How Ultra-high-end Brands Are Transforming Miami’s Luxury Real Estate
As a man who owns a Porsche and several sports cars such as a Ferrari and Audi, and as a man who is willing to pay nearly $4.2 million to acquire a specific Porsche model, it is safe to say that Juan Pablo Verdiquio has earned his self-appointed title as a “car guy.” Mr. Verdiquio is also an Argentinian real-estate developer and believes that the Porsche brand can help ensure that his condo maintains its value in the Miami market – which is known for its rough ups and downs.
“Buying into a brand that’s been around for 100 years? I’d take that bet any day. It’s like buying into Coca-Cola,” said Mr. Verdiquio.
Porsche, Armani, Fendi, Aston-Martin, and Missoni have loaned their names to luxury condo projects in Miami throughout the past years. Miami’s amazing luxury real-estate market will test the power of these luxury brand to persuade buyers to pay good money for them and re-home them – most likely in a luxury-branded residence.
According to studies and listings by Zillow.com, it was found that the price per square foot commanded by “designer properties” were once indistinguishable from prices for different luxury condos. The inventory of newly constructed residences only continues to rise – with 4,868 new condo units slated for completion this year.
“I tell them before we start that it can do more harm than good,” explained Gil Dezer who is with Dezer Development. “If you don’t get financing if the units come out badly, there are so many things that can happen.”
Major real-estate developers such as the HFZ Capital Group have both halted new projects in Miami over the past few months due to oversupply.
“The premise that the brand adds or helps maintain value becomes challenged when you have a lot of competition entering the market,” said Jonathan Miller, the appraiser who is constantly tracking Miami Sales. “It becomes less black and white.”
Something else to consider is that luxury brands have a lot to gain in partnerships. The brands can discuss with the developers about things such as design choices and functionality – and from this one party can acquire a small percentage of money from sales. Expanding a brand’s influence helps luxury-goods companies attract more shoppers and thus increase revenue.
“These fashion companies have never been under more pressure to realize returns when their core business is besieged by all sorts of other issues,” spoke Pauline Brown (The former North American chairman for LVMH Moët Hennessy Louis Vuitton).
Simon Sproule, marketing officer and chairman of the American division of Aston Martin, refused to reveal how much the company was set to benefit from its project in Miami, but the return on investments has been enough for them to pursue further ventures.
“We’re in discussions with a number of different projects around the world,” Sproule said. “It might look on paper like a stretch for us to be doing real estate but we have expertise in design and knowledge of the luxury market.”
Rendering: Aston Martin Residences