A Top Miami Broker on the Booming Market for Ultra-Luxury Homes

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1:26Hello and welcome to another episode of the Odd Lots podcast. I'm Joe Weisenthal. And I'm Tracy Alloway. Tracy, do you remember our episode with Hiten Samtani about how there's this separate world of real estate for the ultra rich in cities like Dubai and New York City and Los Angeles, Aspen, Miami, that's just totally disconnected from like normal real estate markets? Yes, I do. It was an eye-opening episode, not least because of all the discussion of the branded apartment buildings and luxury condos and things. And I still, I'm not entirely sure I personally would want to live in a Mercedes-Benz apartment building or whatever, but it's definitely a thing that's been happening.

2:10You wouldn't want to live on the Porsche Tower in Sunny Isles or the Armani Casa Tower in Sunny Island. I'm trying to keep an open mind and I realize everyone has very different tastes, but I am not a fan of modernism. No matter how hard I try, I don't get the whole white rooms, glass boxes thing, which seems to be predominantly what the luxury market is, at least in certain cities. It is a lot of glass. All right. So don't move to the Aston Martin residencies in downtown Miami near Biscayne Bay. So avoid that. I was this close to buying the$10 million apartment in Miami. But now that you've said that, I won't.

2:57No, you're absolutely right. There seems to be this entirely different luxury real estate market in the US, which is still going pretty strong, even in the environment of higher interest rates. And you see these numbers that are thrown around. And it's so hard for me to conceptualize this, but I was looking up, there was a$70 million mansion in Miami Beach that sold recently. And then all these$25 million dollar mansions and even like$10 million condos. It's hard for me to wrap my mind around those numbers. I think I saw that Ken Griffin, the Citadel chief, this is a big story, is that Citadel has moved a bunch of its operations to Miami from Chicago.

3:42I think Ken Griffin is spending like$100 million on like a dual mansion property or something like that. And then there are all these stories and Bloomberg reports on them a lot about these New York City finance people that are moving to Miami and maybe spending 51 % of the year there for various reasons. But I really want to get more color on what's this like? Why are people wanting to buy into the Aston Martin building? What's going on in Miami? Where is all this money coming from besides Citadel? How long it can last? I just want to get a better feel for what this market, we know that the market exists, and now I want to get a better feel for what it actually looks like and how it all works and how people find these places and all that.

4:23Yes. So there are two things that I'm really interested in. So one is the momentum factor and the idea that once you get money pouring into a specific place, it kind of can attract more money. So that's what we were talking about with Hiten Saptani, this idea that rich people basically can like force prices up even further by buying up all this property. And they compete with each other. Yeah. And it becomes kind of like the self-fulfilling prophecy or self-reinforcing cycle rather. And then the second thing I'm interested in is how much this market, if at all, differs from the normal real estate market.

5:02Are there certain aspects of luxury real estate that operate differently to say, I don't know, like a$300 ,000 home being sold in like the Midwest or wherever? Right. Like it doesn't seem like it's the same as just sort of like going on Zillow or something. and booking some local broker. Yeah, do millionaires surf Zillow as much as I do and just fantasize about new houses? Is that how they find them? I don't know. I want to find that out too. Well, I'm really excited because today we really do have the perfect guest to bring us into the world of a high-end luxury Miami real estate. We're going to be speaking with Dina Golden-Tayer.

5:44She's the number one agent at the major real estate brokerage, Douglas Elliman. She's been operating out of the Miami market for 19 years, and she's involved in lots of these deals. So we're going to learn all about this. Dina, thank you so much for coming on Oddlot. Thank you guys for having me. What an amazing intro. Oh, thank you very much. That's always the best way to start that you endorse the intro. Let's just start. I mentioned Citadel, and that's a big story, but where is the money coming from? When you talk to buyers, What are the source, the different types of buyers who are coming in and splashing millions or tens of millions of dollars on Miami real estate?

6:25They are a bit of a homogeneous group. They tend to be, you know, in the 40 to 50 age group. They tend to have children that are still in school and they tend to be from North America. How do they find you? This is something I always wonder. I kind of alluded to this earlier, but for me, when I'm fantasizing about buying property, I go on Zillow and I look at a bunch of different - Zillow porn, we call that. Yeah, exactly. And it's fun and I probably spend too much time doing it. But is it different if you're a multimillionaire or a billionaire? Are you finding real estate in a different way? I think they're probably still as obsessed with Zillow and online sites as you are, but they often have friends already in the marketplace who have bought here, and they'll ask for a referral.

