The real estate market in Miami is hot, and the Hispanic-owned Newgard Development Group is helping Latin American investors capitalize on it.
The South Florida city, which was rocked by the real estate downturn several years ago, has seen its fortunes rise thanks to investors. Prices are up more than 12 percent the past year but are still far from the peak in 2008.
Investors seeking the safety of investing in the U.S. as well as the distinctive features of Miami are the reason for the real-estate boom by Latin American investors, said Harvey Hernandez, chairman and managing partner of Newgard Development Group. Miami's diversity, lifestyle and opportunity give it great value to buyers from Venezuela, Argentina and Brazil, he said.
"The trends are (Latin Americans) want to buy projects that are very urban, that are very innovative, that they are very well designed, that they represent value for them," Mr. Hernandez said. "The other trend that I see is that South Americans are coming to Miami more than ever before."
The boom of Latin American investors has fueled substantial growth for Newgard Development Group. Seeing considerable growth as a result of the purchasing power from Latin American, Newgard uses advertising, direct marketing and building projects that cater to the wants of consumers from Latin America, which has put it at the forefront of the Miami real estate market.
One strategy that has allowed Newgard Development to thrive in the Hispanic market has been its financing approach to its condominiums such as the Brickell House in Miami's financial district, expected to open in 2014. Following a model that is popular in Latin America, Newgard doesn't start construction on a project until 75 percent of the units are sold. Hernandez says it improves the project's financial stability and reduces foreclosures.
"That is the way they are built over in (Latin America)," Mr. Hernandez said. "So it attracted a lot of Latin Americans and a lot of Europeans because they are used to it, they are accustomed to it."
Centro, Newgard's most recent project in downtown Miami has already sold more than half of its 352 units since it first began selling condos in April. Taking advantage of the demand for urban living, the 37-story high-rise building offers residents the comfort of being walking distance away from Miami's restaurants, bars and entertainment hot spots.
A new report conducted by Focus Real Estate Advisors illustrates how demand in downtown Miami has soared. According to the Greater Downtown Miami Real Estate Market Annual Summary Report, the average unit sales price in the first quarter of 2013 was up 21 percent to $425,498 from the 2010 average of $351,078.
More than 97 percent of the 23,000 condominium units constructed over the past decade are occupied with renters or owners, the report stated. Just four years prior the figure was at 50 percent. Currently the unsold condominium inventory stands at 1,500 units.
"Centro has the best location in downtown Miami, its steps away from the best entertainment, the best shopping, the best waterfront," Mr. Hernandez said. "And we wanted to create a project that was very, very urban, that it wasn't only a residential project, but that it was a lifestyle."
Built in proximity of the city's mass transit system, the 0.42-acre site also offers amenities that include a ground floor restaurant and a designated car2go smart car Parkspot hub. When conceptualizing Centro, Mr. Hernandez imagined a residential project that would offer a unique location right in the heart of the city, which has led to the loft-style building selling 180 units in approximately 60 days.
With more demand for urban living in South Florida, Newgard, who has been in the market for 15 years, credits the company's passion for its ability to attract consumers from Latin America and all segments of the market.
"We are very passionate, we are very forward-thinking developers and we take a lot of pride in everything we do," he said. "And we strive in quality and execution so that has been our secret throughout the years."
Check out the The Billion Dollar Club -- the HispanicBusiness 500 now lists five billion-dollar-plus companies on its index of the top-earning U.S. Hispanic enterprises.
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