Viceroy Brickell: the 7% leaseback and the math it actually delivers

In May 2025, the Viceroy Brickell published to the broker channel a leaseback program at 7% annually on the purchase price, with quarterly payments and a fixed twenty-four-month term. The structure is simple and, within the pre-construction segment in Brickell, is one of the few that delivers contractual income from day zero.

The program attracted significant attention from international buyers. Z Group received more than fifty inquiries about the Viceroy in the first six weeks after the announcement. This essay covers the structure, the underlying math, and the elements the contract resolves versus what remains open.

What the program does

Mechanically, the program operates as follows. The buyer acquires a unit in the Viceroy Brickell at the agreed price. After closing, the building operator (the Viceroy brand, operated under license by the local developer) enters into a direct lease agreement with the owner, for a twenty-four-month term. The monthly rent is fixed at a level that totals 7% of the purchase price over the year, paid in quarterly installments.

During the twenty-four months, the operator runs the unit within the Viceroy hotel pool, generating short-term rental revenue. The owner receives the fixed rent regardless of the actual occupational performance. At the end of the twenty-four months, the program ends. The owner has three options: renew with the operator under terms to be negotiated (likely based on the building's historical performance), operate the unit independently, or hold as a second residence.

The unit enters fully furnished to the program's specification, defined by the operator. The monthly maintenance fees (HOA, taxes, insurance) are paid by the owner, not deducted from the guaranteed rent. The gross return is 7%; the net return depends on the maintenance cost of the specific unit.

The math of net return

For a USD 1.2 million unit at the Viceroy, the contractual annual rent is USD 84,000. In quarterly payments, USD 21,000 per quarter.

Typical monthly operating costs: HOA (USD 1,400 to USD 1,800 depending on unit size), property tax (about USD 1,500 monthly based on the Miami-Dade rate of approximately 2% on assessed value), homeowner insurance (USD 200 to USD 400 monthly), and operator management fee (generally embedded in the program). This does not include the hurricane insurance which may be required depending on the unit's location.

Annual math: USD 84,000 gross rent. Less USD 39,000 in operating costs. Approximate net return: USD 45,000, or 3.75% of the purchase price annually.

That net return is the number to compare against other asset classes. The U.S. ten-year Treasury was trading around 4.3% annually in April 2025. Brazilian CDBs net of tax operated between 7% and 9% annually in reais. For the Brazilian investor who is dollarizing, the relevant comparison is with the Treasury or with conventional residential rental in Miami, which operates historically between 3% and 5% net return.

The Viceroy return is not disproportionate. It is in the range of conventional residential return, with the advantage of contractual predictability during the program period.

What the program answers

Three things the program addresses directly.

First, it eliminates vacancy risk in the first two years. For the investor who has historically struggled with managing rentals remotely, this is a real friction reduction. The operator delivers the rent regardless of who occupies the unit in any given month.

Second, it eliminates operational management. For the international investor, finding a reliable property manager is a real problem. The program bypasses this problem for two years, and gives the investor time to evaluate whether to keep the existing operator after the initial period.

Third, it delivers cash-flow predictability. For investors whose thesis was Miami exposure but who were stuck on operational uncertainty, the program transforms the exposure into something closer to a fixed-income instrument, during the program period.

What the program does not answer

Three things the program leaves open.

First, what happens in year three. The program ends at twenty-four months. After that, the owner faces the same operational questions any residential investor in Miami faces. The renewal of the program by the operator, if it happens, will be at terms based on the building's actual performance, which could be better or worse than the initial 7%.

Second, the market value of the unit after two years. The unit's appreciation or depreciation during the program is not covered by the structure. If the unit appreciates, the owner benefits. If it depreciates, the guaranteed rent does not offset the capital loss. The expected appreciation analysis for the Viceroy specifically depends on the building's position within Brickell, the hotel operation, and broader market conditions.

Third, the tax treatment. The rent received is taxed in the U.S. under short-term rental rental rules, and in the investor's country of origin under its own rules. For the Brazilian investor, the annual rent of USD 84,000 enters carnê-leão if the unit is held by an individual, or under corporate structure if held by an LLC or offshore holding. Efficient treatment depends on the structure, and tax optimization can shift the net return by up to one percentage point.

When the Viceroy makes sense

The Viceroy structure responds to a specific investor profile. The investor who wants Brickell exposure, wants predictable income for two years, and wants operational simplicity in the first years. It does not substitute long-term analysis of the building, the operator, or the neighborhood, but resolves the friction of the first two years.

For the investor with a longer horizon (five to ten years), the Viceroy unit remains an option, but the decision rests less on the leaseback program and more on the appreciation thesis. For the investor with a shorter horizon (three to five years), the program can be the factor that makes the deal closeable.

Z Group represents buyers at the Viceroy, and the first question in any conversation about the building is about the horizon. Without that, the leaseback structure is not evaluable. Welcome home.