by Mike Vogel
Updated 12 months ago
Foreign buyers and investors in Florida real estate have had as rough a time as the homegrown variety in the past three years. For proof, witness Miami’s Everglades on the Bay, an 849-unit condo project built by Mexico’s prominent Cababie family that’s in bankruptcy court. But anecdotal evidence indicates foreign interest may be strengthening.
Foreign nationals, says Foley & Lardner partner Roy Barquet, still want to buy real estate in Florida. [Photo: Daniel Portnoy]
Florida has led the nation for years in purchases of homes by foreign buyers — one in four of the national total. According to a July survey by the National Association of Realtors of its members, foreign buyers accounted for 32% of home sales in Florida in the prior 12 months, up from 29% in 2008.
Credit opportunism. One in five of the members surveyed said the recession boosted buyer interest. A weak dollar makes already discounted real estate even more of a bargain. Cold cash helps too. Nationally, 93% of home buyers take out a mortgage. Foreign buyers, in contrast, used a mortgage only 32% of the time in Florida, according to the association survey. That’s in sharp contrast to the survey in 2007, when 62% borrowed to buy. Savvy foreign buyers use their ability to pay cash as a negotiating tool, says Roy Barquet, a partner at Foley & Lardner in Miami and chair of its immigration practice. They tell developers in Miami’s overbuilt condo market, "I don’t need a mortgage. I don’t need to prequalify. I don’t need to talk to your Freddie Mac person. I’m ready to wire the money right now."
Foreign Buyers of U.S. Real Estate
|Top States’ Share of Foreign Buyers||?|
|Florida’s Share of Foreign Buyers
|International Buyers in Florida by Region
|Western Europe (excluding U.K.)
|Market Share of Foreign Buyers in Florida
|Tampa-St. Petersburg- Clearwater
|Cape Coral-Fort Myers
|All other areas in Florida||32|
|Source: National Association of Realtors|
In southeast Florida, Argentina displaced the United Kingdom in the top three countries of origin for buyers while Mexico displaced Ireland in Orlando. The percentage of buyers from Latin America increased in Miami, Orlando, Bradenton-Sarasota and Tampa Bay.
Foreign buyers are even making a dent in Miami’s condo inventory. Barquet points to recent news reports about several Brickell condo buildings selling out or nearly selling out as primarily foreign nationals paying cash snatch up units on the heels of drastic price cuts by developers.
There’s good news for a real estate
industry increasingly dependent on foreign demand. Barquet, whose immigration clients are at the high end in terms of wealth, education and investment potential, reports no drop in interest in living in the United States and its desirability as place of refuge economically, socially and politically.
Through the internet, Jerry Pierce has built a sizable restaurant equipment exporting business from Orlando. But like any good salesman, success comes down to personal contact for him — and storytelling. Just get him going about his days in the printing industry when he landed the job printing 6.5 million Farrah Fawcett posters that became the ubiquitous wall decor in teen boy bedrooms. "There’s a lot of people who have opportunity in front of them and don’t seize it," Pierce says.
Jerry E. Pierce
Restaurant Equipment World / Chairman / Orlando [Photo: Sándor Fizli]
"To me, it’s as much a technology business as an equipment business," says Mario Fidanzi, director of Stetson University’s Family Enterprise Center. (Pierce chairs the center advisory board.) "It’s a story of continuous reinvention."
Booming international sales are offsetting a sluggish domestic market.
Pierce’s son, Brad, runs the company day to day. One daughter, Patty Nuzzo, is a vice president while another, Barbie Boyd, does marketing part time. Pierce himself spends more time volunteering with the National Federation of Independent Businesses, which named him "Small Business Champion of the Year" in 2006. His civic work includes past-president of a veteran’s group — he was a 1st lieutenant in Korea — that successfully pushed for a new Veterans Administration hospital for Orlando and chairman of another group that wants to build a Veterans Memorial Park.
He’s still active at Restaurant Equipment World, however, and still believes in sales truisms and people-to-people contact. His company depends on the internet, but all phones are answered by a person. "It’s high tech and high touch combined together," he says. "It’s also a lot of personal selling."
