Related Group’s JP and Nick Perez On Earning the Success in Succession

Going deep with the next generation at the biggest condo developer in South Florida


Related Group is known as Florida’s biggest condo developer, but that’s just the start. The company, founded by Jorge Perez in the 1980s, is also one of the state’s largest builders of multifamily homes and affordable housing (in which Perez got his start), with a flourishing international division that develops high-end hospitality and condos throughout Mexico and Latin America.

Perez is a towering figure in South Florida, a titan of the industry, an avid patron of the arts, and a part of the Cuban exodus that was so formative for Miami. His two oldest sons, Jon Paul (J.P.) and Nicholas (Nick) Perez are leading the company alongside their father after taking broadly similar paths to the family business: college, an MBA from Northwestern’s Kellogg University School of Management; several years of exile in New York for a crash course in real life, including stints at their then-
sister firm Related Companies; and ultimately being accepted by the elder Perez to take a role at Related Group. 

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In 2020, J.P. became president of the company, while the 71-year-old elder patriarch took on the title of CEO and chairman. In 2022, Nick became president of the company’s condo division, the most prominent and valuable part of the brand. Related’s current condo pipeline includes some of the most hyped projects along South Florida’s coasts, with exclusive projects in Sunny Isles and on Fisher Island, the upcoming uber-luxury St. Regis and Baccarat in Brickell, and the Nomad in Wynwood to cater to young professionals. 

Commercial Observer spoke with the two thirty-something brothers in late May about the goings-on at Related, the Florida condo market, lessons from the last downturn, and whether there are any parallels between their family and the HBO hit “Succession.” 

The following has been edited for length and clarity.

Commercial Observer: So nice to meet you both in person. Where to start? How about we just start with: What are you guys busy with this week?

Jon Paul Perez: What are we busy with this week? At Related, we have three, almost four divisions. One is international; we’re developing a lot in Mexico.

Hospitality or multifamily?

JPP: Condominium, hospitality. So some mixed-use with condos above hotels, some stand-alone condo projects, some pure hotels. And that’s probably about 1,300 units, $2.2 billion of value. 

We have another division, Related Urban. That’s the affordable housing, workforce housing division. That has about 12,000 units under construction in the pipeline. And that’s mostly South Florida-based — Dade County, Broward County, Palm Beach County, in Tampa. We’re also looking at other markets in Jacksonville and in Atlanta. 

The third division is our multifamily rental business. We develop all throughout Florida, Georgia, the Carolinas, Texas and Arizona. That’s almost 13,000 units, about $6.5 billion of value. 

And then our fourth division is the condominium division, which is strictly in Florida from Jacksonville, Tampa, Palm Beach, all the way south down to Miami. That’s about 9,000 units and about $15 billion of value. So, what are we busy with today? A lot, right? In total that’s almost 30,000 units, maybe more.

I heard you just broke ground on one of your projects.

Nick Perez: The Casamar just broke ground yesterday; we’re 90 percent sold there within a year. That’s our second project in Pompano [Beach]. We’re delivering our first one [Solemar] in a couple months, just up the street. We saw the success of that and so we were able to acquire the second project in Pompano just over two years ago. It’s pretty great to do a groundbreaking when you’re almost sold-out already.

JPP: Just to focus on the condo stuff: We’re doing a lot of branded projects with five-star hospitality companies. We have the Nomad in Wynwood, which is 60 percent sold. We have the St. Regis Brickell, which is about 50 percent sold. We just recently launched Rosewood Residences in Hillsboro, just south of Boca — 12 acres on the beach and Intracoastal, a beautiful project. Baccarat Miami is 95 percent sold. We’re breaking ground in the next 30 days. We have Fisher Island — that’s 50 units, $1.2 billion in sales value, about 50 percent [sold] and we’ll break ground in January. 

For the Nomad, which is the Manhattan hospitality brand’s first condo project, did you approach them? Did you have in mind a brand that you thought matched the location or did they come to you?

