,000 per
square foot, Brazilians like what they see in South Florida.
‘Impossible to lose’
“They feel it’s almost impossible to lose money,” said Costa.
Africa Israel USA, the New York-based developer of the 292-unit Marquis
Residences, also works with the brokerage community in target markets
like Venezuela, the South of France, Mexico and Brazil. Working with
brokers, it has put on events ranging from fashion shows to
invitation-only cocktail parties and dinners, said Lori Odover, the
“It needs to be someone they know, that they have a one-on-one
relationship with,” she said. So that means even an event at a synagogue
or someone’s uncle’s pool party can be a selling opportunity.
Though most international buyers pay cash, there’s an international
financing program at Marquis that has proven popular. Some 57 percent of
Marquis’ foreign buyers have chosen it.
While the program’s 45 percent down payment for a five-year ARM seems
steep, Bob Wuan, managing director of Americore Mortgage/Vacation
Finance, said, “We find international buyers are more than willing to
put 50 percent or more down. They want to put money in U.S. real estate
as a currency hedge or an inflation hedge.”
Meanwhile, Ellis keeps telling Canadians what a great deal Florida is:
“We believe Florida is in for quite a rebound. We just don’t know when.”