Chile a steady, growing factor in Miami real estate
Over the past decade, as South American investment in Miami real estate has flowed and ebbed dramatically, Chile’s impact has been comparable to the Miami Dolphins in the NFL: good enough to be mentioned, but not enough to outshine the influence of neighbors like Brazil, Argentina or Venezuela.
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However, just like the Dolphins team from last season, Chile has taken big steps forward over the past few years, earning much-deserved respect and attention in this unique market. Last October’s inaugural Chile Week USA (a series of events and conversations organized by the nation’s travel and tourism board) was a big factor in this success, showcasing the outstanding food wine, and culture of Chile, as well as its many travel and investment opportunities.
I am honored and excited to join Miami Mayor Tomás Regalado, Miami City Commissioner Wilfredo “Willie” Gort and fellow members of the Chile-U.S. Chamber of Commerce this month for a three-day commercial mission in Santiago, Chile, to promote opportunities for trade and investment in Miami, real estate being one of them. We are optimistic that this mission will quicken the momentum of Chilean interest in our region, which has been underscored by recent positive developments.
CHILE’S RISING PROFILE
Chile, which has a free-trade agreement with the United States, currently buys more products from the U.S. than Russia, Spain or Italy, and a U.S. trade surplus with Chile now nets $9.3 billion for the U.S. economy each year, according to a recent op-ed piece in the Miami Herald by Heraldo Muñoz, the nation’s foreign minister. He also mentioned that Chile represents an important U.S. export destination in Latin America, totaling $15 billion in 2015 — a fourfold increase since the free-trade agreement was signed in 2004. (The U.S. is also the main consumer of Chilean services, reaching a value of $233 million during 2015, as well as Chile’s principal investor, with an accumulated stock of $29 billion.)
In 2015, Chile’s Banco de Crédito e Inversiones (BCI) purchased the local City National Bank of Florida for $882.8 million, marking the first time a Chilean bank purchased a U.S. domestic financial institution and the largest single investment ever by a Chilean company in the United States, according to the bank’s website. (BCI is Chile’s fourth-largest bank, with $36.8 billion in assets.)
Last year, the U.S.-Chile free trade agreement formed a platform of serious discussions between U.S. home builders and more than 100 Chilean lumber-producing companies, trade organizations and government officials. In a statement, the National Association of Homebuilders described these talks as “extremely productive,” establishing contacts between Chilean producers and American buyers, and identifying and overcoming policy barriers to increase the volume of Chilean exports.
CHILEANS IN MIAMI
Chileans have had a strong presence in Miami for more than four decades. In the early 1970s, political and economic changes in Chile drove many families to relocate to Latin-friendly cities such as Miami, but some returned later when the political landscape changed, as Chileans are very attached to their culture and some have a hard time adapting.
In recent years, Chile’s strong and stable economy has discouraged emigration from the country, so our local buyer pool is mostly comprised of investors and people moving to Miami for work reasons, whether they work for a company or are in the process of starting a business here.
Today, you will find many successful Miami Chileans owning small and large businesses or holding senior positions in large companies.
While there is no central “Little Chile” neighborhood or section to distinguish this community, I have observed that many Chilean families favor Key Biscayne, Pinecrest, Palmetto Bay and Weston, while younger and single executives are more attracted to the Brickell area.
When buying investment properties, however, they lean toward condominiums in coastal sections such as Miami Beach or Aventura, so they can use them as vacation homes when they are not rented. However, I also have Chilean investors who, discouraged by high condo fees in places like Miami Beach and Sunny Isles, have purchased condos or single-family homes in residential areas not necessarily near the water, as they get a good return and long-term appreciation for less money.
A PROMISING FUTURE
Just as the Dolphins have seemingly built upon upon last year’s success in the off-season, I am optimistic that the upcoming mission and last year’s Chile Week will do the same for the nation’s growing impact on our region. It remains to be seen whether the nation’s size, stability and population will put it in the same “league” of Miami influence as its larger and more populous South America neighbors, but I believe that consistent, progressive steps will keep Chile a major presence and player in our business and real estate arenas.
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