New York developers heading to Miami

New York developers head to South Beach.

Miami has long been a hotspot for New Yorkers. Whether it be for leisure, travel or a permanent move to retire, New York natives love South Beach – just tune in when the Knicks visit the Heat to see more blue and orange in the crowd than the home whites of Lebron James and Co.

But the New York-to-Miami migration is even more than that. As Miami's real estate sector has pulled in massive gains, New York-based developers are also making the trip down with dollar signs on their mind.

"There's been a natural synergy between New York and Miami for 100 years," Horacio LeDon, Douglas Elliman's president of development marketing for Florida and senior managing director of development marketing for New York, told Miami Today. "It's ebbed and flowed. But now you have a perfect storm of dynamics and factors occurring that essentially bring New Yorkers to Miami in some sort of critical mass. Prices justify it, but there are also the trends. Developers want to be in Miami. They want to enjoy the lifestyle. And now the numbers justify it across the board."

LeDon knows better than most. He was was born in Miami but worked roughly two decades in New York realty.

With properties such as Miami's Faena House earning up to $50 million for high-end condominiums, Miami Today reported observers believe the metrics work to justify the costs for developers to come down and get in the market of Miami's expensive real estate.

"At $2,000 a square foot it's a home run," LeDon said. "Those are New York prices."

Lower development costs

The cost of living and building expenses are still higher in New York, so lower development costs, double-digit price increases on Miami property and a market with sizzling demand has brought about such real estate firms as Property Markets Group, a company with more than 1.5 million square feet in five local projects.

"It probably comes down to money," said CEO Kevin Maloney. "When you have low prices and growing demand in real estate, you want to enter the market."

Property Markets Group recently notched a $30 million land acquisition in nearby Sunny Isles Beach, Fla. 

The rush in demand has driven the area's foreclosure rates way down. The foreclosure rate for the Miami area dropped to 9.9 percent for September, according to CoreLogic, signaling the first time since January 2009 that the rate dropped below 10 percent.

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