From left: Rodrigo Azpurua, Veronica Cervera Goeseke, Diego Arnaud (Credit: Wikimedia Commons)
In the last two months, Diego Arnaud of Aventura-based DA Luxury Realty has spotted a noticeable increase in sales activity among his clients from Mexico, who account for nearly all of his business.
Several have just purchased multimillion-dollar units at the Ritz-Carlton Residences in Sunny Isles Beach and at Prive at Island Estates in Aventura, the broker-owner said.
And one Mexican investor is under contract to acquire three Walgreens-leased properties for nearly $20 million. The buyer’s reason? “He believes the populist government [in Mexico] will win the election and that will generate volatility,” Arnaud said.
That uncertainty surrounding Mexico’s upcoming presidential election — which is still months away — has contributed to an increase in overall real estate investments into South Florida, industry experts say. More is likely to come.
Any major political race in Latin America typically leads to a flurry of deals in Miami and its neighboring counties, as investors turn to the American markets for more stability, brokers say. But the July presidential election has stirred particular anxiety, and with it more acquisitions in South Florida from those investors.
As of last week, leftist presidential candidate Andres Manuel Lopez Obrador had an eight-point lead over his closest rival, Ricardo Anaya of the conservative National Action party, according to Reuters.
“People with money in Mexico have real money, and they are looking for places they can put it,” said Bruce Bagley, a professor of international studies at the University of Miami. If Lopez Obrador wins, Bagley said more wealthy Mexicans could move their money to the U.S. “South Florida is looking awfully good for a lot of people to hedge their bets with investment properties,” he added.
Widespread corruption and violent crime — there were 25,000 homicides recorded in Mexico last year — have increased under President Enrique Peña Nieto’s six years in office. Presidents are limited to a single term. That has further destabilized the economy, experts say. “There is no hope on the horizon that it will get better soon,” Bagley said.
Mexican buyers on the hunt
Developer Rodrigo Azpurua has seen a significant uptick in interest from Mexican buyers looking to put their capital to work on his projects. Azpurua, CEO of Riviera Point Development Group, said about 60 percent of the calls he’s received over the last month or so have been from Latin America, including 30 percent from Mexico. That’s far above what he would ordinarily handle in the same time frame. Many calls have also come from Colombia, which remains unstable despite a recent ceasefire between the government and rebel forces; and Venezuela, where conditions have become desperate for much of the population.
Riviera Point, which develops office property and hotels in Miami and Orlando using EB-5 funding, is seeking $6 million from 12 investors to build a La Quinta Inn & Suites in Orlando. The firm has signed on more Mexican investors since January, Azpurua said. And out of the 20 investors funding a Radisson RED near Miami International Airport, six are from Mexico, a marked increase from prior years.
Intending to seize on that buying interest, Riviera Point will increase the number of seminars it organizes in Mexico City in March through May, to attract more Mexican investors for its U.S. projects. “Political turmoil is always a motivation in South America to [leave] to the United States,” Azpurua said. “When they’re facing a presidential election, they’re facing a whole world of changes and uncertainty.”
In the U.S., Mexican investors have traditionally done much of their business in Texas, California and Florida, states with substantial Mexican populations. In Florida, Mexico is the 10th biggest foreign investor. It peaked in 2008 and 2009 at 2.4 percent, before falling to 0.5 percent in 2013. It was back up to 2.1 percent last year, according to Florida Realtors.
Last year, Mexican citizens purchased $284 million of South Florida homes, about 4 percent of all foreign investment in the region, according to the Miami Association of Realtors.
“They want to keep having the same lifestyle as living in Mexico with the security of living in the U.S.,” Arnaud said. The cycle of instability has led his buyers to “have one foot out of Mexico in case something happens.”
Still, others don’t believe the coming presidential election will have a lasting impact on investment in the region. Antonio Hanna Grayeb, a longtime real estate broker in Mexico, said there may be a slight increase in sales activity flowing into South Florida, but “investment is the same every election cycle.” Grayeb is also president of FIABCI-Americas, a federation of international real estate associations. Though Mexicans have been turned off by President Trump’s rhetoric, they have for the most part moved on, he said.
Veronica Cervera Goeseke, CEO of Cervera Real Estate, added that the real estate investment shift to Miami has been two decades in the making. Goeseke spoke earlier this month from Mexico, where she was selling the luxury condo tower Elysee Miami in Edgewater.
Miami may have long been considered a safe haven for Mexico’s real estate-buying elite, but what’s happening now is different, Arnaud maintained. If the leftist candidate wins the presidency, Arnaud added, those investors will jump into the market.
“Everyone is trying to pull the trigger,” he said. “If Lopez Obrador gets elected, we will see a lot of buyers from Mexico.”
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