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| Southern Exposure |
Local Roadblocks
Michelle Seaton
01/01/2008
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Many developers accustomed to the relative ease of working in
the United States have struggled to deal with the local bureaucracies in Latin
American countries. "It’s difficult to build here. You don’t just trot out and
get a construction loan like you would in California," developer Hal Wright
says. "It’s harder for Americans in a Spanish-speaking country to get it done.
The permitting is difficult and erratic, and we have no permanent financing here
in any volume. Most of my buyers pay cash."
 |  | THE RELATED Group’s Icon Vallarta in Puerto Vallarta, Mexico, will
have three towers designed by the Miami-based Arquitectonica. The project is
one of several that the Related Group has in the works in Latin America. |
The solution is to partner with locals who can navigate
projects through the labyrinths of local bureaucracy. In terms of the sheer
number of developments in Latin America, the Related Group is one of the most
aggressive builders in the region, with multiple condo high-rises going up in
nearly every country. CEO Jorge Perez was born in Argentina but raised in
Colombia. He came to the United States as a college student and stayed. Perez
became a real estate developer, originally building affordable housing in Miami
and then switching to luxury high-rises in the ’90s. In the past few years, he
has worked with contacts in Latin America to build a growing empire of new
luxury housing developments in those countries.
Perez’s latest effort in Mexico is Icon Vallarta, a three-tower
project designed by Arquitectonica and Yoo by Philippe Starck that will have 343
units anchored and branded by a W hotel. Prices start at $299,000, and buyers
have the option of putting their unit into a hotel pool. "The prices are higher
than the market; this is a high-end product," Perez says. The second tower was
almost 40 percent sold as of last August. Related has a similar project going up
in Acapulco, and another, with 1,000 homes and low-density villas in
Zihuatanejo, Mexico, is in predevelopment.
 | ONE OF Icon Vallarta’s key selling elements is interior design by
Yoo by Philippe Starck. |
The Related Group also owns land in San Miguel de Allende, a
tourist destination northwest of Mexico City. Here it will build a 60- to
80-room hotel, with 250 condos and another 250 homes surrounding the hotel.
Perez has deals brewing with the Mandarin Oriental in Cabo San Lucas and with
Starwood in Playa del Carmen, and another project in the works in Mexico City.
"We’re busy in Mexico," Perez says with customary understatement, but he
stresses that his knowledge of the culture and his ability to work successfully
with locals have been the cornerstones of Related’s success.
"I know a lot of things are done with friendships and
relationships here, and they are built slowly," says Perez, who spends days at a
time in each location, socializing with politicians and business owners. "That’s
how we’ve seamlessly gone into these markets. We’re not the foreigners
coming in to build a building and then get out of town. Our first building in
any country allows us to build the expertise to get the best local people to
work with us, the best landowners and the best developers. We’re bringing jobs
to these countries and promoting their cities, so the senators and presidents
and mayors are happy to work with us."
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