A billionaire developer that builds best of class multifamily products around the globe is making a move into the Phoenix market. Billionaire investor Jorge Pérez, CEO of The Related Group, which got its start in Florida and remains based in the Sunshine State, is planning to invest $500 million in the Phoenix market. The Related Group currently has three sites under contract in the Valley and has another close to being under contract. In all, Related Group co-founder, chairman and CEO Pérez said his company is looking at 20 sites around the metro area.
“We have rated cities across the country, and that research showed that one of the top cities for us, right now, is Phoenix,” said Pérez, who sat down for interviews on Tuesday in Scottsdale after spending the day touring those potential project sites around the Valley. “The job growth, the unemployment rate, the occupancy rate, the number of building permits and construction starts; those versus the employment growth and the demographic growth are at an imbalance. So we like that.
“Not only are the short term indicators great, but if you look at population movement, business movement, you will see that there are certain areas that both businesses and people are moving. Phoenix is one of those.”
The Related Group, along with its New York-based sister company Related Companies, is known for high-end multifamily residential projects. Pérez earned the nickname “Condo King of Miami” with projects such as Miami’s Portofino Tower and Icon South Beach. Related has expanded its reach across the country, with offices in California, and projects in Mexico, Argentina and Brazil.
Pérezsaid Related Group’s first four Valley projects will be located in city and employment centers such as downtown Phoenix, Scottsdale and Tempe, as well as the Deer Valley area. Pérez did not give any specifics on the investment totals Related has going into the Valley or the location of the projects. He did stress that Related hopes to have two projects under construction in 2019.
Already, Related has been on the ground in the Valley to gauge what kind of business climate that Phoenix and Arizona have to offer.
“We’ve been getting to know our neighbors around the sites that we’re looking at and also the political stakeholders and we’re finding them to be very concerned and interested about their constituents,” said Related Development president and CEO Steve Patterson. “We’re also finding them to be interested in building the right thing and that’s exactly the kind of environment that we want to put ourselves in to.”
Patterson added that the Valley also hit all of the marks that Related was looking for in terms of potential tenants. He cited surveys that showed people ages 24 to 34 are moving to the Phoenix at a rate that’s double the national average. Also, those that are moving here are in the science, technology, engineering and math professions.
“So, we have an age cohort that’s growing twice as fast as the rest of the country and they’re rich in an industry that’s growing twice as fast the rest of the country. That’s kind of a magic formula,” Patterson said.
Related projects put a premium on aesthetic elements like the building architecture and design, as well as landscaping. But what makes Pérez and Related different is the focus on artwork.
“We really believe that art is an expression of the times. It’s the soul of people and it makes people’s lives better,” said Pérez, who has a renowned personal art collection and who employs two, full-time curators who do nothing but find and buy art for Related projects. “We feel that we have something to add, especially to cities where we have not seen the physical design of products that have been very successful for us in other parts of the country. We’re very good at creating best in class. While I think Phoenix is a great city and that’s why we’re here, we think we can add to that market.”