Florida's Home Builders
Developer Jorge Perez had to deed two of the three towers at Icon Brickell back to the lender. Ninety-seven percent of buyers walked away from their contracts when the bottom fell out of the market.
"You’re now working three times as hard to get one-third of what you want to get."
— Jorge Perez
That's the bittersweet part. Perez's Related Group deeded two of its Icon towers back to its lenders this year. His financial consolation prize has been serving as the buildings' sales and marketing co-manager (with Fortune International) and keeping ownership of a third 50- story tower that includes a Viceroy hotel. He reports condo units selling at a "rapid pace" at $350 to $450 per square foot. Original prices were more than $600 per square foot.
These days, Related — at 300 employees, half its peak — does property management for 10,000 units and asset workout deals. He sees 10 to 15 proposed asset buys and workouts a week in markets from Florida to Las Vegas. Related still generates "hundreds of millions" in annual revenue, he says. "We're very, very busy. Unfortunately, it's not what you call great busy. You're now working three times as hard to get one-third of what you want to get."
He's returning to his roots with affordable housing rental projects planned for Orlando, West Palm Beach and Miami-Dade. With so many apartment complexes converted to condos in the boom, market-rate apartment developments also are becoming attractive, he says. Meanwhile, he and a foreign investor paid $27.1 million for a controlling interest in a five-acre Fort Lauderdale beach site. He plans a mixed-use project including a hotel. "We'll wait for the market to tell us when it's ready." He has a condo project in Mexico and another there and in Colombia under consideration. He also is looking at a "platform" for middle-income buyers in India.
"If you're in real estate, you have to be pretty stupid not to think there's going to be ups and downs," he says, but he never expected 97% of Icon Brickell buyers to abandon their deposits and walk on their contracts. "I was never about the profit. I'm more attracted to the excitement of doing business and creating the buildings. From that standpoint, it's not as enjoyable as it used to be."