Miami’s Alternative Investments: Condo-hotels, fine art and start-ups attract big money in the Magic City

Text by Eric Kalis

Once a popular investment vehicle, condo-hotels were stigmatized following last decade’s real estate collapse. But Argentine developers Domus Group and Urbis Real Estate noticed Miami’s tourism market was still white-hot during the recession and remained confident that investors would again covet condo-hotel opportunities at the right time.

Two years after Domus and Urbis – whose principals Pablo Hoberman, Alex Rakover and Flavio Rossato have architectural backgrounds – acquired the last undeveloped parcel of land in Miami Beach’s emerging mid-Beach neighborhood, the appetite for condo-hotel units has returned in a major way. A joint venture between the companies is about to start construction of 6080 Collins Avenue Beach House, a project that blends condo-hotels and art.

Seeking alternatives to traditional opportunities, condo-hotels and art are both increasingly popular with investors in Miami. Additionally, the city’s evolving startup community is attracting significant interest from venture capital players, thanks in part to non-profit organizations like the Knight Foundation. The appetite for atypical investments is creating a more diverse Miami economy.

“Miami has such great bones,” said David McDonald, CEO and co-founder of Lift1428, an innovation design, strategy and communications firm that operated an access and acceleration program called ProjectLIFT Miami at the University of Miami Life Science & Technology Park near Downtown Miami. “It has a ton of companies and capable investors.”

For 6080 Collins, the joint venture linked the 70-unit condo-hotel project with hospitality company Eskape COLLECTION – apartments + hotels, a Rossato-led firm that manages single-family and boutique properties, including 1215 on West and 1818 Meridian House in South Beach. Condo-hotel prices range from $260,000 to $500,000. More than 60 percent of the units are already reserved, and a ground-floor retail lease agreement with Starbucks is being finalized.

Condo-hotel owners at 6080 Collins can use their fully-furnished units for four weeks each year. The units are rented to visitors when not reserved by owners.

The project is appealing to traditional Latin American investors and domestic buyers from the Northeast.

“We are kind of pioneers in the area because we offer an affordable price,” Rossato said. “Investors like the model. They can rent it out when they are not here. It’s free of hassle.”

Domus and Urbis partnered with Wynwood’s Bakehouse Art Complex to hold a contest for local artists to design pieces for the lobby and units at 6080 Collins. The three winners received $2,500 and will have their work recognized in a coffee-table style book.

Art and real estate are synonymous in Miami. But the 6080 Collins collaboration with Bakehouse represents a rare opportunity for local artists to be featured in a brand-new development.

“This shows you can have beautiful pieces of art in a building without needing a Botero sculpture or other internationally recognized piece,” Hoberman said. “You see a lot of high-end buildings turning to expensive paintings for expensive condos. We wanted to be a little more open than that and showcase the talented local artists.”

Art itself is a “great haven for financial investors” in Miami, according to Oscar Ascanio, the owner of Wynwood’s O. Ascanio Gallery. Paintings, sculptures and other works from both living and deceased artists are consistently commanding record-breaking prices.

With one of the art world’s biggest annual events – Art Basel Miami Beach – and recent additions like downtown’s Perez Art Museum Miami, the city is generating interest from both seasoned and amateur art collectors.

“Seasoned collectors are often calculating,” Ascanio said. “They want the most important works of the artists they have been following. In many cases, what moves amateur collectors ranges from a simple appreciation of an artist’s works to the novelty of a new up-and-comer, without much thought to their trajectory or history.”

Beyond the art and real estate worlds, Miami’s focus on entrepreneurship and technology has the attention of venture capitalists and other investors. The Knight Foundation made a multi-million-dollar investment in the Endeavor Miami non-profit entrepreneurship program and funded the incubator LAB Miami. Miami also hosts the annual eMerge Americas technology conference and is home to Wyncode Academy, an innovative coding school.

“We can learn from what other industries and startup communities have taught us to become who we are,” McDonald said. “There is an amazing ecosystem of opportunity here.”