The Related Group's CEO Jorge Perez On Lowering Risk During Development In Miami

Jorge Perez, Related Group of Florida chairman and CEO, appeared on CNBC's Squawk Box Wednesday morning to chat about the increase in demand for properties in Miami, Florida, and some of their new approaches to the projects that they have under development. Building in Miami has not reached the hurried heights of 2007, but there is a huge increase in international demand that's been led by Latin America and secondarily by Europe, said Perez. "Miami is of course seen as the link between the south and the north. It's a very, very international city, perhaps our most international city, that has drawn tremendous amounts of Latin American investment, and that's what we're seeing fuel this new boom," Perez said. The Related Group lost $3 billion in various projects as a result of the housing crash, but they're coming back big, and are currently involved in over 40 diverse projects. "We're doing everything from low-income rentals to middle-income rentals, to acquisitions of properties. So when it's 45 projects, it's no longer 45 condominium projects. We probably only have about 10 or 12 condominium projects that are in different stages of development," said Perez. They're much more cautious about taking deposits now, saying that anyone who wants to buy a condominium from the Related Group pays between 50 to 100 percent of the price during the construction period, thus financing the project along the way, Perez said. This significantly lowers risk for them. According to Perez, before the housing crash, down payments on condominiums were at about 20 percent, with a 15 percent return if anything went wrong with the purchase. "In this one, we're not only getting 40 percent up front, and then anywhere between another 20 to 60 percent during the construction period, but if [something were] to happen, we do not have to give back that money to the purchaser. All we have is an obligation to sell their, or resell, their unit for them at market," said Perez. Northeastern United States has also shown an interest in Miami, with an increase coming from there as well as the economy rebounds, but international demand is still the main driver, Perez said.