Billionaire developer Jorge Perez walks into his firm’s latest project, a swanky new apartment tower at the water’s edge in West Palm Beach, and immediately begins inspecting the lobby.
Perez, who founded Related Group in 1979, makes no bones about being hands-on. The real estate business is all about the details, he told CoStar News while sitting in a conference room in the newly opened Icon Marina Village that his company just completed.
In the first 15 minutes inside the building, “I probably got two pages of things that I think are absolutely wrong and I’m going to be changing,” he said with a smile and tone that manages to combine lightness with seriousness. “I don’t give a s--- how much it’s going to cost.”
This is what slowing down in the development business looks like for the 73-year-old after handing day-to-day operations to his two eldest sons John Paul, or JP, and Nick over the past two years. Perez said business is a third of what he’s doing now, with the rest of his time devoted to philanthropy and his life-long passion for art collecting.
Yet, his suggestions while walking around Icon Marina Village also show that the Related Group chairman still wields decisive power even in his limited role as the company heads into a slowdown in the multifamily industry across the country.
Focusing on details such as where to put art, a tree or whatever design element he believes makes a place better has been his approach in a career that includes building some 80,000 apartment and condominium units ranging from affordable housing to super luxury.
While much of the focus has been on South Florida, the firm has been spreading to other parts of the country. Atlanta and Tampa are the company’s second-largest markets, and it’s been expanding into North Carolina, Phoenix and Texas cities Dallas, Houston, and Austin. Denver is on the radar.
“We see great growth in those markets right now,” Perez said.
Becoming a Billionaire
Forbes lists Perez’s net worth at $1.7 billion. That’s considerably more than he earned as economic development director for Miami before launching his real estate firm.
He teamed up with Stephen Ross, who had founded New York-based real estate development firm Related Cos. in 1972 and later became a billionaire as well. Ross, who also owns the NFL’s Miami Dolphins, is worth $11.6 billion, according to Forbes.
They were partners for decades but in recent years have operated as independent companies and the families remain close friends, according to a spokesperson for Related Group.
Related Group started by developing affordable housing, something it continues to do to this day. One of its biggest projects is Liberty Square, developed in the 1930s with federal dollars. The redevelopment began in 2015 to build workforce housing.
But Related Group also ventured into condos and became one of the biggest condominium builders in South Florida, notably Miami. Condo development grew more luxurious with such projects as one on Miami’s tony Fisher Island and a planned 61-unit project in Bal Harbour, a village on the Atlantic Ocean across Biscayne Bay from Miami. Home prices in the Bal Harbour development start at $8 million.
And the market rate apartments have reached luxurious levels as well. Penthouse units in Icon Marina Village fetch $30,000 a month.
Through the decades, Perez became one of the largest collectors of Latin American art. A significant player in Miami's art scene, Perez helped fund the city's premier art museum that now bears his name.
Art is even a central part of the interior design in multifamily projects, with museum-quality art hanging on the walls in the lobbies. Related Group has employed an art curator for a decade.
Perez’s passion for art as well as fundraising for former President Bill Clinton landed him on the National Council of the Arts, which advises the chairman of the National Endowment of the Arts, in 1994.
“Art makes people’s lives better,” Perez said.
Perez's support of the arts has benefited South Florida communities, public officials said.
"His contributions have been indispensable in helping to establish our community as one of the most diverse and exciting new cultural centers in the world," Michael Spring, director of the Miami-Dade County Department of Cultural Affairs, said in an email. "Perez deeply understands the importance of supporting artists. Great communities are made so much greater by kind, thoughtful and generous people like Jorge Perez.”
Navigating Tough Times
Perez moved through a crowd of local luminaries, real estate brokers and local art patrons to celebrate the opening of Icon Marina Village. He's in his element.
Sons JP Perez and Nick Perez, however, stand out differently than their father. They tower over him and most everyone else in the crowd.
Jorge Perez’s sons and senior management team will largely guide Related Group through the expected downturn. But the elder Perez has seen the ups and downs of the business where there’s “lots and lots of development, then everyone gets scared” and construction eventually dwindles.
Real estate firm CBRE recently projected that the addition of 716,000 multifamily units over the next two years will cause a short-term oversupply. Construction probably has peaked because of inflation and supply chain disruption driving up construction costs, according to CBRE.
The addition of new units will be limited by the beginning of 2025 and will “ultimately lay the foundation for a healthy market throughout the next cycle," Kelli Carhart, CBRE’s leader for multifamily capital markets, said in a statement.
Perez said his company’s business isn’t slowing as much as “it’s just readjusting” so it can pounce rapidly when the market begins to move upward again. That includes buying land and waiting.
“I want to be the first one out there” when the market shifts, he said. "We are constantly looking at supply and demand."
The company has nearly 30,000 apartment and condo units under construction or about to start in the U.S. as well as in Brazil, Argentina and Mexico. Perez said 95% of those are in the U.S.
Lifestyle Attracts Residents
During much of the pandemic, Florida’s apartment market has been the strongest in the country, fed by an influx of people. Last year, Florida led all states in net domestic migration with nearly 319,000 people, according to U.S. Census Bureau data.
Perez said Florida will continue to be a strong multifamily market because of weather and lifestyle, which has driven migration to the Sunshine State for decades. But it also will be driven by what he calls “COVID syndrome,” where people want open spaces in case of another pandemic, and social and economic decay in northern cities.
Controversies over Florida Gov. Ron DeSantis’ moves on social issues won’t keep people away, according to Perez.
"If you judge him from an economic standpoint, he’s one of the greatest," Perez said of the governor. But his stance on immigration and education isn’t what Perez would desire, and there could be more money for affordable housing. “But you can’t have it all,” Perez said.
DeSantis may end up running against former President Donald Trump, who had been business partners with Perez on deals over the years. Trump contributed the forward to Perez’s 2008 book “Powerhouse Principles — The Ultimate Blueprint for Real Estate Success in an Ever-Changing Market.”
Trump said in the forward’s opening sentence: “The one person who could teach me something about real estate is Jorge Perez.”