? Small Business
An Advocate Waits on a Lost Year to End
Neal Asbury, president of Greenfield World Trade and the U.S. Small Business Administration’s National Champion Exporter of the Year in 2008, has 80 employees, a business that sells in 130 countries, $50 million in revenue and offices in Dubai and Hong Kong along with his base in Weston. One other thing he has is a pulpit — a weekly radio show broadcast in seven cities nationally in which he advocates for free and fair trade and small businesses.
Greenfield World Trade President / Weston
The Neal Asbury Show Radio host
» Coming up: Asbury will have a book, “Conscientious Equity,” out next year that he says will illuminate trade inequities and describe how the world can work together to cure social ills. [Photo: Eileen Escarda]
Asbury, 52, started in international trade in lower Manhattan just out of college, before moving to Singapore to be a sales manager at a trading firm there. He spent 25 years in Singapore, Hong Kong and Dubai before coming to Florida in 2000. First hand, he says, he witnessed the artificial barriers put in the way of American products. "It really tore me up," Asbury says. "I know Americans can compete. We’re just not given the opportunity to compete. The world trading system is corrupt and skewed against us."
That said, Asbury describes himself as a "fair and free trader." He supports NAFTA and notes the Clinton administration’s promotion of American exports as proof that free trade isn’t a partisan issue — just after he bashes the Obama administration as the "most anti-trade, uninspired administration since World War II."
“The world trading system is corrupt and skewed against us.”
Asbury says his firm is the largest exporter of commercial food service equipment in North America, with manufacturing in Harrisburg, Pa., and Fort Pierce. For the first nine months of 2008, foreign trade was on a tear and propped up Florida’s economy. Then the credit crisis hit, locking up trade financing. The recession migrated to the developing world, hitting Mexico, which accounts for half of Asbury’s Latin America market, particularly hard. Early 2009, "was really dismal, about the worst I’ve seen in my 25-year career in international trade. The recovery of Mexico ... hasn’t occurred," Asbury says.
Beyond that, he says, business seems to be improving. Says Asbury, "2009 will be the lost year. I think we’re all hoping 2009 goes away."
Optimistic about Financing
Manny Mencia, the international trade guru for the state’s economic development group, Enterprise Florida, isn’t given to moaning about the tough times. So you have to read it as an understatement when he says trade financing of late has been "a bit of a challenge."
That challenge means a big headache for Florida exporters, who for the most part are small and medium-sized companies, exactly the kind that rely on trade financing. Last fall, lenders built liquidity in the credit crisis in part by slashing trade lending. That helped toss trade into the recession basket.
“Despite the fact we’re a small company-driven export economy ... we have fared relatively well.” — Manny Mencia [Photo: Eileen Escarda]
||July ’02 YTD||July ’09 YTD|
||$56.9 billion||$39.8 billion|
Lenders eventually will migrate to other companies and other sectors in search of opportunity. “That’s going to happen faster than people think.”
— Pierre Dulin
Miami Trade — Market Share?
Top 10 Countries
|July 09 YTD (billions)||Market Share||7-Year Share Change|
|Market Share of Top 10||56%||?|
? Trading partners
Ken Roberts, president of WorldCity, a Miami media company that tracks global trade, sees the following trends in Florida customs data:
Brazilian trade is down because fewer Brazilian-made Embraer jets have been coming into Fort Lauderdale, where Embraer has its U.S. headquarters.
As oil prices fell, Venezuela had less money to spend buying tractors, cell phones and computers so its trade out of Miami is down.
With so many people trading their gold for cash, trade with Switzerland is up as scrap precious metals leave here for there.
Jacksonville/Tampa Trade —
|July 09 YTD (millions)||Market Share||7-Year Share Change|
|Market Share of Top 10||53%||?|
Copper is off at Panama City, which is the nation’s leading copper port.
Motor vehicles and fuel are off in Jacksonville.
Miami, meanwhile, the nation’s only customs district to have a trade surplus for 15 straight years, is "holding up relatively well, under the circumstances." Its strength in exports and a less severe recession in Latin America kept exporting at a "moderate clip." In total dollar value of trade, Miami, through July, is having its worst year since 2006 while Jacksonville/Tampa hasn’t been this low since 2004. Miami is off 15% through July while Jacksonville/Tampa is down 46%. With Jacksonville/Tampa down and Miami less so, Miami’s share of Florida trade is at a high — 77% of Florida’s $56.9 billion total, he adds.