Inside Florida’s ‘Little Moscow,’ where Russian money flows thanks to ‘rich daddies’ snapping up real estate

Sunny Isles Beach is a 1.5-mile strip of island that sits between the Atlantic Ocean and Intracoastal Waterway in South Florida. It’s about a 40-minute drive to downtown Miami.

Sunny Isles Beach is located in northwestern Miami-Dade county. As of 2020, it’s home to 22,342 people. The most recent data from the Census’ American Community Survey that tracked population from 2015 to 2019 shows that there are 1,079 Russian-born residents living there — more than any country in Europe or Asia.

It’s a place where beachfront high-rise hotels and condos dot the coastline, towering over an idyllic scene of white-sand beaches and sparkling turquoise water. Compared to the dark and brutal winters of Russia, it’s a slice of paradise.

 

Before becoming a Russian luxury hot spot, the city was full of quirk and charm thanks to beachfront motels and tourists.

Fred Grimm wrote in the South Florida Sun Sentinel that the city was “once a linear tableau of South Florida kitsch, a seaside strip of themed motels, offering homage to ancient Egypt, Rome, the wild west, Polynesia, American Indians and so many nautical motifs, including Neptune and his water nymphs.”

“Motel Row,” a strip of 30 motels along the beach, was built in the 1950s and 1960s, when the city was known as Sunny Isles (before that it was called North Miami Beach). Tourism slowed its roll in the 1970s, resuming some 20 years later when most of the motels were replaced with luxury hotels, and Sunny Isles was renamed Sunny Isles Beach.

 

The city’s luxury-development boom in the 1990s revitalized the city’s economy, which began to see an influx of wealth.

The median home value in Sunny Isles is $555,042, higher than the $469,562 median home value in Miami. The most expensive home in the area currently listed on Sotheby’s is $13.9 million, and condos can cost as much as $35 million. 

It’s a place of well-known luxury. Consider the Porsche Design Tower, where residents can use an elevator for their cars. And the iconic Acqualina Resort was named the country’s best continental resort four years in a row by US News & World Report. Nightly rates at the five-star resort start at $2,500 a night. 

 

Among these developments are several Trump Towers, a brand that has held a huge appeal among Russian investors looking to move their money in the post-Soviet economy.

Trump doesn’t actually own the buildings but licensed the use of his name there, The Washington Post reported. Real-estate agents told the Post in 2016 that Trump’s name carries weight among the European, South American, and Asian elite, but especially among Russian oligarchs.

“When Russians get here, the first thing they ask is, ‘Where is the Trump building?'” Ilya Masarsky, real-estate developer who has worked with Russian investors in the US, told The Post. 

Jose Lima, a salesperson for the company that developed the region’s Trump towers, said at the time that Russian speakers bought about one-third of the 500 units he sold. 

A 2017 Reuters investigation found that at least 63 members of Russia’s elite spent nearly $100 million buying property in Trump buildings in the region, including the nearby city of Hollywood. Reuters called some of the buyers “politically connected businessmen,” adding that none seemed to be part of Putin’s inner circle.

“Russian patriots are happy here; Sunny Isles is a happy place,” Bell, the real-estate agent, told The Daily Beast in 2019. “Russian men make money at home, they visit their Miami property just for a few months in winter. Some of these rich daddies are in their fifties or older, while their women are in their twenties; the beach is packed with really young pregnant Russian girls, girls with babies.” 

 

 

A past Miami Herald investigation found that some of these buyers were the targets of US government investigations. Experts in illicit financing said Russian money gave the city its nickname of Little Moscow.

The Miami Herald found in 2016 that at least 13 personal or company buyers in the Trump Towers were investigated by the government, including a Russian-American organized-crime group and a Mexican banker accused of robbing investors. It also found that about 60% of the units are owned by shell companies, which only hold assets like real estate and can be involved in money laundering.

Experts more recently told the Herald’s Michael Wilner that illicit financing has helped Russians spend years snapping up properties along Florida’s southeastern coast. They estimated that Russia’s elite had more than $1 trillion in offshore accounts, which they said was disproportionally held in South Florida property.

