Gil Dezer says some observers thought his family was a bit whacky when they announced one of the first major projects after the Great Recession: The 60-story Porsche Design Tower, which includes a first-of-its kind elevator that would lift cars to the owners” mansions in the sky.
“When we started everybody said, “You can’t do it. You can’t start your car on the 30th floor with combustible materials,�” says Gil, who is president of Dezer Developers.
However, he found a way to deal with that issue and the tower has turned into a major success with only nine units out of 132 left for purchase, Dezer said in a recent interview. The sellout is expected to be $850 million while the construction loan from Wells Fargo is $214 million.
Moreover, Dezer says 240 out of 307 units at Residences by Armani Casa down the street are already spoken for.
“I’m the brand guy,” Dezer says about his love of his luxury brand partners.
A stay at Armani Hotel Dubai inspired Gil to pursue that brand, which will have interiors and furniture designed by Giorgio Armani’s team and architecture by Cesar Pelli, who did the Adrienne Arsht Center for the Performing Arts.
How the Dezers got to this point starts with Gil’s father, Michael, emigrating to the U.S. from Israel and becoming the dominant landlord in New York’s Chelsea neighborhood before spotting opportunity in buying beachfront hotel properties in Sunny Isles Beach.
There’s plenty more to the story ahead with the family still owning plenty of beachfront land in Sunny Isles, buying the 26-acre Intracoastal Mall in North Miami and getting involved in Miami’s Midtown area.
�My father has a saying, he’s the captain of the ship and I’m the navigator. I have to figure out how to get there,” Gil says.
Gil Dezer has taken over day-to-day leadership of Dezer Development, while his father spends a lot of time on his Miami Auto Museum, home of the Dezer Collection. But there are plenty of other family members involved, too. Gil’s older sister, Leslie Dezer Salmon, is president of Dezer Properties and runs the New York operations that include 1 million square feet in 27 buildings. Younger sister Estee Dezer-Gurwitz is a vice president at Dezer Properties and plays a key role in the company’s accounting. Their mother, Neomi, leads financial affairs.
“You can’t write a check without asking mom first. She keeps my father and I in check,” Gil Dezer says.
BEGINNINGS OF AN EMPIRE
Michael was the son of a bus driver and served in the Israeli Air Force before emigrating to the United States in 1962 and subsequently starting a type setting business.
In the pre-PC era, one typewriter was hooked up to 500 others to write personalize letters for customers such as banks, Gil says. Michael needed space for his growing business after buying out competitors, so he bought a building to house the company.
He eventually realized there was a lot more money in loft conversions than the typewriter business, Gil Dezer says.
Michael entered the South Florida market by buying a Holiday Inn at 87th Street and Collins Avenue in 1986, Gil says. “Miami became a second home for us. Then I went to school at UM from 1993 to 1997. As I was graduating, we heard rumblings of what was happening here in Sunny Isles Beach and decided to place a big investment.”
There was no zoning for building high-rises in unincorporated Miami-Dade County, but Michael correctly anticipated that would change when the city incorporated and saw a need to grow its tax base, Gil says. He bought a string of low-rise beachfront hotels from 1997 to 1999, when the new building code came out.
SURVIVING THE RECESSION
The first project was called the Ocean Grande, but the family turned to Donald Trump’s brand to get more marketing oomph in the wake of the September 11th terrorist attacks. The renamed Trump International Beach Resort was followed by the Trump Palace in 2006 and the Trump Royale in 2008 – just in time for Wall Street’s meltdown.
“We sent out the closing notices and two days later Lehman Brothers went bust,” Gil says. The family was also developing three projects with Related.
The Dezers faced the nightmare of 900 unit buyers who didn’t want to close, but the units” value was more than the cost of construction. Dezer said 2008 was when he took over a lot of the responsibility from his father.
“He said to me one time, “I wish we could go on vacation and come back when it is all over,�” Gil says.
There were hundreds of millions owed on two projects, which had 14 lenders on one and nine on the other, he recalls. But the family was well positioned because older sister Leslie said years earlier to never sign a personal guarantee on a project.
“On a non-recourse you could wave the keys at banks and say, “You can take it back,�” Gil says. Instead of doing that, he cut a deal with the banks and was able to pull through the recession.
In 2011, they had a mortgage burning party with Donald Trump and paid off $475 million in debt, Gil says. “That paved the way for us to get the first loan post crisis and develop the Porsche Design tower.”
Contrary to what many developers were doing with layers of deposits after the recession, the Dezers gained a $214 million construction loan and used a 30 percent deposits structure. Gil says he liked the piece of mind knowing that he had the funds to finish the project no matter what happened.
A FAMILY LOVE OF CARS
Cars were a natural fit for branding given that the Miami Auto Museum, home of the Dezer Collection, has 1,800 vehicles and Gil has participated in the 3,000 mile Gumball Rally, which is usually in Europe. The Dezers are also Palm Beach International Raceway co-owners.
“It’s a fun hobby and I’ve met a lot of like minded people that I have sold condos to,” Gil says.
The Dezers approached Porsche, but there was the question about how to really relate the car brand to the building. Part of the inspiration came from one of their New York holdings, which houses Manhattan Motor Cars and includes a five-story elevator for cars.
The big twist, though, at the Porsche Tower is that unit owners will be able to sit in their cars while they are transported to their units.
The cars aren’t running in the elevator and a pressurized water mist system, widely used on cruise ships, is used as a precaution against any fires.
The patented Dezervator works like this: Each unit owners” car has a transponder that recognizes the vehicle when it comes onto a platform. The driver turns off the car, lowers the window and shuts off the engine. The lights are flashed twice and a dolly comes out, lifts the car and moves it into one of the building’s three car elevators. It then unloads in garages at the unit owners” residences. Owners who don’t want to stay in their car can take a regular elevator upstairs.
Many units have windows so owners can see their luxury makes from inside the units and the elevators are a flashy design element in the building.
The typical units are 4,750 square feet and all but 16 have a plunge pool on their balconies, Dezer says. Prices for the few remaining units are $6.5 million for an Intracoastal Waterway view or $8 million for an oceanfront view.
Eight of the units have 10,000 square feet – one is left – and there are also two 17,000 square foot penthouses. Prices peak out at $32.5 million.
Another part of the automotive theme is the racing car simulators, so you can race against your neighbors, Gil says.
Beyond the novelty of having your car outside your unit, Dezer says some buyers like the privacy aspect.
One celebrity buyer, who Dezer declined to identify, already owned a South Beach unit, but decided to buy at the Porsche Tower.
“The valets harass me and always stop me for a picture. I feel like they are always tracking me and seeing where I’m going. I’m going to have a blacked-out Mercedes with tinted windows so I can come and go,” Dezer says the celeb told him.
Dezer says the family is still buying property and has three projects under development. The Intracoastal Mall is a long-term play, but one of the first steps is bringing an iPic theater to the shopping center.
Dezer said he is pursuing a rezoning that will lead to creation of a project resembling Boca Raton’s Mizner Park, which has a mixture of restaurants, shops, offices and entertainment. He expects to do the teardown part of the development in phases with some tenants with long-term leases being relocated as part of the process.
The Dezers are a partner in a company that owns 30,000 rental units, which Gil expects will turn into a REIT. They are also partners with Related in the Hyde Suites and Residences in Midtown, which will include a SLS hotel.
Meanwhile, the Dezers still operated the Thunderbird, Bluegrass and Monaco hotels along the beach in Sunny Isles.
Gil says his family understands the business of operating hotels and “there is no gun to our head that we have to start construction tomorrow.” ?