Moses Hershko, founder of Moses Hershko Development, has long been a homebuilder to the stars in California. His clients have included Arnold Schwarzenegger, Sylvester Stallone and a number of tech executives.
Now, Hershko is bringing his luxury brand to South Florida, where he plans to build mansions and high-end condos.
Commercial Observer caught up with Hershko to talk about his expansion to the Sunshine State and the skyrocketing price tags on the projects he works on.
The following conversation has been edited for length and clarity.
Commercial Observer: You’ve been a successful mansion developer in California. Why expand to South Florida?
Moses Hershko: I’m a real estate developer and a general contractor based in California, actually in Silicon Valley. For the last 20 years, we’ve been working with clients in the Bay Area, Los Angeles, et cetera.
All of our clients want a second home in South Florida, because of tax purposes and the weather and so forth. So we’ve been collaborating with general contractors and developers and designers in South Florida. I personally invested in Miami, even before COVID, and then during COVID things exploded in value. I knew everybody was going to move to South Florida, and it was going to explode, basically.
Thankfully, we’ve been right.
What projects are you working on in South Florida?
We’re working on a boutique condo project, 28 units with the price range of $20 million to $200 million. We’re targeting Miami Beach, and we have a specific location but we’re not disclosing it yet.
My sense of the market is we’re starting to see a focus from developers on really boutique projects. Before, it was more about large-scale developments. Right now, the focus is shifting towards boutique condos.
On the single-family side, we have nondisclosure agreements with our clients, but I’m working with a client right now in the design phase. They’re relocating from the New York area, and they are seeking a property in Indian Creek.
Funny story: The client came to us originally, and their budget was like $100 million. And we told them it’s probably not gonna be enough. That’s the funny part — they have to increase the budget.
In Indian Creek, properties are very scarce. It’s very hard to find anything, not to mention the right deal.
So $100 million is not enough. That’s shocking to hear. What’s going into these houses that’s so costly?
First of all, the land. In that particular case, it’s around $70 million or $80 million just to buy the land. And the owner originally wanted $100 million. I mean, if you ask me if it’s worth it, as a real estate investor and developer, I would say no. But if you want to be in that location, you will have to pay that much money, right? Just to buy the land.
So when we talk about $100 million, we are close to the cost of the land before we even start with the design and construction and the features.
A lot of those types of clients, the reason they move to Indian Creek Island is you have to get there by a boat or a ferry, right? It’s not like you’re driving to a normal neighborhood. You have to go on a boat just to bring equipment, for construction, for labor.
Aside from the land value, what else is driving costs?
That client is seeking a design feature that will include AI-integrated security. Everything is activated with integration with AI. Wellness is another big theme — red-light therapy, a unique water filtration system, a spa, a gym. Those are in the millions of dollars, all the equipment and security along with the overall design and aesthetic of the architecture.
You’re also raising money from investors. What’s the thought process there?
We had another vertical that we came out with, called MHD Capital. We raised $250 million. That business essentially came from clients that built relationships with us. For years, they were saying, “We love what you do, we want to invest in real estate.”
We used to do a lot of deals in private — friends, famous clients. Now we established the online platform, and it’s open for retail investors.
Jeff Ostrowski can be reached at jostrowski@commercialobserver.com.
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