As Julia Friedlander, director of the Atlantic Council’s Economic Statecraft Initiative, told the publication, “We know what’s happening based on patterns of behavior and observations from various sources, just like parts of Manhattan and parts of London. They’re known as places where real estate will reliably retain its value.”

 

 

The greater Miami region that Sunny Isles Beach is part of is also a popular place for birth tourism. Russian women have fueled a baby boom there in recent years.

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As NBC News reported in 2018, having a baby in Miami is considered a status symbol in Moscow. Russian birth tourists told the publication that giving birth there means getting an American passport and better medical care. It’s a legal act, as long as documents are filled out honestly, that allows their children the right to American citizenship and to sponsor their parents for a green card once they turn 21.

Wealthier Russians even hire agencies that offer birth-tourism packages that cost anywhere from $50,000 to $100,000, according to NBC News. Some of these companies offer Trump apartments as part of the package, the Daily Beast’s Katie Zavadski reported. For $84,700, expectant Russian mothers can get an apartment in a Trump Tower with a gold-tiled bathtub and chauffeured Mercedes-Benz. 

 

Not all of the money flowing into Little Moscow is from Russia, nor is it all “dirty.” And not all of the people who live there are wealthy.

The Herald’s Wilner reported that the area has also seen investments by overseas buyers in Europe and Latin America.

And, as Ari Odzer reported for local outlet NBC Miami, Sunny Isles Beach is also a sanctuary for refugees from the old Soviet Union and Russians on tourist visas. For this reason, he said, it’s also known as Little Kyiv, Little Odessa, and Little Minsk. 

Locals told Odzer that the Russia-Ukraine conflict is dividing residents, with some supporting Putin and others who don’t but are too afraid to say anything. Odzer wrote “the fear of Putin is a real phenomenon,” considering he could barely get any Russians to speak on the record about their president.

Russian real-estate purchasing has been slowing down in recent years because of sanctions.

Tightened US sanctions in light of Moscow’s interference in the US elections, as well as the Kremlin banning thousands of rich Russian law-enforcement officials from traveling abroad, left many Russians renting or selling their Sunny Isles Beach condos, the Daily Beast’s Anna Nemstova reported in 2019. 

“Russians can be easily recognized by their Bentleys and Rolls-Royces,” Bell, the Russian real-estate agent, told Nemstova at the time. “But this year the sales have gone down. It is becoming problematic for the Russian elite to take their money out of the country; and here the rules demand full disclosure, the name of the buyer and the source of money.”

However, Little Moscow still held the attention of “Russian corrupt bureaucrats,” Ilya Shumanov, the deputy head of Transparency International, added. Those who could still travel came during the winter and conducted deals at restaurants in the Bal Harbor mall before returning home to conduct business again, Nemstova wrote.

Brokers also recently told Wilner that Russian purchases have dwindled in the past few years, but said that could change with new developments like the Bentley Tower and the St. Regis Sunny Isles.

Now, Russian elites in the area are worried new sanctions stemming from the Russia-Ukraine conflict could prevent them from buying real estate.

President Joe Biden issued sanctions last week targeting Russia’s elite and their families and restricting the Kremlin’s ability to access Western financial institutions.

“We are extending the reach of US sanctions to prevent the elites close to Putin from using their kids to hide assets, evade costs, and squander the resources of the Russian people,” a National Security Council official told Wilner. “This is a new approach.”

While Little Moscow’s elites are worried future sanctions will threaten their lifestyle, experts told Wilner the sanctions currently in place were unlikely to have a strong effect in South Florida. 

Anders Åslund, a Swedish economist and the author of “Russia’s Crony Capitalism: The Path From Market Economy to Kleptocracy,” doesn’t think this will affect the Russian rich in the greater Miami region that Little Moscow is in. He told Wilner that the Miami Russians weren’t powerful enough to feel the sanction burn.

As he put it, “These are comfortable people, rather than the top people.”