On the couch of the sales gallery for his first South Florida project, Naftali Group CEO and founder Miki Naftali said talk of another wave of wealth migration from New York to Miami, spurred on by Democratic Socialist Zohran Mamdani’s mayoral primary win in NYC, is overblown.
“I think that those are just stories,” Naftali said. “New York is booming. First of all, I don't think he would be the mayor. So he won the Democratic [primary] — 400,000 people out of 8 million people in NewYork voted for him. Let's see the general election in November.”
Even while calling Miami home, New York-based Naftali didn't pull the trigger on his Sunshine State debut — the Jem Private Residences in the Miami Worldcenter — until 2022. He admitted at the time he was a little later than many of his New York developer peers to the pandemic exodus party.
But with construction underway at his Miami project and a key hurdle cleared at his follow-up in FortLauderdale — all while he is pursuing a $650M Brooklyn waterfront project that is setting price records — Naftali is tired of the comparison between the markets.
“When you look at what happened with Covid, so people left [New York], and what happened? Other people came, because New York is New York. And the same: Miami is Miami,” Naftalitold Bisnow Tuesday. “I think that we need to stop comparing Miami to New York or New York to Miami. This is not a competition.”
Naftali, who founded Naftali Group in New York in 2011, is known for luxury residential developments like The Benson at 1045 Madison Ave. and The Bellemont at 1165 Madison Ave.
The firm's entry to the South Florida development scene was in March 2022 when it bought the site for Jem Private Residences in Downtown Miami for $40.5M. The 67-story luxury tower broke ground in April 2024 at 1016 NE Second Ave. The development has 259 luxury condos sitting on top of 500 apartments. It is expected to deliver in 2027.
A month later, Naftali Group jumped on a Fort Lauderdale site for $20M, The Real Deal reported.
This past December, the firm launched sales for the Viceroy-branded luxury residences at 201 N. Federal Highway with a 45-story, 370-unit branded condominium. It plans to build a 454-unit rental tower on the site simultaneously.
The project is waiting on permits, which were delayed due to the developer of the neighboring Dalmarhotel project suing Fort Lauderdale over the approval of Naftali’s project, claiming it violated the city’s master plan.
The dispute has since been resolved, and the Viceroy site is cleared and ready for construction as soon as the permits come through, Naftali said.
His luxury multifamily and condo towers stand out during a challenging time for residential development. Construction, debt and insurance costs are putting pressure on developers, making it harder for many projects to get off the ground.
“We're not the only ones, but we are lucky enough,” he said.
Naftali said he expected interest rates to start coming down by 2025 when he looked ahead from 2023, but the timeline has stretched longer than he forecast.
“What I think is substantially more difficult in the entire market is to deal with the cost,” Naftali said.“And I think that some projects that are on the drawing board or even sold X amount of units will not be able to be built because the cost is too expensive.”
The high-cost environment has changed Naftali’s perspective on developing in South Florida, where many residential developers have opted to convert planned apartment projects into condos in recent years.
Naftali referenced Property Markets Group and Greybrook Realty Partners’ conversion of their planned 49-story Miami apartment tower into The Elser Hotel & Residences, which opened in 2022 with 646condos eligible for short-term rental use in Downtown Miami.
PMG development executive Brian Koles told Bisnow in 2023 that rising costs forced the transition from rental units to a condo-hotel.
“And nothing is wrong. They did the right thing for financials,” Naftali said of the project. “But my argument is the following: When I'm done with [Jem Residences], I will be one of the only brand-new Class-A rental buildings in Miami.”
While he is confident in his place in the market, a new South Florida project for Naftali could take anywhere between a few months and two years, he said, but the firm is in no rush.
“We’re always looking at opportunities,” Naftali said. “But we are not rushing to do anything. If, for whatever reason, we don't find the right opportunities, we are more than happy to wait.”