7:16And then if they go online and see, oh, this is the agent my friend recommended, oh, she seems to have all the top listings, it's just a reaffirmation. You mentioned the sort of demographics, but what are the sources of money? So Citadel versus New York versus crypto. Like when it comes to like how these people made their money, What are the different categories you see? Definitely the technology sector. And that oftentimes applies to buyers coming from the West Coast. And somehow it's all tied to the financial markets, right? Private equity firms, hedge funds. You know, I don't even ask people what they do because it always tends to be in that category.

7:58Or there'll be, I guess, let's call it a fourth category of someone who has sold their business for hundreds of millions of dollars and are ready to redomitile in a sunnier, happier place. Sunny or happier place. Okay, talk to us more about that. If I have a lot of money because I just sold my business, what is the attraction of Florida's? And I understand there's sun, there's beach. Maybe now you would even consider it like excellent summer weather. And I say that because we're recording on a day when I think New York is hotter and muggier than it actually is in Miami right now. So by comparison, Miami looks great.

8:35But what is attracting people to this specific place? It's definitely the same things that it has always been, just at a higher volume, right? It's always been, you know, tax advantages and the fact that Florida doesn't have a state income tax. That's nothing new. There's incredible homestead advantages and the weather has always been good, right? We've always been a sunny place with beaches and nightlife. What's changed in Miami is because it has attracted a higher profile clientele that now the arts have come up. The restaurant scene has come up. There's a lot more activities for children. Like it's just become an all around metropolitan center instead of a place to just come for a few days to party and then get, you know, the heck out of Dodge.

9:23Right. I think I've mentioned it on the podcast. My family and I, when I was a young kid, we would go every year to North Miami Beach, like the Collins Avenue. I think, no, we would go to Sunny Isles. It was fun as a kid, but it definitely, the area did not seem party the way that it does. Now, granted, I was up in Sunny Isles, which was probably a little bit more quiet, but I know that strip has changed dramatically over the last 30 or 40 years. What do they want? Okay, let's say I sell my company. I have$100 million. I want to have a place in Miami because it's fun and warm and all that. What are like table stakes for what a developer needs to offer me in terms of design, in terms of amenities that they would need to offer for me to consider their building?

10:17So that's a really, you know, that's a very interesting proposition because the developers are constantly trying to outdo one another and their previous towers, right? So Miami already has the best high rises in the country. We by far have the most, you know, glass skyscrapers that are full of the best amenities. So it's really hard to win your business. So the developers are constantly looking to elevate the interiors, choosing a star architect, offering new lifestyle amenities like paddle or pickle. That seems to be all the rage across the country. So you're seeing that pop up at several new developments across town.

10:54They have to keep raising their ceiling heights because people always prefer higher ceilings. It's really hard to outdo what's already been built because we have such incredible buildings already. So they have to come up with more creative ways to do so. What's the most impressive property that you've seen? You know, we talked about your 19-year career at Douglas Element. I'm sure you've seen some amazing houses and apartments in that time. It's so hard because every year a new apartment or a new house is built that is just so much shinier and prettier that I've previously sold. So I think I've walked into the best and then 12 months later, it's just, you know, there's something so much better.

11:31But what does that look like when you say that? OK, it's something is. Yeah, what's pretty? Yeah, tell us about what it looks like and what you see when you walk in that blows you away. For me, it's about the finishes. Right. So I just took a new listing in Bell Harbor Village. And when I walked in the house, obviously, you know, the owner built it to the nines, no budget. But I saw small details that I'd never seen before, like his electrical outlets, you know, where you plug in your kitchen appliances. They were completely seamless and built into the backsplash of the kitchen, which I've never seen before.

12:02So something that small really caught my attention because it was something new and I haven't seen it in the marketplace. Have you always been in luxury real estate? How did you actually start out? That is a good question. So I started out in luxury real estate, I would say about eight years ago. I did not always work the luxury marketplace. I started as a cocktail waitress in a nightclub called Mint in Miami Beach. And the manager of that nightclub, he got his real estate license and I wanted to buy a condo. So I was actually his first client. And at age 22, I bought that condo, saw what he did in representing me, saw how much he made, and I got my real estate license shortly after that.

12:43And I just hit the pavement. I did rentals. I did deals for$200 ,000,$300 ,000. I had a steady climb up in my first 10 years of my career. And after that, I really started getting into the higher price points. And what's the difference between selling something for$200 ,000 versus$20 million or something like that, other than the commission, presumably? Is there a difference in the process or the experience as a realtor? Absolutely. I mean, I don't sell properties in the 200 ,000 price point anymore because my marketplace doesn't have them. Miami has become a very pricey town, especially Miami Beach, which is what I focus on.

