Prolific Miami developer Related Group has found a second home in Tampa, building both luxury and affordable housing.
When Jon Paul Pérez was a kid nobody ever had to ask him what it was that he wanted to be when he grew up. It was obvious. He wanted to be in real estate. He never considered anything else.
His fondest memories of growing up of are of going to visit properties with his father on Saturdays, after soccer. His dad, Jorge Pérez, was a burgeoning real estate developer in those days.
Jon Paul Pérez got what he wanted.
Today, at 36-years-old, Pérez is president of the Miami real estate development firm Related Group. In that role, which he assumed last year, he’s at the helm of the family-owned company and running one of the largest development firms statewide. He oversees the company’s operations across several divisions, manages land acquisitions and helps find financing for major construction projects the company undertakes. Related currently has about $13 billion worth of projects in development, including several in Tampa.
Jorge, a former Miami city planner, started the firm in 1979 with a focus on affordable housing. In the 40 years since then, Related has built and managed more than 100,000 condominium and apartment units worldwide. Jorge Pérez is worth $1.7 billion, according to Forbes.
Despite the breadth and depth of its work, Jon Paul Pérez says Related remains a family business where conversations inevitably come around to business when everyone gathers for a family meal once a week.
Pérez was in Tampa Oct. 13 for the opening of the sales gallery at the new Ritz-Carlton Residences at 3101 Bayshore Blvd. When complete, the 27-story ultra-luxury residential tower will have 89 residences and 12 townhome-style villas with floor plans ranging from 2,400 square feet to 11,000 square feet. Prices start at $1.6 million and top out at $5.1 million. Construction is expected to begin late this year and to be completed in early 2024.
While in town, Pérez sat down with the Business Observer for a conversation about the development, Related’s plans for Tampa and his future atop this major real estate firm. Edited excerpts:
Talk to me a bit about this project and what it is Related Group does to differentiate itself from other luxury developers?
We had always thought of Bayshore as the most luxurious location in Tampa. You’re just sitting here and looking out the window and you have a beautiful view of the bay. You can see Harbor Island. You’re two seconds from downtown. We saw there was great potential. What we noticed in Tampa is that no one had ever really done a very well-done luxury type product that we pride ourselves on doing. So we brought in the best of class for every single discipline. We said, let’s bring in Arquitectonica, a world class architect and designer. We brought in Meyer Davis from New York, who is a world-renowned interior designer. Enzo Enea from Switzerland, who’s probably the best landscape designer in the whole world. And then we said, what else can we add to this amazing combination of talent? And we said, let’s bring in the Ritz. And why the Ritz? Well the Ritz is known as the best service hospitality-oriented brand in the world. So not only do you have design and amenities, but you also have that service and touch so when you come home you don’t really need to lift a finger. It’s really the epitome of luxury and quality. That was the goal. To build something special that Tampa has never seen and raise the bar – which is what we always try to do with every new project.
You’ve pre-sold about 50% of the project. What kind of marketing and outreach is the company doing to sell the rest and how does this new sales gallery help?
The market was very receptive to us. Tonight we’re opening the sales gallery for the first time for people to see the finishes — the bathrooms, the kitchens and the quality of the product we’re going to deliver. Before this we were selling out of our broker’s office up the street and even just selling through there, people automatically assumed quality because you’re bringing in Ritz-Carlton. Selling 50% over the last 60, 90 days without a sales center, we felt really good about it. We’re hoping to sell out in the next few months.
Affordable housing is a big part of what the company's model. Can you talk about some of the projects you are working on here and why affordable housing continues to be important?
In West River, we’re working (on the development) with the Tampa Housing Authority. We’ve completed about 450 units. That’s affordable, workforce, mixed-income housing and we have another 1,000 or so units in that partnership to go. That’s really where we started. My father came from the city, he was a city planner, and started off in affordable housing because at the time there was very little equity needed, so all of it was financed by tax credit equity or city grants. He continued to do that for about 10 years and quickly became one of the largest affordable housing developers in the country. He then moved into market-rate housing, then condominiums. And what happened was, during the recession, our only line of business was condominiums and there were no more condominiums to develop or sell. What we did is we diversified the company and went back to our roots and created an affordable housing division. We have about 6,000 units under construction, about 2,000 of that is in Tampa and the rest are Orlando, south. It’s a big initiative of the company. We have the Rome Yard (Development Project), which we just won an RFP for. That’s 2,000 units next to West River. All mixed income. From the lowest affordable to the middle-income housing.
