Skyrocketing land prices and construction costs for spec mansions has forced Todd Michael Glaser to focus more on renovations than building millionaire and billionaire bunkers from scratch.
“Believe it or not, we have reworked our whole business approach,” Glaser told thousands of attendees at Mana Wynwood on Thursday. “We are doing more renovations than anything.”
Glaser, a top South Florida spec mansion developer, joined Compass agent Liz Hogan on a panel, “Building for Billionaires: Miami’s Insane Spec Home Market,” during the second day of The Real Deal South Florida Real Estate Forum. Kate Hinsche, a TRD residential real estate reporter, moderated the discussion.
When it comes to new construction, Glaser said he is concentrating on developing projects in the $8 million to $10 million range. “Anything over $30 million has slowed down,” he said. “The market for [spec mansions] over $50 million is strong, but it is a big commitment.”
Property sellers and contractors are asking for too much money, he said. “The prices don’t make sense,” Glaser said. “Everyone is trying to charge as much as they can.”
Hogan noted that land prices are also rising in waterfront residential submarkets outside of Miami Beach and Palm Beach. “The last [lot] I sold was in Bal Harbour,” she said. “It sold for $1,000 a square foot. That is astronomical. In Coconut Grove, it was $200 a square foot [a year ago]. It went to $300 a square foot.”
Buyers are on the hunt for very large lots, which are in short supply, Hogan said. “I have a property in Miami and it wasn’t big enough,” she said. “Bigger is better, and that is what they want.”
Billionaire business titans like Amazon founder Jeff Bezos and hedge fund manager Ken Griffin are transforming former waterfront estates into massively expensive bunkers, Glaser added. For instance, Griffin is redeveloping a 7.5-acre beachfront site in Palm Beach into a 50,000-square-foot palace.
“[Griffin] wants a big compound,” Glaser said. “He’s going to be over $1 billion in actual money when that is completed.”
