00:00All right, the Related Group is one of the country's largest real estate conglomerates, a huge presence down in South Florida.
00:07And we had a chance to catch up a little bit earlier today with the CEO and chairman, Jorge Perez,
00:11who talked about the future of the company and the future of the real estate industry.
00:17Since after COVID, we've had huge demands from cities like New York, Boston, actually even California.
00:26And we've also continued to have a very strong South American market.
00:33Miami is sort of like the capital of the Americas.
00:37And our condominium sales, you know, are not in the frenzy of 2020.
00:44But this year, we've already sold around a billion and a half dollars.
00:49We just got some numbers from $300 million in the last 60 days.
00:54So our market continues to be very strong.
00:58You know, we've taken advantage of that market.
01:01And, you know, the number of units that we're building, you know, is not just in Miami, but in Tampa, you know, for a lot of the old West Palm Beach is growing, you know, tremendously.
01:12The new areas like Pompano Beach, you know, are growing.
01:16So we're seeing, you know, an overall continuous growth, both in South Florida and the rest of the markets that we're in.
01:24You've benefited a lot from migration that we've seen out of places like New York City, even Los Angeles, down to other areas of the country, primarily Florida, South Florida, to be specific.
01:36Do you see that trend continuing?
01:38Yes, very much so.
01:41You know, we have a government that is pro-business.
01:44You know, we have a great, you know, not only, you know, not only in South Florida, but the state government is, you know, trying to increase, you know, the population, the businesses and so forth coming to Florida.
01:58So, you know, we're putting, you know, not 100% of the eggs in one basket, but we definitely, the majority of our investments over the next decade will be in South Florida.
02:11We do not see a slowing down of that exodus from older cities, you know, more tax impacted cities, cities with, you know, greater social problems, homelessness and so forth that continue to come down to Miami.
02:29The calls that we've had recently have been, you know, incredible, you know, both in companies, you know, looking to, you know, for office space and coming down and people buying both second homes and permanent homes here.
02:47What is sort of your cost structure look like right now with regards to finding the workers to help build your properties, but also the materials and all the other costs that go into that?
02:57Are you still seeing elevated prices in those spaces?
03:01Yes.
03:01You know, and you mentioned it perfectly, you know, there's two issues, right?
03:06With the increase in tariffs, we're seeing already increases in the materials that we use for construction.
03:14And with the enforcement of immigration, both the actual and the perceived enforcement of immigration has had an impact in the construction industry, not as much as it has in the, you know, for example, the restaurant or hotel business.
03:34But many of our workers are, you know, foreign workers.
03:40We don't do surveys of how many are legal and illegal here, you know, are subcontractors.
03:47But I know a lot of the people when I go there are from other countries.
03:52So we've already seen some shortages on labor supply and, again, some increase in prices.
04:01So, you know, but what it means to us is the existing product, the product that we're selling today, is going to look extremely cheap in the coming years, you know, for three reasons.
04:15You know, the two that we just mentioned, you know, the impact of labor, if we continue, you know, with, you know, the immigration policies, you know, the tariffs.
04:24And finally, you know, you know, South Florida is not like 360-degree cities like Atlanta is, for example, or Kansas City.
04:32You know, we are, we have the ocean on one side and the Everglades on the other.
04:38So prime land is becoming almost impossible to get.
04:42Yeah, most deals today require buying all buildings, condominiums, one by one, you know, in order to, you know, to create a new product.
04:53And that, of course, you know, increases the prices of the real estate tremendously.
05:00Do you think Related Group will expand a little bit more beyond South Florida because of that?
05:04I know your sons have been trying to make some waves of their own as they kind of take the reins of the company.
05:09Yeah, look, we have done that.
05:13You know, we're always looking at opportunities.
05:15You know, we have like seven or eight projects going on in Mexico, extremely successful.
05:20We did just start completing five towers in Sao Paulo, Brazil, which are 95, 98 percent sold.
05:30We finished three towers in Buenos Aires, Argentina, all sold and all have done extremely well.
05:38And we have projects in the Atlanta area, in North Carolina, Texas, you know, both Houston and Dallas, Phoenix and all over Florida.
05:51Right. So.
05:52So, yes, I think the company will continue to expand.
05:55In a lot of ways, you are kind of the embodiment of the American dream, an immigrant who comes here, starts a business, builds it into a billion dollar business.
06:07And I do wonder when you look at what's going on with immigration and other policies here in the United States, is there going to be another Jorge Perez after you?
06:15Is there someone out there in another country right now that can look to the shores of this country and say, I can go there and build the most fabulous life ever?
06:24Unfortunately, I think the answer is yes.
06:27Yes. I think immigration was what it is today.
06:31I probably would have never been to this country.
06:34And many of the people that I know that are very wealthy are foreign.
06:39And they came because of the.
06:43Because of the generosity of this country, this country, I think, has always been a I think it's the most it's the greatest country in the world.
06:50And it's also always been a very generous country.
06:52I am absolutely opposed to the immigration policies that are being executed today.
07:01I don't believe that we should have open borders.
07:05But people that have worked here and have no criminal records and have a history should be given a path towards either permanent residency or or citizenship.
07:17So, yeah, I believe in not open borders.
07:24I think there has to be and this is a big issue, right?
07:27You know, what's what's the right approach?
07:30But I believe that both immigration is necessary for the full development, continuous development of this country.
07:39You know, both, you know, both, you know, the great minds that are coming to the universities in the United States and the labors that we need to do farm work and hotel work and construction work and all the other places that we definitely would have a great need.
07:58And I also believe, you know, we're getting into this, that the greatest thing about this country, the greatest, you know, system in the world, I think, has been the capitalist system, which is a system that says that trade should be without tariffs.
08:16You know, people should be producing what they know how to produce best and cheapest.
08:22And I think tariffs create bottlenecks and inefficiency.
08:30Jorge, in addition to the legacy that you've built for yourself with regards to real estate, you've also done a lot when it comes to arts and the artistic community.
08:38The amount of money that you've donated, the shepherding that you've done over at the Miami Art Museum, all the projects you have at the Tate, et cetera.
08:46I am curious if you can talk a little bit about why the arts specifically was so important to you with regards to a lot of your philanthropic efforts.
08:55Well, I think the arts have made me a more complete person.
08:59They allow me to think in different ways than I think in business and numbers, you know, dollars and cents.
09:05I think the arts, you know, allows me to understand, you know, different cultures.
09:10They allow us to understand the issues that we have in a different way.
09:14So I've always believed that there's no great city without a great museum.
09:18You know, and that's why the arts donation was done for the museum in Miami, which changed its name to the Perez Museum.
09:27In addition to that, you know, over the last decade, we've given over $300 million to, you know, which is a lot of money for us, but to, you know, to nonprofits, not only in the art space, but in, you know, in the environment, in health, scholarships, educational, you know, scholarships to universities.
09:48And I think, you know, I owe to this country.
09:52I think, you know, people that have had the luck to be able to make it, you know, to become wealthy here might believe almost have an obligation, you know, to give back.
10:05And that's, you know, that's very important to me and my family.
10:08We want to try to make it an equal playing field so that the people that come here or the people that are here and don't have the opportunities can be, can have those opportunities.
10:23And I think being exposed to culture and, you know, education, arts and so forth is extremely important to achieve that.
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