Santiago Vanegas of Habitat Group: 5 Questions

Short-term rental units and condominiums are a hot development trend in Miami, and Santiago Vanegas is in the middle of the action.

Vanegas, founder, president and CEO of Habitat Group, said his company is building more than a third of the short-term rental units under construction in Miami’s Brickell district. That includes the third and final phase of the Smart Brickell Luxe project on Ninth Street — with 50 condos and 50 hotel rooms deisgned by Gensler — where units start at $450,000, as well as the 99-unit Millux Place designed by Kobi Karp on 12th Street.

And most of Habitat Group’s buyers are international, coming from Colombia, Brazil or Mexico.

Vanegas recently spoke with Commercial Observer about the shared economy-induced real estate development boom, concerns about potential overbuilding, and more.

The following conversation has been edited for length and clarity.

Commercial Observer: Why is this concept exploding right now?

Santiago Vanegas: Two words became very popular in business: disruption and the shared economy. The supply of rooms that Brickell and Downtown Miami needs was not delivered.

And that’s why developers right now are reactivating the condo-hotel market. We took the part of the market that the corporate hotels should be doing.

Why are hoteliers not developing and you are?
Because entrepreneurs are faster. Entrepreneurs are faster developers. 

Normally, corporate hotels don’t want to take any risk. They’re slow, and we move fast.

A lot of developers are jumping into the short-term rental space. Any concerns about overbuilding?

One thing which is good in this new short-term rental inventory is that the size of the units are smaller, because they are designed well. 


If you sell a 1,000-square-foot unit, your ticket price is $500,000. That’s really attractive for investors, because the price is not so high.

If you see oversupply, then developers are going to stop developing short-term rentals, the rates are going to be adjusted, occupancy is going to be reduced, and now that’s the beauty of competition. Now, you need to do better reservations, you need to reduce the fees, you need to compete. 

We have been here for the last three decades. So we already know what’s going on with the cycles, monetary policy, migration. I mean, that’s part of the game.

How have you seen these units evolve over the past few years, in terms of the features or design?

All of them are very nice projects, very sexy projects. 

The issue the short-term rental industry is going to have is the fees for the hotel operator. If you increase the fee, you take returns from buyers. 

Our strategy right now is doing hotel operations at a very, very low cost. So we are not bothered by buyers in the hotel operation.

What is your biggest challenge?

Now the challenge is: How could you do it better? How do you do more verticality? 

We already have full verticality already. We are fully integrated. A challenge that we have right now is executing the business plan and converting the City of Miami to hopefully 5 percent of the national EB5 visa market. It’s going to be fantastic for Miami if we capture more EB5 activity.

Jeff Ostrowski can be reached at jostrowski@commercialobserver.com.