Jorge Perez’s $1 Billion ‘Opportunity Fund’

Cash is King

At Friday’s ULI Conference Related Group principal Jorge Perez announced plans for a $1 billion “opportunity” fund for the purpose of bailing out troubled buyers and expanding assets. Mr. Perez emphasized the scarcity of prime land and claims that the next upswing, whenever that may be, will involve significantly higher acquisition prices–prices that will make today’s per square foot values seem minimal in comparison. In a market where cash is king, he aims to demonstrate that his crown shines the brightest.

Conflict of Interest?

When asked if he would use the fund to acquire mortgages and units in Related Group projects, he quickly dispelled the notion. He did not disclose the fund’s other partner. He went on to say that the next 8 months will be the toughest for the market as most of the construction units are delivered. Within the last six months the fall out (contract walk outs) for Related Group projects was hovering at around 3%, now he estimates that number to be at around 20% with matters likely to deteriorate before they get better.

The Fall Out

Closings in his most high end developments continue to remain strong. He went on to say that his lower end loft developments have not been hit hard by fall out, but the middle of the road luxury condos were being affected. He said that it’s important that during these difficult months Condominium Associations remain fully funded. His fund will help do just that.

Condo Associations Running Low on Funds

The media has seemed consumed with the high foreclosure rates and the growing fall out, but the negative effect caused by operational budget deficits has been mostly ignored. The problem is that foreclosure units aren’t paying maintenance. In most cases, when the bank forecloses on a unit, the Association takes a loss as most of the outstanding funds cannot be recovered. In the case of fall out, developers are left footing the bill for operational costs of unfilled units. To make matters worse, owners in troubled straits barely affording to pay their mortgages are also less likely to pay maintenance. This has led to widespread amenity cuts and a furthering of financial woes for both unprepared developers and troubled condominium associations.

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16 Comments

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16 responses to “Jorge Perez’s $1 Billion ‘Opportunity Fund’

  1. perez

    Are maintenance fees and special assessments available on-line?

    What is the easiest way to evaluate a condo associations finances? is there any type of grading?

  2. BoB

    1. Whether paying or viewing assessment information online is available, depends upon the association and management company. Typically, special assessments come with little more than 14 day notices and 45 days notice before paying.

    2. You can have the seller provide you with a copy of the most recent association financial statements–that’ll have a breakdown of the budget, profit and loss information, delinquency report, etc. These are official records that an owner can procure within five business days of requesting it. Banks review these as part of determining whether to lend to an association. I suggest a buyer do the same prior to investing in one.

    However, in a new construction condo you may have trouble attaining these records because occupancy hasn’t settled and the records are just materializing.

  3. Lisa Enright

    Please buy property at 610 sw tamiami canal Rd. Marked down from 498 thousand to 380 thousand. Lot 50×150 home in good condition.

    owner Ella Enright
    305-261-5528

  4. RI

    I was there for that…

  5. I saw Mr. Jorge Perez today on Univision, and I am very impress with all the things he has done since he left Colombia. What a successful story to share and mainly how humble of man he is. He makes us proud to be Latino, and Colombian.

    Can you tell me he name of the book he just wrote?

    Thank you,

    fernando_quinter@hotmail.com

  6. That’s a long time that for me this will be the first problem: maintenance.
    And not only in the new buildings, but also in every old building where you have too many foreclosures or ARM.
    If our elected “leaders” were clever, they will vote a law to force the bank to pay the arrears and pay on time. After all, they are the ones who lended th emoney at the beginning and allowed too many people to purchase when they shouldn’t have.
    Best regards.
    FD @ Condo Hotel South Beach

  7. Ralph Reyes Jr.

    I am a Realtor / Mtg Broker in Florida. I would like to see a program that can help the home owners that are in trouble with their mtg. I have seen many programs that in my view are put together by Hyenas waitng to see who they can tare apart.

    A 1b investment can put Dade County back on track. Here is how it would work. Buy the NPNs from the Banks at 40-50% then refi the notes for the Home Owner……and this is for home owner occupied residences only. The Refi would be at 75-80% in some cases at market. This will bring down the mortgage payments to affordable numbers and a great Cash Flow for the Investors. These mortgaes can then be refinanced or sold in a couple of years.

    Mr. Perez can you please elavorate on this. Thank you

  8. Bienvenidos, Welcome to a fantastic Real Estate Opportunity ROI Condo Hotel in Charlottesville, VA., Near the university.

    An Exciting New Resort-Condo in the foothills of Virginia’s Blue Ridge Mountains. Two levels of opportunities available, own a single condotel and earn residuel income from vacation rentals turn key ready in 2009.

    Or become a Full Partner with the Developer in an incredible opportunity in a full scale resort, golf and spa ammenities resort.

    Contact Marzia Rivera for details, prospectus and information, visit us online for a glimpse of what is to come. My direct number is 239-540-4884. I would look forward to speak with Mr. Jorge Perez.

    Regards
    Marzia

  9. i have been following this oppurtunity fund and it looks like it will be very intresting. Miami attracts such different types of buyers than we do in Myrtle beach. most of our owners who are in trouble are 100% investors and don’t live in the properties that are being foreclosed on

    • A shout out to those riders. Damn good. I don’t know if it’s the Cantonese, the Han or the Macanese. Whichever. They put my comtume to shame. (Where are most of these riders from? Are they second-tier internationals? Top-tier internationals? All local boys? Most of the riders & management seem to be Caucasian. I guess they aren’t locals, then. How many of the riders speak Cantonese? Or at least Mandarin? Does that even matter these days? I wonder what their team budget/ finances look like? Who are the sponsors?)-g

    • Now we know who the sensible one is here. Great post!

    • BION I’m impressed! Cool post!

  10. JOHNNY LEE

    Dear Sirs:

    My name is Johnny Lee and I live in Baton Rouge, LA.

    I am interested in setting up a casino on the Mississippi River, either in Baton Rouge or New Orleans. I want to purchase a 531′ cruise ship which is equipped with a movie theater, has 9 decks, 550 cabins, casino, lounge, outside swimming pool, private suites, restaurant and a gymnasium. In addition, there is a helicopter pad which can accommodate 3 helicopters.

    Total estimated cost of the project is $16,800,000.00. I am seeking investors to help raise the capital required. You will receive 45% return on your investment 6 months after we open the casino. If you’re interested, please contact me at 225-358-1831 at your earliest convenience.

    All I need at this point is a letter of intent with your pledged amount. I am currently working on getting appointments with the appropriate Mayors as well as the Governor and the Corps of Engineers to acuire the licenses and permits.

    Thank you for your time and consideration.

    Sincerely,

    Johnny Lee

  11. The urban road system is North American ukm the best and most organized of the world. The plates are well distrbuidas and visible to drivers.

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