13:23But when I did have the dichotomy of working with buyers and lower price points, first-time buyers versus very wealthy buyers, those buying their fifth or sixth or seventh home, there's actually in a way less work because those first-time buyers need you to be everything for them, right? They need you to play their accountant and their house manager and maybe their housekeeper. But when you start working at the upper echelon, those buyers have their own teams and you become a member of that team. And oftentimes I'm the captain of that team for the 30, 60, 90 days that we're involved during a transaction.

13:54So in some ways, there's actually less elbow grease involved in the higher price point transactions. That sounds pretty nice to get much bigger commissions and not have to like, you know, not because that person, they have an accountant and they probably have their own architect who can describe things. So that sounds pretty nice. Lessa work for greater commissions. How did you make this switch? And actually, how do you get listings? So if I'm the Mercedes Benz tower or the Aston Martin tower, and I don't know if you've actually sold anything in those specific ones, but if I'm one of these big towers, how do I connect with you or how do you connect with them so that you're in the position to sell those units?

14:37So I focus on single family homes, waterfront homes, the top condos in each building and the developers, they're chasing me to bring buyers. And I'm like, okay, I'll think about it because there are so many towers, right? So it's not like there's one waterfront home on a specific street with a certain view that someone wants that really is the golden egg, right? Right. Condos, there's no shortage of. So the developers have to offer very high commissions, you know, expensive expense accounts to really woo buyers and brokers. So I'm definitely not calling them. They're calling me. But as far as the other side of the coin, a very special home on a specific street, I'm chasing them.

15:21I'm knocking on their door. You know, I'm wooing them. So it's just like a supply and demand dynamic. Wait, can you talk a little bit more about that. So how do you decide what properties to take on? What is most interesting to you as a realtor? So I've entered the phase of my career where I actually say no to a lot of business. And it's an incredible place to be because if I'm not passionate about your home, I'm not going to list it. I don't need another listing. I don't need a listing that's not going to sell. I'm very picky about the properties I represent because I want to make sure that they sell.

15:54Otherwise, it's all in vain. A lot of my, let's call them competitors, they'll take anything. And that's just not my way of doing things. All right. But to Tracy's question, okay, you have all these listings or sellers who want to get into your network because you have access to the buyers. And we'll talk about that. What are some of the criteria that you use to judge to say, you know what, this is the type of property that I'll take on and list? It's kind of like a piece of art, right? You walk into a room or an art gallery or an exhibit and you feel something for that piece, right? You might not know anything about the art world, but there's a feeling.

16:30And that's how I feel about people's homes. They say, come over, give me an opinion of value. And if I walk in and I get excited and I feel, wow, then I really want the business and I pursue it. I present my marketing presentation. Naturally, I talk about my stats, how much I've sold, what records I've broken, and I really fight for the business. And how do you go about setting a price? Because this is something that I feel, particularly in the luxury market, I see these numbers like$70 million for 428 South Hibiscus Drive. And it seems very abstract. And also, it always seems to be like a round number once you get to the luxury market.

17:06You know, it's always$70 million or$25 million or$10 million. It's never like$10 million and$500 ,000 and like$200. How do you arrive at those numbers? I just do the basic work. I check the comps. I see what's sold. I see what's available. If there's a lot of available product, I encourage my owners to price better than the available products so that you don't miss out on a season because there's only as popular as our marketplace is, there's still a limited amount of people who can afford homes for 20, 30 and 40 million. I share the data with my owners and I let them know, do you want to achieve a sale in the next 30 days or do you want to be on the market for 900 days?

17:45And if they start giving me the, oh, I'm not in a rush. I don't care if it sells. That's not the listing for me.

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19:47What's the difference between, say, let's say some tech guy on the West Coast sells his company and suddenly he's a billionaire overnight. And then there's another person who's high up at Citadel and maybe they're not a billionaire, but they have, you know, they make millions a year. Tell me about the difference in what the two of them are looking for. Let's start. What is the tech entrepreneur looking for? To generalize, the tech entrepreneur, sure, tends to be very into that white box architecture that you're not such a fan of because it has a lot of natural light, right? It has high ceilings.

20:24It has walls for their art collection or their NFTs. And they also tend to be very concerned about walkability. They really show their NFTs on the wall? I have definitely seen that. They'd be falling out of favor a little bit, but I certainly remember shopping with someone in that space and he really needed a big wall to project his NFT collection. So it's a thing. They tend to also, you know, again, I'm generalizing, not be married with kids. So they want to make sure that they're in a location that's close to hotspots like the cool coffee shop or the it gym. The Citadel person, from my experience in getting calls from Citadel employees, they tend to be a different demographic in the sense that they're very concerned about.

