Talking South Florida with Edgardo Defortuna: Why Are Luxury Condo Developers Moving North?
Edgardo Defortuna’s quote, “We sell the dream,” is famous.
In this post-pandemic era, Miami has become a dream for many individuals. Since the value proposition of Miami is already so strong, what can we improve from a developmental point of view?
Below is an interview with Fortune International Group's CEO Edgardo Defortuna on his take regarding why luxury condo developers are moving north.
Who Is Edgardo Defortuna, and What Is His Experience in Miami Real Estate?
Edgardo Defortuna is the President and chief executive officer of Fortune International Group, a full-service real estate firm in Miami and managing partner at Vaster.
Edgardo has been in the real estate industry for more than 30 years. Many recognize him as a driving force in the real estate industry because of his tremendous contribution to internationalizing Miami’s reputation as a global vacation and business hub.
This reputation is held for a good reason; Edgardo listens carefully to his clients, shifting global opinions and trends, his pulse on the hidden gems of the real estate world.
Edgardo acknowledges Miami’s incredible growth, saying, “I believe Mayor Suárez is doing an excellent job in his attempt to address the different issues Miami faces. And while there is no straightforward answer to each problem, Miami is transitioning from being the city of the future to the city of the present. And people want to be here all the time.”
Edgardo’s Take on the Future of Miami Real Estate
Miami has been growing as a city both organically and strategically. Although it is on the right track, there are issues we need to address through combined efforts in both the public and private sectors. According to Mr. Defortuna, we need to address issues about affordability.
It is critical that the city:
- Maintains healthy levels of employment
- Enhances the education system
- Improves the transportation system
For people to afford and continue living in Miami, it needs to provide the services and resources needed to support a big city. That way, Miami can be a major capital of the world, but of course some of these issues are impossible to solve overnight.
In its effort to become the best version of itself, the city of Miami is working hard to address all the pressing issues it faces.
Factors Defining Miami’s Current Development Cycle
Pleasant weather is just one reason people come to Miami, but that’s not all. Tax benefits and the opportunity to experience the unique lifestyle and culture are other reasons people want to be in this sunny city.
In essence, the value proposition of Miami is a unique combination that’s attracting people from other states like New York and California.
How Long Will the Development Cycle Continue?
Predicting development cycles can be challenging, and this cycle is different compared to any cycles experienced in the last 30 years of working in the real estate industry, said Fortune International’s CEO.
The following are factors defining the current real estate development cycle.
1. Investors are establishing economic activity
Today’s buyers are paying more attention to how they can establish economic activity and structure their businesses in Miami because they have a desire to live here. They are not here to park their money and exit the market when they sense a downturn and decide they don’t want to close on their luxury condo units.
2. A more patient capital
Development cycles will always be there in any economy, but this specific one is unique. It has a capital that’s not only patient but also secure, and doesn’t have a need to sell in the event of a dip. This has resulted in a cycle that is a lot more solid.
3. Issues between Russia and Ukraine
It’s impossible to talk about Miami's current real estate development cycle without mentioning what’s happening in Russia and Ukraine. There’s a likelihood the issues will slow down property demand. But, according to Defortuna, prices will likely remain around the same.
4. The US economy
Real estate developers are not only prone to the US economy but also the global economy. For this reason, developers should be mindful of the increasing costs and monitor real estate market trends to prevent supply from outpacing demand. Florida has greater immunity to outside economic woes.
5. Entry barrier
There’s a shortage of developable land in Miami. This is a driving factor behind Miami's soaring condominiums. However, it is also a reason why condo developers are looking north of Miami for land that could be just as valuable.
Factors Influencing Condo Developers Moving North
The real estate market, like all competitive fields, is driven by supply and demand — and the demand for the Sunshine State is higher than ever.
Defortuna said in his most recent interview, “We are listening to the customer, to the world, and what they want, not only what they want from our projects but also to some extent what they want from the Miami lifestyle.”
However, the Miami lifestyle isn’t only limited to Miami. Defortuna goes on to explain the lack of real estate development sites in Miami is the reason developers are exploring land further north.