JPP: We always approach the brand. We study, we figure out who we think our buyer is, and then what brand will resonate the most with that buyer.

So who’s the Nomad buyer? It seems a bit distinct from the others which are all…

NP: Super five-star luxury.

JPP: They are smaller units. Nomad’s a 500-square-foot average. So it’s young professional, cool, hip. There’s going to be the Nomad Bar upstairs, we have a Casa Tua on the ground floor, which is a really cool food hall. And they’re condos, but you’re allowed to rent them by the night. So it’s more of a short-term rental product that appeals to an investor that just wants to rent it and get income. It appeals to a young professional who wants to come and…

NP: … as a pied-à-terre.

Speaking of Nomad, you’ve both spent time in New York and live here now, and grew up here. What would you each say is the biggest difference between Miami and New York?

JPP: I was just in New York last week and I can only be in the city for two days. New York is very hectic, high-strung, a place that there’s really almost no escape, right? You’re in this concrete jungle and honking horns and traffic everywhere. Even though people say traffic in Miami’s bad, it took me an hour and a half to get from 33rd Street down to the Seaport.

Miami is obviously a better climate, better tax environment, a pro-business environment. And the quality of life here is just hands above New York City. You have more open space. Now we have a lot of different pockets of neighborhoods that have really sprung up. We’re getting closer to New York on the cultural side, and also the entertainment side, like food and beverage, without having to be in that concrete jungle. 

NP: Especially for families with kids, it’s easier to get to school. You get a lot of outdoor space, a lot more activities that are right at your fingertips. You have the water, the parks are easily accessible. The lifestyle and the environment for families, I think, is much better than New York.

Did you like anything about living in New York? 

JPP: I loved it when I was there from 22 to 28, right? So, out of college, you’re there with that same cohort that is hungry to learn, hungry to figure out what you’re going to do in this world. And, if I had a son today that was 17, 18 years old and thinking about where to go, I would probably push him to go to New York — for sort of training. And then … I couldn’t wait to come back to Miami and just get out of that.

Did you guys overlap at Related Companies as well?

NP: When I came to New York, J.P. and I  were roommates. He was working at Related Companies; I did two and a half years of lending and equity investments, and it just so happened when he left I moved over to do development because ultimately I wanted to come back here to work for the family.

What projects did you work on at Related Companies?

NP: The largest one was 15 Hudson Yards. It was the first residential building connected to the culture shed. So I was part of that team, from putting together initial underwriting budgets to buying out the construction, to seeing it go vertical. I left [in 2019] before we topped out the building, but that was a great experience.

During the last economic turndown, were you guys working in real estate yet?

JPP: I had just started. I started my career in September 2007, so I had a year, basically, when everything was rosy. And then in September 2008 everything went sideways. So I experienced a global financial crisis, but I wasn’t part of this company — I was with Related New York, which didn’t have the exposure like we had down here.

NP: I was a sophomore in college, doing what college kids do. But this is a family company and I talked to my dad every day. And, speaking to my dad every night, it was hard to hear that. … Our exposure was pretty much 100 percent condominiums. But we came out of that. And that’s why we have three or four separate verticals. So we’re, we’re kind of …

JPP: Diversified. 

NP: Very diversified. Thank you.

Since your father was the one dealing with the fallout, what are the lessons he taught you to take from that downturn besides diversification?

JPP: Conservative leverage. Back then, banks were throwing you 110 percent of the costs, so you basically had no money in, but we also had huge guarantees. So managing your amount of leverage, managing the amount of recourse, always continuing to hold a very strong cash balance so at whatever point you can always hop into opportunities. I think we’ve learned that and continue to practice that very well given the state of the company today with what’s going on — very conservatively leveraged, very strong balance sheet, very limited recourse.

