David Martin of Terra Group discusses strategy in an interview.

 

The Grove at Coconut Bay, designed by fast-rising architect Bjarke Ingels and built by Miami-based developer Terra Group, is one of Miami's newest signature residential projects. The organization focuses on South Florida, with ventures in Sunny Isles Beach, Coconut Grove, and Doral. Terra Group will begin construction on Glass, an ultra-high-end 18-story residential project in South Beach's South of Fifth neighborhood, next month. qatar dale

David Martin, co-founder of WPC News, spoke with WPC News about the company's growth and marketing plan, as well as current industry trends. Excerpts that have been edited:

 

What is currently driving the market?

Local buyers account for 50 to 60% of our buyers in Coconut Grove. We attracted about 15 different nationalities with this [Grove at Grand Bay] project, in addition to locals. Our buyers in Miami Beach are mostly from the Northeast, including New York, Boston, and London. We saw a lot of [buyers] who were looking for a second, third, fourth, or fifth house, but who were only going to use it for three or four months a year. We're currently constructing over 1,800 homes in Doral. There are six different projects going on there. We discovered a very large demand in Venezuela, Colombia, and Brazil, as well as a lot of move-ups, or people who live in town homes but want to live in single-family homes. Many people are taking advantage of the low mortgage rates that have been available. Today, I see a trend where consumers want to buy something exclusive, but also something they can pass on to future generations of their family.

 

What effect do you believe a well-known architect has on a project?

It's not so much about the name as it is about what is made. You may have an incredible architect who has no understanding of the neighborhood or what the right product is and yet fail to complete the project. A lot of it has to do with the upfront visioning and programming process of what types of units and facilities to provide, as well as what differentiates and distinguishes the house. What makes an outstanding project is having an international architect as well as other stakeholders involved in the process. I believe that people are drawn to and intrigued by a name [of an architect], but the product must stand on its own.

 

What makes your approach to production different than it was before the crash?

We sought to optimize development opportunities prior to the crash, and we were not as picky about which neighborhoods we wanted to create. We now take the "less is better" approach. We've also implemented a thorough neighborhood study. We'd like to hear about the idea of dilution, which states that if there are 20 building sites similar to yours, it's riskier to create new construction than if you have the last available site in a community. There will be no more construction of horizontal, single-family master planned communities in Doral in the next five years. While there is a movement toward urban infill, it was not the best match for Doral. We have the last high-rise to be constructed south of Fifth Avenue in Miami Beach. "Why not invest in a community that has the last building permit available to create something special?" we reasoned.

 

What makes your marketing unique?

More intellectual luxury is being sought by buyers. Instead of being gimmicky, shallow, or superficial, the ads should be informative and scholarly. Our campaign in Coconut Grove features Alexander Graham Bell, Tennessee Williams, and Robert Frost quotes. People nowadays choose to buy rather than be sold to. When they're shopping for themselves, they have a different mindset. You want to appeal to their needs or desires; you must follow through with what you say and do. I'm meeting with our customers more now than I was before the crisis. It all boils down to taking a transparent approach.

 

What are your thoughts on a new bubble forming?

The gap between a weak and a strong buyer in terms of wealth and liquidity was something we discovered in the pre-crisis period. Today, you'll find customers who will only buy if they have the cash to close and they will not risk their deposits if they don't. I wouldn't use the term 'bubble,' because I believe that each neighborhood is evolving on its own. The depth of demand for Miami is one of the most intriguing aspects. When you look at the rest of the world, Miami has gained a certain amount of respect because it was associated with a bubble and recovered in such a powerful and resilient manner. There will be stumbling blocks along the way. We see ourselves as long-term investors, and we recognize the credit crisis that occurred at the time. Today, a lot of things are constructed entirely with cash; there isn't the same reliance on credit that there was pre-crisis.

 

What kinds of projects will the firm be concentrating on?

We're not going to stick with high-rise projects that aren't going to work or aren't going to suit. We construct our own homes and houses, and we're currently working on a strong grocery-anchored retail center in Doral. We enjoy the variety, but we prefer to concentrate our efforts in South Florida; we are not expanding in South America or other areas of the United States. We believe that Miami Dade County and Broward County offer tremendous potential. We can carve out a niche for ourselves, with a name and brand that will be popular, but we don't want to overextend ourselves. Rather than attempting to complete thousands of projects, we are attempting to complete fewer projects of higher quality.