Related Group -- No. 42 on the largest private companies in Florida -- is riding the crest of the downtown development wave with high-end apartment and condo projects in Miami and abroad.
In 1979, Jorge Perez, just starting out as a developer, rehabilitated a small, government-subsidized apartment building for low-income residents in Miami’s Little Havana neighborhood. The building, a 1920s walk-up, had to be outfitted with new plumbing and electrical systems. The renovation also involved adding an elevator to improve elderly residents’ access to the second and third floors. The project took six months and turned a profit of $200,000.
Last month, Perez completed SLS LUX, a 450-unit condo tower in downtown Miami. Among the building’s features: A Katsuya sushi restaurant, one of 14 in the world, along with high-tech elevators that identify residents by their fingerprints and a 59th-floor swimming pool with deck-side cabanas and towel service. The project sold out for a total of $430 million.
In between, Perez rode the condo boom, befriended — then alienated — Donald Trump and worked his way through the recession. By the time he finished SLS LUX, his Related Group had $6 billion in projects underway and more than $1.4 billion in annual sales.
Today, Perez himself is worth $3 billion.
“I had no intention of being a real estate developer,” he says. “In high school, the subjects I loved were philosophy and literature. Business wasn’t even a consideration.”
Motivation
Born in Argentina to Cuban parents, Perez, 68, grew up as the eldest son of a father who worked in the pharmaceutical industry and a mother whom he describes as a dilettante. At 9, Perez moved to Cuba when his grandfather died, and his father started his own business. A year later, Fidel Castro seized power. “My father was forced to give up his pharmaceutical company and all our family holdings and take us into exile in Colombia,” Perez says in his 2008 book, “Powerhouse Principles.”
Watching his parents start over “scared the hell out of me,” he wrote, “But it also made me damned determined.” He credits what he calls the “Cuba fear” for his work ethic. “It drove me to succeed, to work harder than anyone else, to put money away to have security for myself and my family.” He says his mother, though no communist, taught him that corruption and inequality in Cuba had led to Castro’s rise.
Another experience that shaped Perez was living abroad. In the late 1960s, while getting his associate’s degree at Miami Dade College, he was a hippie, he says, with hair past his shoulders. He followed a girlfriend to New York, finished college and spent a year in Europe. There, he was struck by how different European cities were, with people walking to neighborhood bars and restaurants, shopping locally and making do with smaller apartments and no cars. “I really loved that style of living,” he says.
Looking to merge his social consciousness with his perspective on cities, Perez got a degree in urban planning and a job as a city planner in Miami in the mid- 1970s. He found the public sector “constraining,” however. “I remember people telling me, ‘you’re making us look bad; you’re working too much.’ ”
By the end of the decade, he’d left his city job to compete as a developer for projects like the contract to renovate the walk-up in Little Havana. Among the people he beat out for that job was Steve Ross, then a rising player in New York real estate. The two men became friends and business partners, with Ross helping to provide financing for Perez’s projects.
“From our very first conversation, I found Jorge to be engaging, passionate and very focused — and fun to be around. We immediately hit it off,” Ross says.
While Ross’ New York-based Related Cos. owns about 20% of Perez’s Related Group, they operate independently. The “I never thought in terms of money, but it was a way of counting.” — Jorge Perez two remain “very close,” says Ross. “We travel together, talk several times a week, and our families spend time together. We have known each other almost 40 years, which makes it one of my longest relationships.”
Lesson learned
As he branched out from governmentsupported projects into private development, Perez became known for attention to detail and finishing projects on time and on budget. He says he made sure to establish good relationships with building contractors, who, in turn, gave him better pricing and “put their best people on our jobs.” Internally, he created a bonus program tied to company profits to motivate employees to work hard. “You come here at 6 or 7 o’clock at night, and you’re going to see all the developers, accountants and so forth working toward that goal,” he says.
In the 1990s, while continuing to build government-subsidized buildings, Perez tapped into a demand for high-end condos from buyers from South America, who typically fell into one of two categories: Businesspeople who wanted a pieda- terre in Miami or investors looking to rent out their units.