NP: Also, we have more deposits now from buyers, so by the time we top off the building it’s a minimum 30, sometimes 40, sometimes 50 percent, depending on where you are, what submarkets. So, there’s much more implied equity, more skin in the game. And people aren’t trading contracts anymore. We don’t allow that until you close on your unit. So that’s helped with stability in the financing of the condos.

I read that Related doesn’t allow people to buy too many units at once in order to weed out speculators. But other than basic skin in the game, how do you know who your buyers are?

JPP: Yeah, the rule is one unit per buyer. Sometimes we will amend that rule if someone wants to buy one for his kid and one for another kid. We do a little underwriting to make sure it’s not just a pure investor that is looking to just flip this right away. 

Like Nicky said, before, a buyer would put up 20 percent of the contract price, and by the time the building was finished it was on the sixth buyer. And then that sixth buyer never closed on a contract. Now, once you sign a contract, it’s not assignable until you close.

In this lending environment, more equity is going into projects as lenders pull back on leverage. Is that a dynamic that you’re seeing either on your projects or more generally in the market?

NP: It’s actually easier to finance a condo right now than a multifamily deal, which used to be the reverse, right? In condominiums, you have the benefit of pre-selling the project. A lot of the financing that comes in with the condominiums is not typically 100 percent from your typical banks; it usually comes from funds like a Madison Realty, or a Ladder Capital or something, which is a little more expensive. But there are more people that show up to finance those deals, just because of the pre-sales; you’ve already proven that market. 

On the rental side, you’d get 65 percent leverage. Now, that’s almost coming down to 55 percent. And that’s what we’ve seen across all of the markets we’re in. So, yes, you have to put more equity down, and, yes, the lending has kind of crammed down on the loan-to-value, but with credible borrowers we’re still able to get projects off the ground, albeit with a little more equity upfront.

Even in this environment, you said the big banks and institutions are coming down here. What kind of investors and institutions do you mean?

JP: All the big funds, right? The private equity funds; the big funds are mostly based in New York. They may have one or two guys down here that are running acquisitions for them. But the head guys are up there. And our partners, they come down here every couple of months for project updates and to go through a deep dive of what’s going on, what’s the status.

You’ve seen more and more focus on South Florida because the opportunities are more here now than New York. And I don’t see that slowing down in any way.

J.P., you became president of the company in 2020, officially taking over the day-to-day management from your father, who is the CEO and chairman. At the time, and even before, there was a lot of discussion of succession — and I’m curious, your father is in his 70s, and, I mean, that’s not that old. 

JPP: He’s 74.

NP: He’s not that old. He’s here.

Right. So why has it been such a topic of discussion given that he may be around for a long, long time?

JPP: You always want to have a succession plan, right? If you don’t, and when it comes down to that time, if you haven’t planned for it, then it’s a mess. I mean, he is still CEO and chairman. I’m president of the company; Nicky’s now president of the condo division, so we’re all still working, obviously, with him. Nicky and I are very involved day to day, and my father is less active day to day, but still very involved. He knows everything that’s going on. We all make decisions together on new projects, new investments. We come up with ideas together about St. Regis, and should we use Rockwell? Should we use Yabu Pushelberg? What markets should we go into? So he’s still there. It’s just setting up so that at some point in the future…

NP: … It’s easy.

JPP: It’s a big deal because it’s a big company. He’s a very successful, recognizable guy in the real estate world, and we’re by far the biggest real estate developer in Florida. So it’s news, it gets people to read the paper.

NP: Have you seen “Succession”? We’re producing one for us…

Ha, I was actually going to ask if you’d watched it, and if it resonated at all?

NP: Our dad hates it!

Oh, really?

NP: It doesn’t resonate at all, but we like the show because it’s actually a very good show: good character development, the plot is very good. I told him to watch it, and then he watched the first episode and he comes into my office and he’s like, “I don’t understand this. Are you telling me that I’m an asshole and I should give the company to your sister and not you two?” I was like, “I didn’t think of that.” But it’s a good show.