Defortuna reveals that Fortune International already owns a site in Pompano Beach, where they are already building The Ritz Carlton Residences Pompano Beach. At first, there were concerns about how investing in Pompano Beach real estate would generate interest and attraction. Yet, Fortune International proves that by bringing in quality development partnered with historic brands like The Ritz-Carlton, people will respond positively.
More projects are emerging in the area and neighboring regions like Hillsborough, Fort Lauderdale, and Boca Raton. These areas are ideal sites, and developers are confident that both domestic and international buyers will find these projects appealing. In fact, we’ve seen a revival in demand from the Latin American market, specifically from countries like Peru, Chile, Brazil, Mexico, and Argentina where political shifts are driving demand from those countries to live or invest in South Florida. According to Defortuna, this increased demand from the Latin American market will be a great compliment to the already strong local demand we have.
These sites North of Miami should not only work but also be easy to acquire efficiently. Defortuna believes natural expansions for both the brokerage and development side of Fortune will move to Broward County and beyond.
Real Estate Market Insights for North of Miami
Areas North of Miami are ideal for real estate development, and it’s easy to see why.
In Pompano Beach, for example, home prices are up 18.9 percent compared to last year. Not to mention sellers are selling homes after 40 days.
Defortuna is eyeing Pompano Beach as the next heart of Florida. The motto of this up-and-coming city is “Florida’s Warmest Welcome.” Besides the impressive financial opportunities, it boasts a bustling art, nightlife, and coastal scene.
The essence of these activities is infused in every aspect of The Ritz-Carlton Residences Pompano Beach. This complex is a luxury condo on the beach with access to the Intercoastal area for beach access for sunbathers, boats, and yachts. The beach level features a restaurant bar and grill, a lounge area, food and beverage services, and exciting water sports activities.
After the tragedy of the Champlain Towers collapse presented a new concern in regards to South Florida condo units, buyers are wondering if buying a condo is a wise investment move.
According to Defortuna, they should feel confident in their purchase. There’s little concern from investors of pre-construction and existing inventory on whether these buildings are structurally sound. It’s more of a question of the regulations we will have to adhere to and what will happen to old buildings.
Besides being a safety concern, it’s a financial matter regarding the assessment and preservation of older buildings. This will help address the concerns of buyers purchasing old condominiums aged 30-40 years.
While it will be a balancing act, it will be an issue and an opportunity to sell off older buildings and build new properties. Home inspectors will probably be more strict, cautious, and require additional improvements and assessments in old condo units.
As a result, living in older condos will be less appealing. It’s worth noting new financing guidelines serve a vital role but put affordability at risk. That’s because older homes are affordable options for first-time homeowners.
Vaster’s Take On New Financing Rules
During the 2009 crisis, Fannie Mae ensured condo real estate projects were sound from a financial point of view. Today, their approach comes from a structural and economic perspective to determine if a project is sustainable.
According to Vaster’s Private Lending VP George Fraguio, with new construction, it’s a matter of structuring your budget. He emphasizes the necessity of putting up reserves from the beginning rather than waving them.
Creative Financing Options for Condo Investors
With the new guidelines on property financing, it’s essential to know the type of financing options available for condo buyers. If you’re in the market to purchase a new condo unit, you can rely on private or portfolio loans to close quickly on luxury condos.
Later on, you can refinance by securing a conventional loan. Besides using conventional loans, you can opt for blanket financing. The key is to find a mortgage lender dedicated to making the home buying process straightforward and catering to your specific needs.
Making Smart Moves
Fortune and Vaster’s philosophy is to make home-buying and real estate investing as seamless as possible by providing different financing options. In today’s world, where property buyers want to enjoy unlimited flexibility, accessibility to capital is crucial to ensure people purchase what they want.
To cater to the needs of buyers, Vaster provides private loans, blanket financing, conventional loans, and refinancing. If you’re looking to finance your luxury condo and don’t know where to start, talk to one of our loan specialists to help you close a mortgage easily and quickly.
Vaster is driven by Edgardo DeFortuna’s belief that this sophisticated company is here to “sell the dream.” With help from Vaster, Florida real estate is more attainable than ever.
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