Hillary Hoffower
- Wealthy Russians who parked money in Sunny Isles Beach real estate are assessing their options.
- Real estate agents told Insider they hadn’t yet seen big changes in the market as a result of the sanctions.
- Sunny Isles Beach remains a place for the Russian elite to escape and invest their money.
In Sunny Isles Beach, Florida, wealthy Russians are playing a waiting game.
The 1.5-mile strip of island located just north of Miami was nicknamed “Little Moscow” thanks to the Russian immigrants who settled there decades ago and the many wealthy Russians who have parked their money in luxury real estate there. In recent years, Florida saw the most number of Russian property purchases in the US.
Now, sanctions on the Russian elite due to President Vladimir Putin’s invasion of Ukraine threaten to jeopardize their lifestyle in this slice of paradise. Some are worried that their money in Russian banks may be blacklisted if they want to buy real estate in the US. But in Little Moscow, the Russian elite are still evaluating their options.
When I visited the area last week, two real estate agents told me that the market was in a holding pattern while some buyers or sellers figure out how they’ll be effected by sanctions — if at all.
Ramon Rodriguez, director of sales at a Compass real estate team based in Miami said, he’s been fielding requests from “opportunistic” buyers “looking for Russian sellers.” He added he hasn’t seen a change in Russian buyer activity — he’d recently shown the $7.5 million penthouse we were touring at the time to one.
Rodriguez said the amount of new US buyers looking in Sunny Isles and the rest of South Florida “far exceeds” any drop in Russian buyer activity. While he’s sporadically seen “uber wealthy” Russian buyers in the area during his real estate career, he said, most aren’t in the top 1%.
Alexandra Peters of ONE Sotheby’s International Realty, whose most recent listings include Sunny Isles mansions for $11.5 and $8.1 million, likewise said she hasn’t seen a fire sale from nervous Russian owners. “Everyone’s on standby,” she said. “I think many are hopeful things will still settle sooner rather than later.”
She doubts that there will be a sudden influx or mass exodus in the area. “It will be quiet and under the radar,” she said. “It’s just too early to see any new tendencies of buying and selling.”
Sunny Isles remains a place to escape
Sunny Isles Beach was originally a place of freedom for those fleeing communism in the former Soviet Union, Peters said. But it also became “an opportunity for those who do have money to spend it,” she said. “There’s not a lot of questions asked about where the money is coming from.”
She added: “When you’re wealthy and living in a state of fear, you feel very free here. You can enjoy life and go shopping.”
It’s for this reason that life in Sunny Isles seems to be chugging along as usual. As I ventured around the area, I saw many a Lamborghini on the street and Louis Vuitton bag on the arm — people are still spring breaking in this American center of Russian wealth.
Daniel Gielchinsky, attorney at DGIM Law, PLLC in nearby Aventura, Florida, who handles many real estate litigation and bankruptcy cases in the area, explained that when a geographic area becomes considered unsafe, the people living there go somewhere else by default. For some Russian business-people, that place happens to be South Florida, particularly in Sunny Isles.
Perhaps that’s why he’s noticed more activity in the area. He noted that in one day he saw three luxury car carriers dropping off the likes of Bentleys and Rolls Royces in front of the luxury condos. For comparison, he said he usually sees one a year there.
“There’s a lot of talk, a lot of people are anxious about how it’s going to affect them,” Gielchinsky said. “But when something like that happens, people come here and put their money elsewhere. They invest, they buy a place. Traditionally, those condos have been considered a wise place to put currency, which eventually becomes dollars.”
Buyers are eager, but there’s no reason to sell right now
Though it seems many Russian property owners in South Florida are sitting tight for now, potential buyers are already waiting in the wings. Several South Florida agents seconded Rodriguez’s comments, telling Insider’s Jordan Pandy that they’ve been fielding calls from prospective buyers hoping to take advantage of distress sales amid the many sanctions. But they said there are none to be found.
Owners may not be in a rush to sell considering that seizing assets in the US could actually be a massive legal headache for the government. Gielchinsky said sanctions on individuals are hard to enforce, especially in a country like the US where there are presumptions of privacy. Wealthy buyers are typically able to shield true ownership of a property when they want to move their money around, he said, by layering it up through LLCs and trusts.
“What are you going to do with it, put a condo in the back of a truck?” he said. “You can start a legal proceeding, but some lawyer’s going to pop up and say ‘No oligarchs here, keep moving.'”
Liz Hogan, a real-estate agent at Compass, told Pandy, “They really just are too scared to do one thing or the other. They think if they sell, the government will seize their assets, and it’s easier to keep the property and safer to keep the property than it is to have cash in the bank.”
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