Is that the future of affordable housing?
Yes. I think when you just replace affordable with affordable, in 30 years you are just going to have to do the same thing. So, what we’re trying to do is not just do mixed income housing, but to bring in commercial, retail, so there is economic opportunity for the people living in these neighborhoods. So that it’s not just housing. We strongly believe you need to mix in the different uses so that it’s a neighborhood that can prosper and develop on its own with all the residents that are living there.
In terms of development, how is Tampa different from Miami — from price-per-square-foot to the type of clientele? And do you see any way where they may similar?
We are extremely bullish on Tampa. We call it our second headquarters. It’s probably our biggest market outside of Miami. There’re a lot of tech companies coming to Tampa, there’re new businesses coming to Tampa. You see great companies that are bringing the talent with them and with high paying jobs. And their employees are going to need housing. Tampa is extremely pro-business, it’s a very good city to do business in, they want to see the city grow. The difference between Tampa and Miami is you have different buyer pools. In this project, here, it’s mostly locals buying. And the pricing hasn’t reached where Miami has gone. You have a waterfront property like this in Miami, you’re talking $2,000 per square foot. Here, we’re getting close to $1,000. I think there’s a lot more room for price appreciation in Tampa. I think at some point they’re going to be the same.
Do you see any similarities between the housing market in 2007 and 2008 to the market now? And when a market is as hot as this one is, what can you do to avoid the pitfalls?
There’s many differences between now and 2007. One of the biggest differences is the amount of leverage. So, financing from banks and other sources are not as high as in 2007. There was a high level of leverage from banks that required developers and owners to bring very little equity in. So a lot of that growth was financed through debt. We are requiring additional deposits from buyers. Before, in the 2007 cycle, it was 20% deposit and people could also resell the unit prior to closing. So, you were having someone buy a $2 million unit, which they should never have been buying, but they were assuming they could put the money together to put the deposit down, and then flipping that contract for more. Sometimes it’d go from one buyer to the sixth buyer before it was time for the person to close. We don’t allow that, and buyers are putting real equity into the purchase during construction. And you’re having a lot more local buyers than investors.
You are about a year in as president of the company. How have you changed in that time and what lessons have you learned? And does being the son of the founder make your job tougher, more challenging?
It’s been a lot of fun. I was doing a lot of the jobs I stepped into prior to the announcement. My father is extremely involved. He’s still CEO and chairman, and he loves design and the structuring of deals and all the fun stuff. We execute on the vision we see for the company and for projects. What’s happened in South Florida is that we were the beneficiaries of COVID-19. It was a horrible thing to happen, but it was great thing for Florida. We’ve been able to position the company with multiple projects to take advantage of the for sale product, condominium product, multifamily product, affordable housing. We think the future is bright and think over the next 40 years we’ll continue to build great neighborhoods.
And working with family?
Look, there’s no escape, right? My work and personal life are almost the same thing. Whether I’m in the office or on the weekends having dinner at my dad’s house, you talk about personal things almost the same way as you talk about business because the business is our life. It’s fun. There’s obviously highs and lows, but I would say the highs way outweigh the lows. I love real estate and development. So does my brother. I never really thought to do anything else other than probably produce a movie just because it’s similar. Being a producer is similar to being a developer, right? You have the vision as the producer, you hire the architect or the director. You’ve got to get the script. Then you have the talent. Then you have to get the financing. As a developer you sort of have the vision and you hire all the tools you need to create that vision. They’re very similar type roles.
Is that something in your future?
Yeah. For sure.
Where did that come from?
It’s like a cool thing to do. Imagine you produce a movie that goes to Netflix or even the movie theaters. It’s a difficult business, but it seems like something that would be a fun passion project one day.