Miami and New York are two of the most visited cities in North America, and both are home to some extravagantly priced real estate.
Miami is home to the richest ZIP code in the US, where the average income is $2.2 million and the median home value is $2.6 million. And in New York City, there are now three homes that have sold for more than $100 million — two of them in 2019 alone.
But if you’re looking to invest in real estate in 2020, Miami is the better bet, according to Vladislav Doronin, the owner and CEO of luxury hotel brand Aman Resorts and chairman of real-estate development firm OKO Group.
While New York City has been “the center of the Western world” for many years, Miami “has recently become a global city,” Doronin told Business Insider.
“In recent years Miami has become a global hub, with one of the US’s biggest airports enabling easy access to North America, Latin America, Europe, and the rest of the world,” Doronin said. “It is the fastest-growing city in North America.”
Miami had the fastest-growing job market among major US cities between 2012 and 2017, and the population grew by 12% in that time period, a CityLab analysis found.
And the federal tax reform passed in 2017, coupled with Florida’s lack of income tax, has made Miami increasingly attractive to both companies and individuals, Doronin said.
In the past couple of years, some of the highest earners in high-tax states like New York, New Jersey, and California have been relocating to Miami and snapping up luxury real estate. Local real-estate agents attribute the migration to the effects of the federal tax reform that was passed in 2017.
Dora Puig, the top-ranked real-estate broker in Miami-Dade County by sales volume in 2018, told Business Insider earlier this year that she’s seen “a lot of record sales and sales over $10 million” since 2017, and the buyers are Wall Street hedge-fund managers, tech moguls, and other high earners from places like New York City, New Jersey, Connecticut, Chicago, and Silicon Valley.
These buyers usually aren’t shy about admitting their move is for tax purposes, Puig said.
“You tax people so hard in their state when they’re top of the market and they make that much money, they’re going to pick up and move,” she said. “It’s that simple.”
And Miami’s balmy weather certainly adds to its appeal.
“On top of the market conditions, Miami offers great quality of life to residents with the great weather, and active outdoor lifestyle,” Doronin said. “It is attractive to business owners, CEOs, and those working in a high-stress job, as it enables them to de-stress and recharge after working hours.”
The tax reform isn’t only affecting the residential market, according to Doronin. It’s also prompting New York City and Connecticut-based hedge funds to relocate to Miami, he said.
Billionaire investor Carl Icahn is moving his publicly traded Icahn Enterprises from Manhattan to Miami in 2020 and offering employees a $50,000 relocation benefit if they follow him to Florida.
In New York City, he’s opening Aman New York in 2020, the first urban Aman location in the US. That project dates back to 2015, when Doronin’s OKO Group paid $475 million for the fourth through 24th floors of Manhattan’s historic Crown Building, where there will be an 83-room luxury hotel and 22 Aman-branded residences.
Doronin recently announced that he’s opening an Aman in Miami as well, with a luxury hotel and private branded residences set to open in 2023.
His other ongoing projects in Miami include luxury residential towers such as Una, a 47-story waterfront condominium in Miami’s Brickell neighborhood, and Missoni Baia, a 57-story luxury tower in East Edgewater. Then there’s the 57-story office tower in Brickell, which will include an upscale rooftop restaurant and bar, a 30th-floor sky lobby, a 2,500-square-foot health and wellness center, and cafés and shopping.
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