While a focus on international buyers is nothing new for Miami developers, one company is taking the marketing strategy to an extreme.
"The local buyer does not exist," said Martin Melo, a principal of the family-run Melo Group, one of the most prolific developers in Miami.
Mr. Melo said 100 percent of buyers in the company's new tower projects are from outside the United States. The company focuses its marketing strategy exclusively on international buyers, primarily from Venezuela, Argentina, and Brazil, although there has been a recent influx from Europe.
"The buyer is foreigner," Martin Melo told WPC News in a recent interview. "They see the United States as a safe place to deposit their money and they are used to [a system] in their country, at least in South America, to have to buy it with cash."
Martin was joined in the interview by his brother, Carlos, who also helps run the Melo Group, the company founded by their father, Jose Luis Melo. Before arriving in Miami in 2001, Jose Luis Melo built 5,000 residential units in Argentina. Since then the Melo Group has built more than 2,000 units in Miami, mostly rental apartments.
The company is best known as a pioneer in building residential towers in East Edgewater, the up and coming neighborhood north of downtown Miami on Biscayne Bay. In 2011, the group's 96-unit condo tower in Edgewater, 23 Biscayne Bay, was among the first condo projects completed post-recession.
"When we arrived 12 years ago this [Edgewater] was an area that had homeless on the streets," Martin Melo said. "We saw the potential it had and began to accumulate land and develop here."
In September the company opened Skyview, a 32-story rental building in Edgewater with 207 of its 258 units rented. The next Melo Group project, the 165-unit Bay House, will be the group's 10th building in Edgewater and it marks the company's entry into luxury condos.
The new project will feature five units per floor with private elevators, and amenities including a sky pool deck overlooking Biscayne Bay, and concierge services. Prices for the two- and three-bedroom condos will range from $490,000 to more than $2 million for penthouses.
The tower, due to open in 2014, is more than 50 percent sold and all the units were sold to foreign buyers, Martin Melo told WPC News. The international buyers in Melo projects are purchasing in cash, which is not unusual in Miami. All cash-deals represented 68 percent of all Miami home purchases in August, the highest in the country, according to a RealtyTrac report.
Overall, Miami apartment are still cheaper compared to foreign markets, they said. Prices for units in Melo Group towers average about $400 per square foot, the brothers said.
"Comparing to the price in Buenos Aires, Paris, Milan or in any major city in the world, they still remain higher than in Miami," Martin Melo said.
With the emphasis on foreign markets, the company focuses its marketing strategy on brokers working with international buyers, rather than broad promotional campaigns.
"When customers are from outside [of the country], all the publicity that is generated here, they do not see, they only receive what the broker offers," Carlos Melo said.
Looking forward, the Melos plan to stay in Miami. When asked by WPC News if future plans include building in Latin America or other U.S. cities, the brothers quickly answered "no."
Miami is still growing, they said. Last March the Melos paid $9.5 million for a piece of land in front of the Adrienne Arsht Center in Downtown where the group plans to build 497 rental units in a yet-to-be announced building, Martin Melo said. The company has also purchased land for 2,000 more units in Edgewater, he said.