Miami has clearly evolved into a thriving financial center, global gateway, hub for world class arts and culture, destination for education and healthcare, tourism juggernaut, and wellspring of prime waterfront residential real estate ... and yet, until recently, the city’s relationship with the Asian market has been limited. The reasons for this include regional unfamiliarity with Miami, lingering misconceptions of the “Miami Vice” era and the absence of direct flights from South Florida to East Asia.
However, key factors indicate the dawn of a sweeping Asian-influenced era in South Florida. How did we arrive here? And more important, what does it mean for South Florida and Miami’s economic growth?
More Than China
Despite measures by its government to curb capital outflow, China is still dominating the global real estate scene. A look at the numbers shows that investment in Florida real estate by Chinese buyers increased by 1 percent year-over-year from 2015 to 2016, according to the Florida Association of Realtors. “Interest from Chinese buyers and investors continues to grow in South Florida,” Teresa Kinney, president of the MIAMI Association of REALTORS, told me at the close of the three-day Global Luxury Summit in April. “For the first time in 2016, Chinese buyers ranked in the top tier of foreign purchasers in South Florida. Like other foreign investors, they are attracted to the desirability of our location, profitability of investment, safety, climate, clean air, shopping venues, and our institutions of higher learning.”
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Other Asian markets, including Japan, have also begun to take interest in South Florida. The $220 million purchase of the iconic Miami Tower by the U.S. arm of Japanese trade conglomerate Sumitorro Corporation was one of our city’s biggest investment deals this year, as well as a surprising display of optimism from a company that has only a handful of marquee properties stateside. Asian American Pacific Islanders are also becoming more active in the U.S. mortgage market, even as they are already the top minority participant in terms of both loans secured and total dollar volume since 2010.
In April, Chinese President Xi Jinping arrived in Boca Raton to meet with President Donald Trump. His visit to Mar-a-Lago cast a giant spotlight on Florida and is perhaps our state’s biggest curtain call for the Asian market. Jinping’s presence has been known to generate a “golden goose” ripple effect — if he puts his stamp of approval on something, Chinese buyers will typically follow. (For example, within seven months of Jinping’s 2015 visit to Seattle, it became the No. 1 destination for Chinese buyers of U.S. real estate.)
The second major event to take place in April, the Asian Real Estate Association of America (an organization dedicated to promoting sustainable housing in the U.S. for Asian American Pacific Islanders, for which I serve as the Miami chapter president) held its annual Global Luxury Summit in this city. More than 730 people attended this major conference, representing chapters across North America, and over a dozen countries. This was the largest gathering of Asian-American real estate practitioners and business professionals in the history of Miami and gave us an extraordinary platform to showcase our city — especially to many who had never been here, or had little knowledge of how dramatically our city has evolved.
“We chose Miami because, over the last decade or so, this city has absolutely exploded onto the international business and real estate scenes,” said Angie Lee, 2017 AREAA national president, told me at the summit. “The Asian-American population in Miami is beginning to surge, Asian capital is beginning to flood into the market, and our Miami chapter is actually the fastest growing in our entire organization; everything about this city is on the rise.”
Coming Soon: Direct Flights
Direct flights between Miami and the Chinese mainland — a critical piece of the puzzle — are on the horizon. While speaking on a panel at the AREAA conference, Greg Owens from Miami International Airport affirmed that MIA is ready and eager to finalize a new route agreement with Hong Kong-based Cathay Pacific, and expects it to happen within 24 months. (The airline is a subsidiary of China’s Swire Group, whose stakes in South Florida include Brickell Key and Brickell City Centre.)
“We look at direct flights to determine who will be buying in our market, as buyers are more likely to purchase in markets they can access via nonstop travel,” Kinney said. “We are confident that direct flights from China will further generate significant investment in our market.”
Have we reached a “tipping point,” where Miami becomes a primary investment, relocation, and tourism destination for Asians? Time will tell, but the twin impacts of the Jinping visit and the historic AREAA conference cannot be overstated. As my colleague Tom Truong of the AREAA Boston Chapter said after the Global Luxury Summit, “Miami is open for business and geared up for tremendous growth now and in years to come.”
Master Broker Jesse Ottley is the president of Cervera Realty’s development division. He can be reached at email@example.com or 305-502-6651.