21:06They're completely redomitizing their family. They often have more than one child. The schools are super important and proximity to their new Brickell headquarters is as well. And so the Citadel effect is something that it sounds like you personally have either experienced or at the very least noticed. Absolutely. I mean, Ken Griffin is the best thing to happen to the Miami marketplace other than Governor Coma. Say more about, Kim, as we know about Ken Griffin specifically, and he's spending a crazy amount of money. But how much overall, when he looks like the sort of mass listings, do you just see that Citadel effect specifically?

21:50He's a little bit past that, right? Some of his big purchases happened 24 months ago, 36 months ago or before that. But what he's doing now is he's uplifting the community. He's giving incredible amounts of donations to bring up Miami to be a world-class city in comparison to cities traditionally at that scale, you know, like a London, like a New York. So one thing I was wondering, we've spoken on this podcast about the increasing cost of insurance, especially in places like California and Florida. Is that something that is even on the radar of luxury buyers? Or is it, I mean, insurance costs have to move in tandem with like the cost of the property.

22:36So I imagine they're spending a decent amount of money on something like this, but is it just not as much of a concern for them? You know, insurance is definitely on the top of everyone's tongue, but it is not stopping them from buying. And these people are so wealthy. So if their insurance premium is$90 ,000 a year as opposed to$60 ,000 a year. They may gripe about it, but I have not seen a buyer not proceed with a transaction because of an insurance quote. You know, I've known some people not in the billionaire category who have moved to Miami, and I've heard this, that when it comes to schools, I've also heard that when it comes to, say pediatricians and people with other needs, et cetera, that they still don't consider Miami to be on par with, say, New York City.

23:24Can you talk about that development of what you see as the school and healthcare situation in Miami versus, say, what it was, I don't know, 10 years ago? I mean, I've never lived in a marketplace like New York to be able to compare pediatricians. I certainly feel that there are excellent healthcare providers in Miami and the surrounding marketplaces. But New York is a city that's been on the map for hundreds of years. Miami is still a virtually new city, right? And you have all these haughty, rich people moving down, and perhaps they expect a certain level of concierge service. And Miami is still a little bit of a slower-paced culture.

24:04Naturally, we're very close to the Caribbean, and it's a lot of mañana, mañana. So it just takes some time to getting used to. What about schools? And you mentioned the key areas that people with school age children want to go to. Talk to us about some of the different neighborhoods and stuff like that. schools are a big deal and we do have excellent private schools there is certainly a long list to get into a few of them because of the amount of transplants that have moved to this marketplace it'd be nice if there were more schools that were being open and i see that as the next trend i'm hearing you know billionaires buying up commercial buildings to open schools that will hopefully open in the next few years but the two neighborhoods that have the highest conglomeration of private schools are Coconut Grove and Coral Gables.

24:52And it's no coincidence that almost weekly you're reading a press piece about those two marketplaces. Most recently, Coral Gables was compared to as the next Beverly Hills, which I don't think anyone would have thought to be a parallel 10 years ago. Wow. Can you talk to us a little bit more about just the dynamics of the market that you've seen in, I guess, recent months? Is it still, it was going incredibly strong in the immediate aftermath of the pandemic. My understanding is like maybe it's softened ever so slightly in recent months, but by all accounts, it seems to be well insulated from a lot of the headwinds that would face other real estate markets.

25:32What have you seen? Well insulated is the perfect word to describe it. As a realtor in the Miami Palm Beach marketplace, I think we all have this panic when quote unquote high season ends, right? Right. Like May is over. People are leaving town for Aspen or Europe or the Hamptons. And the realtors naturally get this slight feeling of like, oh, it's over and we're never going to see it this good again. But this summer is proving to be incredibly active. It's being fueled a lot by the West Coast buyer. They're trying to secure something before the school year starts, if in fact their kids did get into a school of their choice.

26:08So we're having a very active summer. A lot of the buyers from the winter who thought they were going to be so cute waiting on the sidelines for summer, are going to have a hard pill to swallow because the homes that they thought would linger through the summer season are all going under contract. Okay, so here's a hypothetical, but what would have to happen in order for the luxury market to take a real hit in Miami? Like, what would be the thing that would maybe interrupt the dynamic that we've seen in recent years? We would have to have a very bad hurricane season. Okay. How does your business work?

26:44You know, I know I have some sense of how commissions work in a, in normal real estate markets. How does it work at this end? And are your buyers buying in cash or do they finance ever? Like how does that, how do the, is it mostly all cash? Talk to us about that. So the buyers that I work with, and let's call it an ultra luxury space are exclusively buying cash. If they are getting a mortgage, they tend to do it against their own portfolio with a private banking relationship, and they do it outside of closing or post-closing. Very rarely do I have a closing that is waiting for a lender to fund.