Residential
Feb 13, 2026
Fernando de Nunez y Lugones on 2026 Luxury Demand, Ultra-Boutique Product, and Where Florida Is Heading Next
Vertical Developments’ Fernando de Nunez y Lugones shares how 2025 shaped buyer psychology, why the resale market surged, and what developers need to underwrite more carefully going into 2026.
Traded Media
Traded Media
Traded Editorial
6 min read
Key Points
- Resales led early luxury market momentum in 2025
- Cash buyers continue to drive the $3 million-plus segment
- Demand is consolidating around the boutique ultra-luxury product
- Developers are rethinking underwriting discipline and geographic strategy
In an interview with Traded, Fernando de Nunez y Lugones of Vertical Developments reflected on a year he described as “choppy,” shaped by shifting rates, economic uncertainty, and evolving buyer expectations. Rather than a slowdown, he sees 2025 as a reset, one that exposed clear divisions across price points and forced developers to sharpen both product positioning and risk management heading into 2026
What did 2025 reveal about luxury buyer psychology, and why did the resale market move first?De Nunez y Lugones described 2025 as a “choppy” year, marked early on by volatility tied to tariffs, market drops, and broader uncertainty. In his view, that uncertainty made high-end buyers hesitant to commit to major decisions at the start of the year. As interest rates began easing and buyers grew more accustomed to political and economic rhetoric, confidence started to stabilize, even if the uncertainty never fully disappeared.
At the same time, he pointed to record-setting activity at the top end of the luxury market, especially in transactions at $3 million, $5 million, $10 million, and into the $25 million to $50 million-plus range. A key distinction, though, was where that momentum first showed up. He emphasized that the strongest volume was in resales, largely because buyers relocating did not want to wait years for new construction to deliver. As resale inventory tightens, he expects resale pricing to rise and narrow the gap with new development pricing, creating more friction for buyers who previously justified paying a premium for brand-new product.
How is demand splitting by price point, and what is actually driving $3M-plus deals?
De Nunez y Lugones drew a sharp line between buyer motivations below $1 million and those above $3 million. In his view, sub-$1 million products in Downtown and Brickell tend to attract investors, including international buyers, who treat those units as “short-term rental dreams” and look for appreciation plus monthly rental return. Between roughly $1 million and $2.5 million, he noted that buyers still often require financing, which made that segment quieter when rates were higher. Above $3 million, he estimated roughly 70 percent of buyers transact with cash and non-traditional financing, which makes decision-making faster. He also described a common structure where buyers borrow against financial assets, using loans tied to trading accounts at relatively low rates. That approach, he explained, can reduce transaction friction and offer flexibility around prepayment. He also flagged a shifting mindset: when money market yields were higher, some buyers preferred keeping capital liquid rather than putting down large deposits on multi-year deliveries. As yields came down and stock valuations looked stretched, he expected a broader reallocation toward real estate to become more visible in 2026.
What does “ultra-luxury” mean now, and why are boutique buildings winning attention?
In de Nunez y Lugones’ view, today’s high-net-worth buyers are not just wealthier, they are more informed and more demanding. He described them as highly discerning and approaching deals with deeper diligence. Contract reviews take longer, negotiations involve more back-and-forth, and buyers focus intensely on finishes, delivery timing, and ongoing costs like HOA expenses, especially because many are buying primary residences.
That buyer profile is one reason he sees demand consolidating around ultra-luxury, boutique condominiums that offer privacy without giving up service. He pointed to Vertical’s work on projects like the 22-unit Avenia Aventura, Interiors by FENDI Casa, where the value proposition centers on exclusivity paired with amenity density. He cited an example where amenity space can exceed 1,000 square feet per unit, on top of roughly 3,500-square-foot residences, creating an extremely high amenity-to-unit ratio.
Where are luxury buyers still willing to compromise, and what is developers’ new balancing act?
Asked where buyers refuse to compromise, de Nunez y Lugones’ answer was simple: they want everything, from elevated services to dramatic amenity programs. But he also highlighted the constraint that sits behind those demands: buyers still push back on excessive HOA fees. That tension has changed how projects are designed. He gave a practical example of concentrating amenities on a single floor instead of spreading them across multiple levels, which can reduce operational complexity and ongoing staffing and maintenance costs.
He also noted an important shift in what buyers are willing to trade off. Miami has historically been driven by views and waterfront positioning, but he believes buyers are beginning to compromise on views more than in the past as price gaps widen between oceanfront, bayfront, and urban-core products. He framed it as a “push” of square footage westward as east-side pricing becomes unattainable for a broader slice of affluent demand.
How should developers underwrite risk going into 2026, and where is Vertical placing its bets?
De Nunez y Lugones described absorption in the luxury segment as counterintuitive. End users often prefer buying later in the construction cycle, closer to delivery, which means early-stage sales can be the hardest part of the process. In that context, the developer faces a decision: start construction to create momentum and confidence, or wait for demand to de-risk the build. He framed that decision as a matter of risk tolerance and financing strategy.
When discussing where developers misprice risk, he pointed to a few recurring pressure points:
When to take the construction loan, noting that developers activate financing at different presale thresholds (he referenced ranges like 30 percent to 70 percent).
- Gross profit margin discipline, especially after recent cost increases and the potential for margin erosion if underwriting assumptions fail to keep pace.
- Timing, because longer timelines increase financing costs, carrying costs, and taxes, which can force higher pricing and ultimately make a project harder to sell.
- He emphasized keeping land leverage low to avoid getting trapped by rising carry.
On geographic strategy, he said land pricing in top Miami-Dade and Palm Beach locations has climbed significantly, narrowing the buyer pool at the highest price points. Vertical’s approach, as he described it, is to aim to be “the best in the second division,” with an internal cap around $25 million for site acquisition, rather than competing for $100 million sites dominated by the largest players. He described a shift from Miami into Broward, where the firm could find more value for the money, including water access and views.
He also spoke about diversification across both geography and product type. He referenced an equity position in a roughly 70-acre Orlando project with 600-plus units, describing Orlando as a fundamentally different market. The broader goal is to diversify across regions and price points, which he framed as a way to reduce concentration risk. He expressed particular optimism about “Westbound” growth, linking it to continued migration and the expansion of financial institutions.
What does Vertical want to be known for as the market resets?
Looking ahead, de Nunez y Lugones said the goal is to keep evolving the platform rather than rely on a single cycle. He mentioned an interest in expanding further into rentals and multifamily as rates come down, while continuing to build on branded residences, an area he described as a meaningful part of the company’s positioning. He pointed to projects including what he described as the first Riva yacht residences in the world, and said Vertical’s objective is to bring concepts to market that feel memorable and differentiated.
He also positioned 2025 as a humbling year that forced a recalibration. The focus, as he framed it, is continued improvement and maintaining profitability while building a reputation for quality and long-term legacy.
Published: Feb 13, 2026Last updated: February 13, 2026