What’s Driving Surge in Trophy Miami Beach Home Sales

Five years ago, a $120 million home sale in Miami Beach would have been unthinkable.

Then came the pandemic, supercharging the market across South Florida. Billionaire hedge fund manager Ken Griffin discovered Miami. Home prices surged. The demographic got younger and wealthier. And then, sales slowed a bit. Sellers were chasing numbers that were no longer realistic.

Rock bottom was last summer.

Yet, the market for waterfront homes — and land — is back, surging in recent months. In October, David and Victoria Beckham paid $72 million for a mansion on North Bay Road, kicking off a flurry of activity on the street. Star, Palm, Hibiscus, the Venetians and Sunset Islands, La Gorce Island, and other pockets of Miami Beach also are on the upswing.

In North Beach, an oceanfront home in Altos del Mar sold for $36 million. A mansion on Palm Island traded for $45 million in February, less than a year after it sold for $40 million.

What’s Driving Surge in Trophy Miami Beach Home Sales — 26 Star Island Drive (Google Maps)

And last month, billionaire developer Vlad Doronin sold his waterfront Star Island estate for $120 million.

All of these deals set new records for their respective neighborhoods. Doronin’s trade set a benchmark for home sales across Miami-Dade County.

“We’re sort of blown away by these numbers, but it’s becoming normal,” said Douglas Elliman agent Oliver Lloyd. Lloyd represented the buyer, online gaming entrepreneur Richard Skelhorn, in the Palm Island sale, and he recently represented the seller in the $22 million sale of a waterfront teardown at 4744 North Bay Road.

The buyers are also big names, and “many of them” are out looking, Lloyd said. Doronin sold his house, a 22,000-square-foot six-bedroom estate with a pool, tennis court and dock, to a company tied to Michael Ferro, who leads the private equity firm Merrick Ventures. Sources told Real Tactics Pro that Ferro is a straw buyer, and that Griffin, a close friend of Ferro’s, is the real purchaser. If true, it would add to Griffin’s massive holdings on Star Island.

After brand mogul Anand Khubani paid $100 million for a 2.4-acre waterfront assemblage on La Gorce Island, he spent another $40 million in December to acquire the recently completed waterfront estate at 5970 North Bay Road. Billionaire Jamie Salter, founder, chairman and CEO of Authentic Brands Group, sold the mansion. It spans 14,520 square feet with six bedrooms, two staff rooms, a home office, movie theater, wine room, game room, wellness center and pool on the second floor.

Jan Koum, the billionaire founder of WhatsApp has also been quietly shopping for a mansion.

“The money in Miami is a little less conservative, just based on the time frame of their wealth,” said spec home developer Todd Michael Glaser, comparing it to the generational wealth of buyers in the competing market of Palm Beach.

Kick-starting momentum

Coldwell Banker’s Danny Hertzberg, part of The Jills Zeder Group, said the Beckhams’ purchase brought attention back to North Bay Road, and started a domino effect. Hertzberg was involved in the $35.5 million sale of billionaire hedge fund manager Dan Loeb’s waterfront home at 6440 North Bay Road, which closed in December.

“Each sale set off a chain reaction,” Hertzberg said. “It was a combination, to be fair, of many properties adjusting their prices.”

Price reductions last year brought buyers back into the fold. Once many of the priciest turnkey homes sold, bidding wars ensued for properties that had previously been sitting on the market, said Corcoran Group agent Julian Johnston. Now that the election has passed, uncertainty that held up deals is gone, brokers say.

“Everyone else started buying because they saw inventory is disappearing,” Johnston said.

Because of this, buyers will ask their agent to find something off-market. This has a couple of advantages for buyers and sellers, agents say.

“Privacy is big. People don’t want photographs of their houses online,” Lloyd said. “They want it shopped very quietly to a select group of people to see if they can take advantage of what’s going on right now.”

Developer James Curnin said he didn’t plan to sell his waterfront La Gorce Island mansion. He and his wife Jennifer spent four years building the property, which they ended up selling in March off-market for $60 million. Brokers were “constantly reaching out,” Curnin previously said. Jordan Karp brought the winning buyer.

Spec developers are back

Mick Duchon, a Corcoran Group agent, said a few properties are asking more than $80 million off-market, and developers are included among prospective buyers. They had, for a while, backed away from the market due to the cost of land and construction.

“There’s a few developers that have successfully built and developed homes [who] continue to show interest in North Bay Road,” Duchon said.

In the past, celebrities like Dwyane Wade, Phil Collins, Ricky Martin, Jennifer Lopez, Matt Damon and Billy Joel owned waterfront homes on North Bay Road. Even though celebrities continue to buy homes, it’s the billionaires and the developers courting them who are now taking over.

Developer Glaser, who publicized his move to Palm Beach about three years ago, is busy again in Miami Beach. Glaser is in contract to acquire the 2.3-acre property at 5940 North Bay Road for $105 million. Developer Sonny Kahn, a founding partner at Miami-based Crescent Heights, and his wife Suzanne are selling the mansion. The sale is expected to close in May.

Glaser and his partners may try to flip the property for about $150 million. But Glaser prefers to redevelop the waterfront lot into a spec mansion that could hit the market for $300 million.

Nelson Gonzalez of Berkshire Hathaway HomeServices EWM Realty, who plans to list the house, said the street is “really the Who’s Who of anyone who has purchased on Miami Beach,” calling it the city’s version of Park Avenue.

Glaser said he hopes to redevelop the property into the “Mona Lisa” of homes.

“People are starting to really get comfortable with that $100 million-plus sale,” he said. “It’s almost like 40 years ago when the $1 million house sold. They oohed and aahed.”