When a plane lands in Miami in the late afternoon – gliding smoothly over blue-green water and powder-white sand, a row of high-rises standing between the traveller and a sun setting vividly beyond the miasma of the Everglades – the city justifies its reputation as being one of the most picturesque in the world.
Miami is a relatively new city – incorporated only in 1896 – and one that has seen its share of tumult since then. Its growth was spurred at various time through its enthusiastic embrace of the illicit markets for bootleg liquor during the Prohibition era and cocaine during the 1970s and 1980s (at the height of its cocaine wars during 1980-81, Miami had the highest recorded murder rate in the world). Often referred to as 'the gateway to the Americas', with a vibrant pan-Latin and pan-Caribbean culture, it is a city that has often marginalised its African-American community, and saw four separate race riots during the 1980s.
Add to the mix the Elián González saga – a US-Cuban dispute over the parental custody and immigration status of a five-year-old boy – and the chaotic presidential election that controversially brought George W Bush to power, and the rest of the US often looks at Miami with a bemused interest that reflects its slogan of 'the Magic City'.
A Latin American centre
Hammered by the 2008 global financial collapse, Miami (in reality a sprawling collection of quasi-autonomous 'cities' that form greater Miami-Dade County) has clawed its way back from the abyss and into the sights of foreign investors once more. As always in this sun-splashed metropolis, part paradise and part purgatory, real estate has led the way.
“As the US began its recovery, probably around the middle to the end of 2010, a lot of money that was searching for opportunities looked at the places that got hit the worst by the financial crisis, and certainly Miami was one of them,” says Alex D Zylberglait, a senior vice-president for investments at commercial real estate brokerage firm Marcus & Millichap. “The fundamentals were in place for Miami – weather, land restraints, a diversified economy, a gateway city – and people are investing here for the long haul.”
Latin American countries facing political turbulence and economic difficulties, such as Argentina, Venezuela and most recently Brazil, have seen their moneyed classes relocating to more stable shores, and bringing their cash with them. As a result, Miami’s Latin American population is now far more heterogeneous and less monolithically Cuban than it was in the past.
“Generally, the foreign investor is willing to pay more and expect less, and they are very patient,” says Alex Rey, the finance committee chair for the Greater Miami Chamber of Commerce and the executive vice-president of Merrick Capital Partners.
As well as being a hot destination for Latin Americans, Miami is attracting the attention of investors from further afield.
“Originally, the activity was concentrated around residential investment, but with the Miami brand becoming such an international attraction, it has brought investors from all over the world,” says Mr Rey. ”We continue to have Latin American and European investors, and now we have the Chinese.”
Indeed, the Chinese presence in Miami has reached a new level of intensity. Hong Kong’s Swire Properties is developing the $1.05bn mixed-use Brickell City Centre in the neighbourhood of the same name. In October, China City Construction, a state-owned builder, along with American Da Tang Group, paid $38.5m for a 3965-square-metre site on Miami’s North Beach. It was the duo’s second major purchase in Miami in a year, following their buying up of a sprawling site in the Brickell area for $74.8m.
“Since the global financial crisis, as Miami became more well known to prospective Chinese buyers, investors, families and corporations, the number of different Chinese buyers of South Florida real estate has increased,” says Anthony Kang, an attorney with Arnstein & Lehr, a law firm that deals extensively with Chinese investors. “As the real estate market has recovered, some sophisticated Chinese-American investors have made significant bets in commercial real estate and profited handsomely.”
The Greater Miami Chamber of Commerce has already conducted a trade mission to China and has another planned for January 2016. It has also created a China taskforce and is exploring the possibility of putting in place a China trade commissioner or consulate in Miami, as well as starting a non-stop flight service from the city's airport.
Miami’s financial industry has also seen renewed activity despite more aggressive enforcement of the US's Bank Secrecy Act, a 1970 measure known as the BSA and which seeks to detect and prevent money laundering through a variety of requirements. At the advent of the multibillion-dollar cocaine industry, Miami played such a pivotal role in both transhipment and money laundering that in 1979, Miami’s branch of the Federal Reserve reported a cash surplus of $5bn, more than all the other state Federal Reserves combined.
“Even with the regulatory pressures, some financial centres have remained here,” says Guillermo Diaz-Rousselot, the president and CEO of Continental National Bank and the vice-chairman of the MDCC’s banking and finance committee. “Being the gateway to South and Central America, it is desirable to have some type of agency [in Miami].” Recently, Chile’s Banco de Credito e Inversiones, the country's third largest privately owned bank, completed the acquisition of Miami-based City National Bank for a reported $946.9m.
Though some foresee a slowdown in south Florida’s real estate in the coming months, others, such as Mr Zylberglait, are confident that Miami’s economy “will transcend any cyclical fluctuations”.
Perhaps the city’s greatest challenge will come through the effects of climate change, which already sees areas of the popular South Beach flooded several times a year and which, if current predictions prove correct, will see areas such as Miami Beach, Key Biscayne and Virginia Key increasingly affected in coming years. For now, though, the city’s frenetic investment climate churns on.