Powerhouse Principles

Jorge Perez shares insights
and secrets to success in his new book

By Carlos Alfaro

As a person, and especially through his works, Jorge Perez slowly becomes ubiquitous in the cities he touches. This is especially true in Miami, where he started an entrepreneurial career that today produces over $2 billion in revenue. In the past 30 years, the billionaire real estate developer has revitalized neighborhoods, shaped the skyline and become a household name. He rarely walks by unnoticed in this city; as he leaves the bayside headquarters of his company, The Related Group, in downtown Miami during lunch hour, sharply dressed executives turn to greet him as he walks for this interview at the chic Il Gabbiano restaurant, one of his tenants. Perez sounds both pleased and relieved to comment that the restaurant is doing very well.
They say 60 is the new 40—and at 58, the drive and passion Perez is known for show no signs of waning. The real estate slump, which he fully acknowledges has strongly affected South Florida, has sharpened his focus. In response to the downturn, The Related Group has been steadily extending the reach of its investments, both nationally and through central and South America.
Born in Argentina in 1950 to Cuban-exiled parents, Perez relocated to Colombia with his family after Fidel Castro’s rise to power in 1959. In 1968 he left his family and moved to Miami. After completing his master’s degree in urban planning he worked for the city of Miami for three years before co-founding The Related Group with Stephen Ross. Now, 30 years later, with a wife and two kids, he has an estimated net worth of over $1.2 billion and in 2006 ranked as No. 645 on the Forbes list of the world’s richest people. Yet he remains approachable, with a down-to-earth personality and candidness that make him a pleasant to talk to.
His strong interest in art has prompted him to make generous donations to art museums in the U.S. and abroad. In some of his more recent projects, his artistic sensibilities can be seen in his partnerships with big names in design such as Philippe Starck, with whom he is creating stylish condominiums.
The word retirement seems to be totally unfamiliar to him. He considers himself to be in the most productive years of his life, which is why, when he was approached by a publisher to write a book about himself, he was reluctant. He feels his story is still very far from any ending a book would be expected to have. As it turns out, Powerhouse Principles, his new book, is far from being another book about the life of a billionaire.
With personal stories and anecdotes, detailed insights from inside his company, and pithy bits of knowledge in the form of key business philosophies, guidelines and aphorisms, Perez generously shares the most important lessons he’s gathered during three decades of successful work in real estate. Powerhouse Principles is interesting and useful, yet easy to read and benefit from. The basic principles and rules on how to run a business and undertake projects through their successful completion are valid for any kind of industry, making the book an excellent read for entrepreneurs in any field that requires decision-making and risk-taking.
Despite his enormous success, which is underscored by his Hispanic background, his goal is not money. He has found a way to balance his family life with his long work hours by traveling with his wife and children when visiting his projects and spending the weekend with them. His real goal and what drives him to excel in his work is the legacy he will leave. Besides the teachings to his children and his book, Perez wants his work to transform cities in a positive and lasting way.

HE: You’ve worked with Donald Trump on some projects. What have you learned from him?
JP: What I’ve learned about from Donald is marketing. Besides having a tremendous sense for what is going to be good and what is going to sell, he has a great marketing mind. Through time we’ve become very good friends; we often discuss different things like the economy, where it is headed and how we’ll respond to it. But I think what he’s keenest at is marketing; he is the best brand in real estate. Through the history of real estate I don’t think there has been a person that is more associated with luxury real estate than Donald. Here he has done that, and he has marketed himself better at than any person I can think of.

HE: What changes did you notice in the way people treated you as you became wealthy?
JP: I think wealth carries a tremendous amount of deference; people are more polite, they try to do more things for you, you get invited to more places and it’s even good for business because money brings money. But from a people point of view, one tries not to lose the person that you are because it’s very easy to become enamored by the new people that are around you. The treatment on a personal basis becomes different, particularly in places like Miami which I think is a very materialistic society, more so than maybe many other cities. From a business point of view, [having achieved success] makes it a lot easier to continue to do business; instead of me having to constantly search for deals, once you have the reputation and money behind you, a lot of people search for you instead of you having to search for them.

HE: Is real estate still a good a way to build wealth?
JP: Yes, it is still a very good business. You just have to treat it differently when it’s going up than when it’s going down. It’s still a very good business because now there are tremendous buying opportunities in a down market.

HE: Best and worse cities to invest in real estate today?
JP: Today in the United States one of the best cities is probably New York, which has suffered the least from the downturn in real estate and has remained viable as a real estate market. The ones that have been hit the hardest, I would say, are first southwest Florida, then Miami, Orlando, Atlanta, Las Vegas and Southern California.

HE: Are you interested in growing international real estate markets like Dubai?
JP: I don’t have interests in cities like Dubai, [but] not because I don’t think it is a tremendous growth area where people are making a lot of money. The same is true for China, for example, and India. Nevertheless, the flight requirements and the language barrier make it much easier for me to concentrate in Latin America, which I think are very high growth markets also. [It makes more sense] than to go all the way to China and India and Dubai, where I don’t speak the language and am not familiar with the customs.

HE: If you hadn’t gotten involved with real estate, do you think you would have been successful in a different field?
JP: I think most businesses are about logic, common sense and then hard, hard work. I think whatever I would’ve applied myself to, as long as I would’ve liked it, I would’ve been successful. If I hadn’t been a businessman I would’ve probably been a successful planner or marketer or designer or even a professor. I’ve always enjoyed teaching and I have taught different courses, I just didn’t follow that route. But I think in whatever I would’ve done I would have been very driven as well in trying to achieve the best that I could be.

HE: Where do you get the drive and the passion?
JP: I think it’s in your gut. Because you find people with the same background who came from Cuba and had hard-working parents but are doing nothing and have no ambition. And then you have others who had everything and they’re still very ambitious. So while I think that your background is important, and I think it was important for me coming from immigrant parents, I think it’s in your genes, in your gut. There is something there that says you’ve got to succeed. But some people just crack in a different way.

HE: How important to your success was a college education and having been a good student?
JP: I think education is extremely important, and I mean, Super—capitalized. College showed me discipline. It was not just a source of knowledge but also of how to get knowledge, how to live with others. I think the better the school, the more competitive people around you will be. I remember at University of Michigan having all-nighters with groups working on projects in which we would always be challenging each other tremendously. I was very fortunate to get scholarships all through college and now I’m very pleased that they’re giving me an honorary doctorate in my undergraduate school now.
Education, I find, had a lot to do with what I became—in creating the drive, and in learning about other people etc... Whenever I talk to my children or anybody else I always place education right up there and advise young people, when they’re becoming adults, to experience leaving their parents and learn to live on their own.

HE: What is the biggest mistake an entrepreneur can make?
JP: The biggest mistake, particularly as you become successful, is to become overconfident—thinking that you’re better, that all of a sudden you’ve achieved success ant things are going to be easier and you can get away with less than what got you here. The reality is that this market is so extremely competitive that the moment that you stop working hard and you become overconfident, that is the moment that you start going down.