COVID-19 fraud alert: Criminals may use the Coronavirus outbreak to pose as people or organisation you trust, and could attempt to contact you about your bank account. Find out how to avoid fraud
It was a red-letter day for the residents of Miami’s Liberty Square. After months of redevelopment, they were finally receiving the keys to their new homes. For many of them, it was all too much to take in. The fresh and open layouts, household appliances they’d never had before, and the gleaming children’s play areas made the place unrecognizable. It also now felt secure, thanks to the newly installed entry systems. Time and again, the returning residents were heard murmuring the same question: is this really for us?
Their disbelief was understandable. Liberty Square had suffered more than fifty years of seemingly relentless decline. The development had entered the world as a symbol of hope, part of President Franklin D. Roosevelt’s New Deal to revive the economy from the Great Depression of the 1930s. For a time, what was then the biggest public housing project in the southeastern United States was a vibrant and sought-after place to live. From the 1960s, however, it began to slide.
A decade and a half into the twenty-first century, the development had reached a low ebb. The surrounding neighborhood of Liberty City had become a byword for criminality, particularly gang shootings and drug dealing. Mothers were often too frightened to let their kids play outside their homes. Inside Liberty Square’s homes, it was scarcely more desirable. Dilapidation, mold, and rats were among residents’ most common complaints.
The difference we’re making to Liberty Square is night and day.
Transformation
In 2015, long-overdue change finally arrived. The local authorities committed to a large-scale revitalization initiative costing many tens of millions of dollars. However, they would still need help to realize this transformation. For their development partner, they selected Related Urban, the affordable and mixed-income division of Related, which had been working on similar projects in Florida for almost forty years. The inaugural phase got underway at the end of 2017, with the first delighted tenants taking possession of their new homes in 2019.
Working on affordable housing is probably the part of our business that makes me feel the best inside, reveals Jon Paul Pérez, President of Related. We have often rehabbed public housing buildings whose condition you wouldn’t expect to encounter in a rich country like the United States. The difference we’re making to Liberty Square is night and day. The looks on the tenants’ faces when they return is really gratifying. They couldn’t be any happier.
Along with new homes, the ongoing transformation has brought new people into the neighborhood. Liberty Square has become a community made up of various different income groups, Jon Paul observes. Indeed, it is the very first mixed-income project in Miami-Dade County to combine public, affordable, workforce and market-rate units under one plan. That was a key part of our original proposal and we see more and more evidence that this kind of approach is the only way to solve issues of housing affordability.
Related’s ethos goes well beyond replacing rundown dwellings with new ones. Instead, it seeks to reinvent whole neighborhoods. If you just build new houses, you’re not going to get rid of the underlying problems and things could very easily go back to how they were, says Jon Paul. People also need shops and other businesses to serve them, which in turn brings much needed jobs. We’re bringing a supermarket to Liberty Square, collaborating to introduce a Montessori school and redoing the community center, which we’ll run programs out of.
Culture features prominently within the Related approach to revitalization. Art can play an important part in the neighborhood, hence why we’re trying to get art galleries into Liberty City, Jon Paul continues. My father, who started Related, is extremely into art. So, what you’ll notice about our developments is that art is our signature, whether it’s affordable housing or otherwise.
Luxury in the Sunshine State
While Related started out as a creator of affordable and workforce homes, it is just as renowned nowadays for its other developments. Since its foundation in 1979 – see Jorge Pérez: King of Condos – the group has developed some 100,000 housing units in total, around two-thirds of which are luxury condominiums. Perhaps more than any other single organization, the group has helped to redefine Miami’s sun-kissed skyline.
The transformation of the city’s financial district is a case in point. Over the last two decades, Brickell has evolved from an area dominated by offices to a buzzing destination for shoppers, diners, culture-seekers and, above all, residents. Related is behind a variety of the neighborhood’s most striking edifices, including SLS LUX Brickell, SLS Brickell and Icon Brickell, the latter with its Easter Island inspired columns, Philippe Starck-designed interiors and 300-foot (91.4m) swimming pool.
The same district is soon to accommodate a further trio of towers from Related. Besides luxury condominiums, Baccarat Brickell – perched on the waterfront where the river flows into the bay – will combine an upscale hotel, offices and upmarket shops. According to the company, the development will be its most luxurious to date, with the aim of outdoing itself with the development’s amenities. As the customary finishing touch, a museum-grade art collection will adorn the walls.
