Miami developers are dipping their toes back into the crypto buyer pool, nearly three years after the collapse of the cryptocurrency exchange FTX.
Bitcoin buyers never disappeared, but developers have certainly shied away from them.
PMG, which previously allowed buyers to convert their digital currency to cash via FTX, announced it is now working with Shift4, a payment processing company. PMG’s Ryan Shear says the developer will allow buyers across all of its Florida condo projects to use the platform to convert their Bitcoin or other crypto to cash.
Shear received requests from his sales teams to have this kind of arrangement in place. PMG has had buyers convert their crypto to dollars and transferred deposits to the developer’s title company that way.
Many developers can’t accept digital currencies because their lenders or investors don’t allow it.
Shear is quick to say the developer is not accepting cryptocurrency. Shift4 and other platforms allow investors to pay from their crypto wallets.
Interest in crypto-related real estate deals definitely exists. I moderated a panel last week at the sales center for Rider Residences that lasted nearly two hours. The developer of the planned Wynwood condo project, Diego Ojeda of the Rilea Group, said he’s looking to appeal to a wider buyer pool, including crypto investors.
Foreign buyers, in particular, may be interested in using crypto because it may allow them to bypass banking regulations in their home country, or cryptocurrency is already the currency of choice in that country.
Rilea recently marketed the Rider in El Salvador for this reason. “The phones have been ringing off the hook” since their event, Ojeda said.
In April, Rilea completed its first wallet-to-wallet deal for a unit at the building. That means a buyer sent their bitcoin to the developer’s wallet. Rilea has to keep all of its deposits with a third-party escrow agent, so after it received the deposit for that deal, it converted the funds via Kraken and then sent that money to the escrow agent.
“We’re exploring keeping part of that in crypto and defining what that means,” he said.
The speakers at the Rider event, who included broker Erik Mendelsohn, Colin McMahon of Milo and in-house Cervera Real Estate agent Uri Redler, also discussed the possibility of condo associations holding a portion of reserves in crypto, though the legalities of that are unknown.
Mendelsohn said that would allow unit owners to possibly collect a refund at the end of the association’s fiscal year if the crypto appreciated in value.
McMahon explained how crypto-backed mortgages work. Basically, the mortgage is backed by the property and the lender holds onto the crypto for the duration of the loan. Once it’s paid off, the borrower gets their crypto back. This is appealing to crypto investors who are in it for the long haul and don’t really want to part with their bitcoin.
“Most of these clients are very asset rich, but income poor,” McMahon said.
The rates are a bit higher, say 9 percent, compared to a standard bank mortgage.
But, as Mendelsohn said, “Bitcoin has historically gone up 60 percent a year. It’s the best-performing asset we’ve ever seen in our lifetimes.”
So you may be paying 9 percent interest, but your crypto’s value may increase significantly more than that.
Still, the risks — market volatility, the potential for fraud, etc. — are there, and crypto enthusiasts could find themselves upside down, depending on their timing or where their digital currency is stored, if not in a wallet.
Also, not all cryptocurrencies are equal. One Bitcoin is worth about $109,000 as of Friday afternoon. In April, it was worth about $75,000. Tether, known as USDT, is on par with the dollar.
“Bitcoiners, including myself, we all believe the price is going to go up, never go down, although we know that’s not realistic,” Mendelsohn said.
What we’re thinking about: Canero Group bought out an aging condo building in Coconut Grove, and Mast Capital and BH Group are moving forward with their buyout of another building in the same neighborhood. What other buildings have been targeted by developers recently? Send me a note at [email protected].
CLOSING TIME
Residential: An entity linked to the investment firm Alden Global Capital sold the waterfront spec house at 4744 North Bay Road in Miami Beach for $29.5 million to an undisclosed buyer. 4774 North Bay LLC, managed by Alden Global executive Thomas Del Bosco, sold the house.
Commercial: Envision Cold paid $47.2 million for a freezer facility complex at 2950 Northwest 75th Street in Miami’s West Little River. Rivas Family Enterprises, led by Manuel Rivas in North Miami, sold the 6.8-acre property, which includes three cold storage warehouses.
NEW TO THE MARKET
An oceanfront home lot in Palm Beach hit the market with Compass’ Elizabeth DeWoody for $45 million. The 0.6-acre lot at 1285 North Ocean Boulevard comes with approved plans for a 5,637-square-foot, seven-bedroom and 10-bathroom home, according to the listing. Property records show a company tied to luxury homebuilder Mary Frances Garrett of Atlanta-based M2B Homes paid $23.5 million for the property in 2022.
A thing we’ve learned
The 2025 hurricane season could see up to 19 named storms, marking another above-average season. This could include three to five Category 3 or higher hurricanes, the National Oceanic and Atmospheric Administration predicts. Hurricane season starts in one week.
Elsewhere in Florida
- Speaking of hurricanes, the Florida Legislature approved a bill that could weaken municipal control after a hurricane, potentially allowing developers to rebuild homes under existing building codes, the Miami Herald reports. Gov. Ron DeSantis is expected to sign the bill into law. It would also raise flood insurance rates for tens of thousands of Florida homeowners and make it easier to bypass elevating more homes.
- DeSantis signed legislation that’s aimed at making the foster home licensing process easier and quicker, allowing foster families to transfer their licenses to a new location in Florida without having to restart the application process, according to Florida Politics.
- A partial collapse of the third floor of the Coconut Grove Playhouse halted demolition work on the historic property and shut down a portion of Main Highway last week. Miami-Dade County is demolishing the rear auditorium, but planned to restore the portion of the building fronting Main Highway, Coconut Grove Spotlight reports. It’s unknown if that will still happen.
- The Florida Fish and Wildlife Conservation Commission granted an initial approval to rules that would allow for the first bear hunt in a decade, the Tampa Bay Times reports. The commission will take a final vote in August. Critics say the hunt is inhumane and unnecessary, and have called for an updated population survey. Proponents point to an increase in bear and human interactions over the years.
