Hedge Funds
Wall Street is calling and Miami is responding.
The best value players on Wall Street and internationally are looking to Miami for their investment returns. I currently represent 7 hedge funds: 1 each from Russia, Dubai, Norway and Argentina with the remainder being domestic players. Combined their fund values are over $100 billion. They have collectively dedicated over $250 million to invest into the Miami marketplace.
Some of the deals we are looking at include top hotel/condo players such as Regent and W in Fort Lauderdale as well as Miami-Dade counties. The numbers and returns are interesting. Some of the barriers to pulling the trigger with some of them have been the maintenance costs, but developers are now working with us on that as well.
The condo/hotel route seems to be the one that makes immediate sense to them because it provides a source of income from hotel revenue, which covers their costs and allows them to sit on the property until the market turns. What they are doing is holding their equity position. The exit strategy on this investment is approximately 5 years and most developers are looking to create deals with as low as 10 units, although the average fund is purchasing 20-30 units.
There are those keeping a keen eye on the projects along Biscayne Boulevard as well waiting to see what can be done with entire projects that are in trouble. Those with the deeper pockets are considering doing a hotel or an apartment rental project. However, I would warn that the holding period and gentrification process for this area of town would be closer to a 10 year period, although the entry price would be significantly lower.
If you have the stomach and staying power for this, it could prove very profitable for you.
Warmly,
Michael Valdes
Senior Vice President International Relations
About Michael Valdes
As Senior Vice President of International Relations at SOL Sotheby's International Realty, Michael Valdes focuses on selling "Miami" to the global elite. His extensive travel schedule puts him in direct contact with the world's wealthiest individuals and he caters to their ultra luxury real estate needs.
Valdes is consistently ranked among the top ten brokers in this major metropolis. His client base is very global in scope including high end European clients, focused mostly in Russia and the UK. He focuses his listing efforts on exclusive penthouses throughout Miami Dade County including, the 10,000 square foot, three-level, Philippe Starck designed penthouse at the chic ICON; an 11,000 square foot penthouse with unmatched finishes at the Gables Tower and several ocean front penthouses throughout the beach. He also concentrates his efforts on the private community of Fisher Island and exclusively representing the Russian owned development Aqua by Mirax on Alison Island. Highlights of his record sales include the Fontainbleau II penthouse as well as securing the highest price ever paid for a home on Fisher Island and Alison Island.
A former Director of UBS Swiss Bank Private Banking in San Francisco and later a Vice President of Private Banking at Deutsche Bank in New York, Valdes has controlled over $1 billion in assets under management. Now, being in Miami for only four years, Valdes has exceeded all standards with Miami's social and business elite. Beginning in 2005 and consecutively through 2008, Avenue Magazine included Valdes as one of "Miami's 100 A-List".
Valdes is philanthropically involved being the author of "Babalu" a compiled celebrity cookbook to benefit breast cancer that raised over $100,000. He is also involved in Amigos for Kids; Voices for Children and the MIR Foundation.
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