Between the mid-1990s and the mid- 2000s, Related rode the condo boom to become the largest condo developer in South Florida. “We were the golden boy,” Perez says. “Lenders got upset with me if I didn’t give them the financing deal for my next project. They’d fly me on their private jets to their headquarters, and I’d meet and become friends with their chairmen.”
Donald Trump, then a friend and business partner, wrote the forward to “Powerhouse Principles,” saying of Perez: He’s “the one person who could teach me something about real estate.” (Their relationship has since soured — in 2017, Perez, a top Democratic donor and supporter of the Clintons, publicly criticized Trump’s push for a wall on the Mexico border.)
While Perez says he anticipated the market downturn in 2008, he did not foresee how bad it would be. As prices plunged more than 50%, buyers backed out of deals and forfeited deposits, leaving Perez with nearly $3 billion in unsold or unfinished inventory.
During what he considers “the most difficult period of my life,” Perez restructured his debt with lenders, whittled down his inventory and began buying distressed property to position himself for a market rebound. “One of the lessons learned is that we had put too many of our eggs in one basket, and that was the condominium basket,” he says.
Since the recession, Related has become a more diversified company in terms of both the location and types of projects it builds. Since 2010, the company has completed $1.9 billion in government- subsidized and market-rate apartments (vs. $2.5 billion in condos). It’s building high-end apartments across Florida and in Atlanta’s Midtown and Buckhead neighborhoods, and it recently opened a branch office in Dallas to pursue apartment projects in the western U.S.
Steve Patterson, who heads Related’s market-rate rentals and mixed-use division, says the main market drivers are Baby Boomers looking to downsize out of their houses into an apartment because of a job change, divorce — or just a desire to live downtown. “People are tired of being in the suburbs and commuting into the city to do things,” Patterson says.
Meanwhile, Related is building about $4 billion in condos in South Florida, Argentina, Brazil and Mexico. Perez says the company has taken a “more conservative” attitude toward new condo construction, starting projects only after a majority of units have been sold with 50% down payments. Related sold all of its units at SLS LUX at an average price of $750 a square foot.
Easing out
Perez acknowledges that his vision of a thriving, “24-hour” downtown Miami can’t happen without housing options for workforce households. One strategy is micro-units — apartments or condos about 600 square feet or smaller, with a kitchenette and bathroom. In Miami’s Wynwood neighborhood, Related is building two micro-apartment projects where units will start at $1,400 a month. While the units are small, the buildings have plenty of amenities — rooftop pools, fitness centers, dog-washing stations and private dining rooms that residents can reserve for large parties. “We’re going to try to make communal living very important,” he says.
These days, Perez, who has signed a pledge to donate at least half of his wealth to charity, is looking to eventually step away from running the company day-to-day to focus on philanthropy. He’s now grooming his two oldest sons, Jon Paul, 33, and Nicholas, 30, to take over the business. Jon Paul, who has an MBA from Northwestern University, and Nicholas, a former Division 1 college tennis player at Loyola Marymount University in Los Angeles, are part of the company’s executive committee.
Perez lives in a Venetian-style waterfront mansion in Coconut Grove with his wife, Darlene, a nurse practitioner, and their 17-year-old son, Felipe. They have two dogs: An American bulldog adopted from a rescue shelter and a small Havanese named Samson. Eventually, they plan to downsize to a penthouse condo that Related is building nearby.
“I live in a beautiful house on the bay, and I have servants, so yes, I have a very lucky existence,” says Perez. “But I’m not a conspicuous consumption person. Only in the last few years have I given myself the pleasure of flying first class. I guess I’m getting old.”
Recently, Perez was talking to an old friend who used to create marketing programs for Related’s condo projects. The friend reminded Perez how involved he got in every detail, down to picking out the outfits worn by women models at sales events. Perez says he still enjoys the design aspects of developing buildings, but his priorities are changing.
“I want to do other things I think are important,” he says. “I want to travel to places I haven’t been — I want to bike in the Himalayas while I still can — and I want to devote a lot more time to philanthropy.”
About Related Group
Founded in 1979, Miami-based Related has revenue exceeding $1.4 billion. From the early 1980s to the late 2000s, the company built more than 60,000 apartment units and condos. Since 2010, Related has completed more than 10,000 units. It now has 72 projects underway or about to get underway in the U.S., Argentina, Brazil and Mexico.
