Miami Condos Lure Rich Mexicans Who Want to Park Cash Overseas

More than a dozen well-heeled prospective investors gathered at the Presidente InterContinental hotel in Mexico City’s ritzy Polanco neighborhood on a recent morning. They were there to hear a pitch on Miami real estate، many of them lured by a two-page newspaper ad touting luxury amenities in condos starting at $500،000.

Interest in stashing cash in overseas properties has soared among wealthy Mexicans since the landslide win for President-elect Claudia Sheinbaum and her Morena party in last month’s elections. They’re seeking an escape as speculation swirls that the next government will undermine the rule of law and boost taxes on the rich، never mind the official denials.

At the Polanco hotel، a handful of agents from Brickell Realty Group were chatting up clients، while others were ferrying potential buyers into glass conference rooms to discuss financing and how to get US visas. One attendee said concern about Sheinbaum’s populist ties had prompted her to consider spending up to $1 million for a property، but she had to offload some real estate in Mexico first. That، she said، had proved to be a challenge in recent months.

Safe haven

Mexico’s rich are rushing to find safe havens for their assets، and South Florida is a prime target. Google searches in Mexico for “Miami real estate” and “Florida real estate” spiked in mid-June، coinciding with a sharp selloff for the peso in the aftermath of the vote.

At Cipriani Residences Miami، a 397-unit luxury tower being built with financing from Mexican billionaire Carlos Slim in the Brickell neighborhood، the director of sales says there has been a surge of requests from Mexican buyers since the June 2 election. At the Corcoran Group، an ad in a Mexican newspaper generated about 40 potential clients in the weeks after the election، up from just one or two a month before the vote.

“There’s been a major uptick in activity،” said Mick Duchon، a Corcoran agent. “The political environment has changed.”

Miami has long been a refuge for Latin America’s wealthy in times of turmoil، dating back to the influx of Cubans fleeing Fidel Castro’s 1959 revolution، followed by waves of Colombians، Venezuelans and Argentines as crises flared in those countries. It’s transformed the city into a Latin cultural and financial capital، where Spanish is spoken almost as commonly as English. More recently، South Florida has seen an influx of finance professionals since the start of the pandemic as firms sought out lower taxes and sunshine.

Now، Mexicans، who traditionally flocked to places in the US other than Miami، may be following suit. Hard data is lacking due to delays in reporting real estate transactions، but interviews with agents and wealth experts illuminate the trend.

Very progressive president

Sheinbaum is expected to be a “very progressive president and a lot of wealthy Mexicans are scared of that،” said Mauricio Umansky، who was born in Mexico City and now runs real estate firm The Agency، with offices in Miami and Mexico. “That’s why they’re buying real estate in the US — it’s the best way to protect their wealth.”

Sheinbaum’s win was well telegraphed before the vote، and there had been some signs that wealthy Mexicans were sending capital out of the country earlier in the year. But the interest in Miami real estate took off after the ruling Morena party won a larger-than-expected share of Congressional seats، fueling concerns the party would be able to easily push through changes. Of particular concern are plans to allow the direct election of judges، which critics say threatens checks and balances.

That said، it can be hard to pinpoint exactly what Mexico’s elite might be worried about. There are few specific proposals to raise taxes، confiscate wealth or otherwise radically remake the economy، and Sheinbaum has sought to assure skeptics that investors have no reason to worry. In recent weeks the peso has erased some of its post-election losses.

There’s also the fact that under the current Morena government، led by Sheinbaum mentor President Andres Manuel Lopez Obrador، the wealthiest people in Mexico got richer than ever. That’s in part due to the peso’s rally during AMLO’s term and policies that favored the oligopolies that underlie many Mexican families’ wealth. It’s not the first flight to Florida، either: earlier in AMLO’s presidency، fears around crackdowns on tax evasion and corruption sent a crop of wealthy Mexicans to Miami، too.

Now، it seems like a fresh wave of beneficiaries of those gains are looking to move the proceeds abroad. In the first quarter of the year، Mexican companies and individuals pulled capital at the fastest rate in two years، according to the Institute of International Finance.

“That reflects increased uncertainty ahead of the election،” said Martin Castellano، who oversees Latin America research at IIF.

A widening deficit

Wealthy families will be watching to see how Sheinbaum governs after she takes office Oct. 1، with a particular focus on how she plans to cope with a widening deficit amid speculation she’ll be under pressure from allies to boost social spending.

“There’s a lot of talk about big changes in estate taxes،” said Jorge Suarez-Velez، who leads the Latin American division at investment adviser Americana Partners with a focus on wealthy families in Mexico. “There’s talk about a possibility of increasing marginal rates for corporates and individuals in terms of income taxes.”

Sheinbaum has said repeatedly that she isn’t looking to pass major tax changes at the start of her term. Her press office didn’t return calls seeking additional comment.

Mexicans have been underrepresented in South Florida، making up only 5% of the Hispanic community in the Miami metropolitan area in 2022، virtually unchanged from two decades earlier، according to US Census Bureau data analyzed by the Pew Research Center.

But that’s begun to change in recent years، adding to a pandemic-era real estate frenzy in Miami that has somewhat abated but still left the local real estate market in a much better position than most of the rest of the US.

“Mexicans in Miami are a new aspect، a slower but steady trend،” said Danny Hertzberg، a founding partner of the Jills Zeder Group، one of Miami’s biggest high-end real estate brokers. “Mexicans would usually go to California، Texas or Colorado، but have started coming more and more to Miami.”

In the last two years، more than 80 units at Cipriani Residences Miami have gone to Mexican buyers، according to Ana Gomez، the property’s director of sales. She said the latest uptick has taken the group somewhat by surprise. Today، buyers from Mexico rank sixth in the top foreign purchasers of the Miami Association of Realtors.

Miltiadis Kastanis، a Douglas Elliman Real Estate agent who mainly works in new development in Miami، said there’s been a wave of recent sales to Mexicans. He says deals he’s worked on are in the $10 million to $20 million range، though since the projects are still under construction the transactions won’t show up in local databases for another two to four years.

Buying property abroad

It’s not just politics contributing to the decision to buy property abroad — sometimes it just purely for investment purposes. Homeowners in Miami-Dade County have earned $533،955 in home equity gains in the past 15 years on average، just under double the national average، according to an analysis released last month by the Miami Association of Realtors. The number of home sales for $1 million and up surged 9.5% in May from a year earlier، buoyed in part by an influx of cash buyers and migration of higher earners from the northeastern US.

Real estate agents elsewhere say the Miami area isn’t the only region seeing an influx of Mexican buyers. Austin seems to be particularly popular for buyers who prefer Texas، and mountain properties in Colorado have lured outdoor enthusiasts.

“These families are starting to feel more comfortable with meaningful investment in jurisdictions that are far away from the place where they made their fortune،” Suarez-Velez said.