Repeating a strategy from the last time Miami’s luxury home market cooled down, the Related Group — South Florida’s biggest condo builder — is announcing plans for two new residential projects in Mexico.
Los Angeles-based hotel company sbe will partner on the two projects on Mexico’s Pacific and Caribbean coasts, which will operate under the SLS brand. (Related and sbe have collaborated on two SLS properties in Miami.)
One project, SLS Zihuatanejo, in the Mexican state of Guerrero, will offer 62 singe-family lots, in addition to a 40-room boutique hotel managed by sbe. The other, SLS Cancún, will have an initial phase of 120 condos and 67 hotel rooms, all housed in a gated community. Mexican developers Inmobilia and U-Calli are partners on the Cancún venture.
“The potential in Mexico is tremendous,” Jorge Pérez, chairman of the Related Group, said in a statement. “Continued trade with its northern neighbors and record-breaking tourism has led to robust growth in the Mexican economy which has in turn empowered the middle class and made it a more desirable destination for American buyers. Mexico is a country on the cusp of a major boom and Related will be ready when it begins.”
While many economies in Latin America are struggling with recession, during the third quarter Mexico grew at its fastest rate since 2014. That growth could be threatened if President-elect Donald Trump decides to scrap the North American Free Trade Agreement.
Italian architect Piero Lissoni will design both projects, which will be developed in phases and completed in 2020. The developers are targeting Mexican and American buyers.
“In Cancun, these units are $350 per square foot,” said Carlos Rosso, head of Related’s condo division. “In the U.S., for properties on the sand, the price would be 10 times that much, plus you have a golf course, marina and private beach, and all the amenities of a hotel.”
South Florida’s condo market has had a rough year thanks to a grueling election season and a strong dollar. Developers including Related have delayed, suspended or canceled new projects in the absence of foreign buyers. Sales for existing condos in Miami-Dade County fell 30 percent year-over-year in October.
When the housing market crashed in 2008, many developers bought land and built projects in more stable markets abroad, hoping to weather the downturn until the United States recovered.
“We’ve always been doing projects in Latin America and most of our buyers are in Latin America,” Rosso said. “When things start slowing down here, we do more projects in Latin America.”
In 2010, Related delivered a condo project in Mexico called Icon Vallarta. The company has also worked in Argentina, Brazil, Panama, Uruguay, India and the Bahamas.