South Florida Real Estate: Luxurious Developments Becoming a Trend, Can Locals Afford It?

With the unveiling of the Armani/Casa project in Sunny Isles Beach, Florida last Thursday, Jan. 21, the Sunshine State has definitely entered the trend of luxury real estate. As reported, the 56-story tower features a glass tower and a garden spanning 3.1 acres overlooking a 300-foot oceanfront. The $1 billion project offers 308 lavishly designed residence units, with prices ranging from $2 million to $15 million.

Armani/Casa is not the only branded real estate development coming to South Florida. Mansion Global reports that the Italian fashion house Fendi has partnered with Argentine Chateau Group to develop Chatea Residences in Surfside, Miami. It is said to be a boutique 12-story building along 300 feet of oceanfront beach.

Another luxury project is headed by Dezer and German sports car manufacturer, Porsche, with their on-going construction of the Porsche Design Tower in the same area as the Armani/Casa.

Costing over $560 million, the Porsche building is said to highlight a glass car elevator which will allow residents to park their cars in "sky garages" right next to their units. The project is slated to be completed in June.

Real estate consultancy Knight Frank describes this trend as a "reflection of luxury and prestige associated with the brand, helping developers to stand out in a competitive market."

However, Miami Herald reported that the allure of these extravagant real estate developments coincide with a difficult time in the financial market. Can people afford these multi-million dollar condo units to sustain this real estate trend?

"Unfortunately for [Dezer and Armani], forces they can't control are likely to have an impact. The market's out of their hands right now," said Peter Zalewski, a local condo market analyst. Zalewski added that due to the Latin American slowdown, slumping oil prices and the volatility of the stock market, these luxury brands will have a tough time entering South Florida's market.

However, Armani developer Jorge Perez insists that their ultra-chic investments will turn out to be equally as profitable.

"Of course it makes a difference when the dollar is strong," Perez said. "But for this type of building, the buyers that we have are very wealthy. They already have their money in dollars and out of [their home countries]. They're not trying to figure out how to get their money out."

He added that out of the 308 units in Armani, 155 units have already been reserved, roughly 55 percent of the total project.

Meanwhile, Porsche developer Dezer also remains undeterred. They have two more luxury projects with "super high end brands" to bring to South Florida in the near future.

"We definitely have the land, the location," he said. "The market here is great. South Florida is not a local market; it is very global."