Expanding into unfamiliar territories
While almost synonymous with Miami, Related has increasingly ventured outside of its homestead over recent decades. It has done so despite the intensely local nature of the real estate industry. Everything from building regulations to style preferences typically has its own distinctive flavor. Nevertheless, the company has established operations well beyond the Sunshine State, with a presence in Atlanta, the Carolinas, Texas, Arizona and more.
Being a Miami-based organization, we fully recognize that we don’t know other markets in quite the same way, admits Jon Paul. To expand, we believe that having a local partner in each place is vital. We always want to work with someone who really knows how things like zoning and the permits process work. It’s also about having relationships with the commissioners, city hall and contractors. Knowing what things cost and what not to do enables us to avoid making expensive mistakes.
For most of the last two decades, Related has also been crafting homes for people outside of the US. This international expansion began in Mexico, where its luxury condominiums are already to be found in Cancún and Puerto Vallarta, with Mexico City next in line. Subsequent developments have sprung up in Brazil and Argentina. Again, local partnerships are the key.
I can’t go to Mexico and tell them how to build, says Jon Paul. That’s not what our strength is. Related brings the architecture, interior design, sales and marketing. Our goal is to create properties that we feel are better than what has usually been delivered in these countries. We have found this approach to work time and time again. Our branding and reputation enable us to obtain higher sales prices than comparative properties in these locations.
Nevertheless, operating in emerging markets can pose significant challenges, as Related knows only too well. Attracted by the country’s rapid economic growth and its rising middle class, Related entered India in 2010. We thought that even if we could tap into those trends in a small way, we could develop and sell many thousands of units there, recalls Jon Paul. But what we found is that things like bureaucratic barriers make India a very tough country in which to do business.
The cyclicality of condos
As the world seeks to exit the covid crisis, demand for upscale residential real estate remains strong in many of Related’s markets, in the US and beyond. That said, luxury condominiums in particular have exhibited highly cyclical behavior over time. Despite a noticeable shortage of units currently for sale, some skeptics have questioned whether the hot conditions in South Florida will continue.
There’s always been a lot of cyclicality in condos, notes Jon Paul. You can go from being very profitable in one year to not making much the next. But our company is very diversified. We operate across different cities and states, we’ve got the market rate development business, and we’ve got affordable housing. There will always be a need for affordable housing, so that’s a steady business. Our set-up means we don’t have to worry too much if the condo business is slow for a year, because we’ve got two other businesses to keep us going.
But while business may be subject to cyclical swings, the sense of wellbeing is perpetual. We really do get a feeling of joy from changing the way people live in all of our developments, says Jon Paul. Improving things is in our DNA. We can’t wait to expand to even more places.
Jon Paul Pérez: Stepping up to lead
I was born in Miami as one of four siblings. Although our dad was a very busy guy as we grew up, he always made time for us. In fact, he was a very active father, who attended all our sporting events. He was probably the loudest parent on the sidelines during soccer games, yelling to make sure we didn’t turn our backs if they were kicking the ball in our direction!
Probably the reason Dad was able to see so much of us was because he mixed family time with business. After our sports on a Saturday, we’d all drive to his rental properties or his latest building project. At the time, I didn’t really know what he was doing, but we would go get candy from the leasing agents and walk the properties as he inspected the landscaping and construction. So right from the start, we were surrounded by real estate.
Improving things is in our DNA.
When we were in high school, Dad started developing some really high-profile condominiums in Miami Beach and became something of a celebrity. People always seemed to want to talk to him when we went out, which we thought was pretty cool. I always liked the idea of creating a new development, from visualization to putting all the pieces together. So, I guess pursuing a career path other than this never crossed my mind.
My road to Related
After graduating from college, I assumed I’d just go straight to work with my dad at our headquarters. Instead, he insisted I went to New York to gain experience outside of our firm. I spent six years there, putting in long hours, overseeing the development of 900 apartments and helping to obtain capital for our distressed opportunity fund. As the new cycle coming out of the financial crisis era really got going, I went back to Miami.