You have a sister and a younger brother who’s 19, right?

NP: Yeah, an older sister. She’s very involved with our family philanthropy, helping underprivileged youth. And then our younger brother, he’s going into sophomore year at Wake Forest.

Does he want to join the company as well?

NP: He’s a free spirit right now. He’s enjoying college and, you know, he’ll find a path.

So, your father has this whole backstory — he grew up in different places, he’s an immigrant, etc. You two were born here and grew up after your father was already very successful. How do you think that shaped him versus you? 

JPP: It’s two completely different ways of growing up. He grew up in a wealthy family that had everything taken away when Castro came to power. He moved to the United States with nothing, got college scholarships and lived the American dream. He was able to go to good schools, get a great education, build a business, and become very successful. 

We never had to go through any of that. And I think we’ve always lived a very modest life, right? We didn’t grow up spoiled little kids. We obviously lived in nice houses, we had nice family vacations, went to nice private schools, and never had to worry or think about the kinds of things he had to think about. So, very different upbringing — but always the same values: that education is the most important, family’s the most important, and that you have to work hard for your success. 

It was always instilled in us that you need to get good grades, you need to go to a good school, you need to get a good job. And then if you do all of those things, you may have the opportunity to come back and work for the family.

Was your Cuban heritage something that was important in your lives?

NP: My father met our mother at the University of Michigan. Our mom is a 6-foot-1 blonde from Michigan, pure American Midwestern. Her father worked for General Motors. So imagine her bringing home this long-haired Hispanic with hair down to his waist with a beard and everything… 

Living in Miami, most of our friends were Hispanic, so you pick up Spanish. It was mostly English at home because of my mom, but we’ve always been around the Latin community. I think we consider ourselves Latin. Some people say we’re not, but, no, we are. It’s part of our past, and it’s a part of us. It’s important to connect with that.

Do either of you have an interest in art the way your father does? 

JPP: We both like art, we appreciate art, and we are slowly building our own collections.

NP: It’s very hard, especially in his shadow, for art. He spends a third of his time on real estate, a third of his time on philanthropy, and a third of this time on art. So when he’s not doing real estate, he’s looking at auctions and researching artists; it’s one of his passions. Like J.P. said, we enjoy art. I enjoy going to museums when I’m in New York, I always love visiting PAMM [Perez Art Museum of Miami] when they have a new collection. I’m starting to buy here and there, but nothing compared to him, nor do I think we have time to do all the research that he does.

Company-wise, we have two full-time art curators. The office is like a mini museum in here with the rotating collection of his, and so art has been part of our DNA and it always will be. 

I’m sure you get this question a lot too, but I have to ask it point-blank: What’s it like working in your father’s shadow?

JPP: He’s Jorge Perez, he built Related.

NP: He’s a titan of industry.

JPP: But for me, I don’t let it intimidate me. I am my own person. I also want to be successful, I look at it like that. I never think like, “Oh, am I doing enough that my shadow is going to get outside of his shadow?” Because, at the end of the day, it’s a family business, so whether it’s Jorge Perez, Nick Perez or Jon Paul Perez, I just want it to be known as the Perez family and Related.

NP: I can’t go after that. That’s good. That was really good.

Well, then, I can ask you, what is it like being the younger brother? Now you have two shadows.

NP: I’ve always looked up to Jon Paul. Growing up I annoyed him, but as we [grew up] and we were roommates in New York, we became best friends, and now I see him more than my family. I mean, he is my family! But it’s great. We have ideas, sometimes our father doesn’t like them; he has ideas, sometimes we don’t like them. But we always leave a meeting with a path forward.

Does he listen to your opinions?

JPP: Yeah. 

NP: More and more. But it’s good. It’s family time, here in the office. And we see each other at least once on a weekend and business always comes up. It’s a family business so we’re never not talking about it.

Work life balance is different when …?

JP: There’s no distinction. Life is your work and your work is your life, and your family. …  It’s all one.