Projects under construction or due to start soon:
- Project Type Projects Units Value
- Affordable housing 16 2,431 $456 million
- Condominiums 6 2,108 3.4 billion
- International 8 2,533 790.2 million
- Market rental 42 11,250 1.4 billion
Total 72 18,322 6.0 billion
Amenities
Today’s high-end condo buildings typically have resort-like features, including poolside cabanas, spas, tennis courts, well-equipped gyms, trendy restaurants and concierge services. Other amenities include movie rooms with stadium seating, billiards rooms, rock-climbing walls and bowling alleys. Niche, communal spaces tailored to residents’ interests, such as cigar and wine-tasting rooms, also are common. “We want to create a complete environment so that going out and getting into your car becomes less necessary,” Perez says.
Those amenities come at a hefty cost to buyers. Related’s high-end condos typically carry monthly HOA fees of 70 cents a square foot, or $840 for a 1,200-sq.-ft. unit.
Early Love of Art
When Perez was a child, his mother liked to take him and his younger brother, José, a Miami immigration lawyer, to visit art museums. Decades later, art became a way of reconnecting with his Latin roots.
“When I was able to save my first few dollars, I bought a limitededition lithograph, and I wanted to have my walls filled with that. I felt really good looking at art,” Perez says. “At first, I only collected Latin American art, and I went overboard,” he adds, laughing.
In 2011, he donated $20 million worth of Latin American art and another $20 million in cash to the Miami Art Museum, which has since changed its name to Perez Art Museum Miami (PAMM). In 2013, PAMM moved to a new Herzog & de Meuron-designed building near Biscayne Bay.
Perez says he wanted to elevate Miami’s reputation to a “more serious city as opposed to one that’s just sun and fun.” He also saw the museum’s naming rights as a point of Hispanic pride. “There were museums named after Carnegie, Guggenheim and Whitney, but Hispanics, who had played a large role in the development of the country, did not have their name on any major public cultural institution,” he says.
Perez sees art as a component of his buildings as well.
Related paid $3 million for this sculpture by Colombian artist Fernando Botero. The sculpture, called Male Torso, stands near the entrance of SLS LUX, a new condo tower in Miami.
Related employs two full-time art curators who commission paintings, sculptures, murals and other art for each project.
“The art that we pick is not left to a designer who says, ‘Ooh, we have a blue couch, so we’re going to put up a blue painting,’ ” says Perez.
Affordable Housing
Related recently began the first phase of a $307-million, 50-acre overhaul of Miami’s oldest public-housing site, Liberty Square. The project, when completed in five years, will bring 1,572 mixedincome housing units, a grocery store and social services to Miami’s Liberty City neighborhood.
“Rarely do you have an opportunity to redevelop nine city blocks in the urban core of Miami,” says Albert Milo, principal of Related Urban Development Group, the firm’s affordable-housing arm. “It’s a very well-located property. It’s just that the area has been depressed.”
Related also has won a public bid to rebuild a large public-housing site in Tampa’s West River area. Plans call for 1,636 mixed-income housing units and 177,000 square feet of commercial space. At least 820 rental units will be for families who make less than 80% of the area’s median income, and about 60 for-sale units will be for workforce and market-rate housing residents.
“Lower-income people will live in the same complexes” as middle-income residents, Milo says. “A diverse economic base will allow these projects to thrive long term.”
Walkable Waterfront
Perez is pushing for the creation of a public walkway along the western shores of Biscayne Bay in Miami’s urban core. The proposed Biscayne Line would run the entire length of Edgewater, home to several Related condo projects, and link up with other public parks and walkways in downtown Miami and Coconut Grove.
“It’s good for development. But more importantly, it’s good for the city,” Perez says. He envisions something like the High Line of New York or the Atlanta Beltline, with a bay view. “This should be a place where everyone is jogging around,” he says.
Since 1979, Miami has required new bayfront developments to set aside 20 feet of land from the water for public access, bolstering the idea of a miles-long pedestrian path. But unless older developments agree to turn their private land into a public thoroughfare, the walkway will have to be built around them via fixed or floating structures in the bay. While Related has offered to pay for portions of the project, regulatory issues could be a stumbling block.
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