Over the years, my dad has frequently been the first developer to enter neighborhoods and start transforming them. A while back, I noticed how many people were going to hang out in Wynwood here in Miami. Artists and restaurants were moving in, but the buildings were still generally old one-story industrial warehouses. I figured that some of the visitors would probably like to live, work and play there too.
I went to my dad and explained this, presenting him with a business plan to develop smaller, mixed-use units in Wynwood. It wasn’t an easy pitch at first: he said he didn’t get the neighborhood’s appeal. However, he said I should go ahead with my idea anyway and now we’ve got six deals there, two completed and the rest under construction. I think I’ve now made Related’s mark on a neighborhood that has completely changed from five years ago.
I’m very fortunate to have a strong executive team around me. During the worst of the covid uncertainty, they were all looking to me. My father stepped back and allowed me to lead. He and I would still talk many times a day, but he wanted me to be the person the team went to for direction. I was nervous but I felt a big responsibility to make sure we made it through the health crisis. Under my lead – and with my father’s guidance – we emerged from the uncertainty and are now in a position of strength. The markets we’re in are those where people want to live and invest in.
The fear will always be there to some degree. Previously, I used to manage two or three major projects. Now, I have overall responsibility for all of our projects, staff, budget and direction. So I get a little less sleep nowadays, I’ve lost some more hair and I’m a bit grayer! But I’m very confident in my position having navigated covid, although it’s important always to have humility. You can be the best and plan for downside, but some things are just totally out of your control and you just have to work through that.
My younger brother also works for Related. We’re very close, basically like best friends who do everything together. I want him to become copresident of the company, alongside me. His drive and dedication tell me he’s going to get there. He’s already in charge of some of our biggest projects. I love reviewing floor plans or interior design concepts with him. We challenge each other sometimes, but we always reach an agreement in the end. It’s a fantastic relationship.
The needs are immense and growing.
Jorge Pérez: King of Condos
Growing up, Jorge Pérez called many places home. The very first was post-war Buenos Aires, where his Cuban parents had resettled. When he was nine, his father’s career as a pharmaceutical executive took them back to their ancestral island, although not for long, as it would turn out. The revolution of 1959 saw the company seized by the new government, while the family scrambled for the safety of Colombia. Next, they would relocate to Miami, where they set down roots.
Perhaps it was having lived in so many places that gave Jorge his inspiration for creating homes. Seeing his parents lose everything they had in Cuba also made a deep impression on him. It left him with a powerful drive to achieve security. Having rounded off his studies with a degree in urban planning, he landed a position in Miami’s city planning department. While he found that working for the public sector was somewhat restrictive, the insights he gained were invaluable.
Jorge’s passion for hard work and his practical knowledge of city-making made a powerful combination. At the end of the 1970s, he decided to go it alone. He began by taking on renovation and development projects, focused on affordable multifamily housing in neighborhoods of Miami such as Little Havana. As he bid for contracts, he found himself competing against an up-and-coming developer from New York, Stephen M. Ross. The two rivals quickly struck up a friendship and then formed a business partnership.
As Related grew in stature as a developer of affordable homes, Jorge branched out into new kinds of projects. First came the market rate apartment buildings, then the luxury condos. Demand for the latter in Miami grew strongly in the 1990s, driven especially by Latin American buyers who wanted to live or invest in the place nicknamed as the capital city of their continent. By the middle of the next decade, Related had become the leading developer of luxury condos in the whole of South Florida.
Cultural influencer
Besides helping to reshape Miami’s skyline, Jorge Pérez has had a far-reaching influence on its cultural life. A lover of art ever since his boyhood museum visits with his mother, he became the most prominent patron of the Miami Art Museum. In recognition of his gifts of Latin American art collections and funds, the institution was reborn in 2013 as the Jorge M. Pérez Art Museum of Miami-Dade County. He has also pledged to gift his entire personal collection to the museum after his death.
Such acts of generosity are but one dimension of his giving back. Some years ago, he signed The Giving Pledge, in which he committed to donate half of his wealth to philanthropic causes. It is obvious to me that government cannot solve all our problems, he wrote at the time. Whether it is in education, health or the arts, the needs are immense and growing. It is because of this that it is so very important for us, the lucky few, to contribute our resources to make this a better and more fair world.
