Latest news with #RelatedGroup
Yahoo
09-04-2025
- Business
- Yahoo
Condo developers are bracing for construction costs to surge — as high as 20% because of Trump's tariffs
Construction costs started surging in anticipation of tariffs — and they could get worse amid the latest round of tariff announcements. That translates into higher costs for new condos and homes. 'We're seeing [subcontractors] throw an additional cushion into their numbers anticipating tariffs,' Related Group CEO Jon Paul Pérez told CNBC. 'It could be as much as 20%, depending on what material they're getting from another country.' The billionaire developer told CNBC that contractors bidding on seven of its projects are raising their prices, driven by the anticipation of higher costs. I'm 49 years old and have nothing saved for retirement — what should I do? Don't panic. Here are 5 of the easiest ways you can catch up (and fast) Nervous about the stock market in 2025? Find out how you can access this $1B private real estate fund (with as little as $10) Here are 3 'must have' items that Americans (almost) always overpay for — and very quickly regret. How many are hurting you? A tariff on imported goods — in this case, construction supplies like softwood lumber sourced from Canada and gypsum (for drywall) sourced from Mexico, means higher costs that are either absorbed by builders or passed onto consumers. The cost of housing has been on the rise — and it's not just because of tariffs. Supply chain issues and previous tariffs have had a negative impact on the construction industry for several years. 'The cost of building materials has already risen by 34% since December 2020, which is far higher than the rate of inflation,' notes the National Association of Home Builders (NAHB). In a March 2025 survey, it estimates that recent tariff actions could increase the price of a typical home by $9,200. On April 2, President Donald Trump announced sweeping tariffs, including a baseline of 10% for all trading partners and 25% on all imported cars. He also announced 'reciprocal' tariffs on trading partners with large trade imbalances, which includes the European Union (at a rate of 20%) and China (at a rate of 34%). There were no additional tariffs on Canada and Mexico, but tariffs of 25% remain on goods that aren't covered by the Canada-United-States-Mexico Agreement (CUSMA). Contractors reacted by raising their prices in anticipation of those tariffs. 'Proposed new tariffs on China, Canada and Mexico are projected to raise the cost of imported construction materials by more than $3 billion,' according to NAHB, and some critical supplies could see dramatic increases that 'could substantially impact builders' ability to deliver new projects.' Another factor to consider is the crackdown on immigration, which could have an inflationary effect on the construction industry — which relies heavily on foreign-born workers. So, what can condo buyers do in today's market? Here are 3 smart financial moves. Read more: Trump warns his tariffs will spark a 'disturbance' in America — use this 1 dead-simple move to help shockproof your retirement plans ASAP Mortgage rates fluctuate for a number of reasons, from supply and demand to economic pressures (a downturn, for example, could result in lower rates to spur growth). The mortgage market also tends to follow movements in the Federal Reserve's key borrowing rate. If you're worried that rates will rise between the time you make an offer and closing, an option is to lock in financing with a mortgage rate lock. This provides a fixed rate for a set period of time (typically between 30 to 60 days, but possibly longer). Some lenders will offer this for free, but others may charge a fee. The flipside is if interest rates drop, then you're stuck with the higher locked-in rate. Some lenders may offer a 'float-down provision' so you can secure the lower rate if it drops by a certain amount, but there's usually a fee for this. Another option is to consider buying a pre-construction condo, which means it's still being built. Homebuilders may offer incentives to attract potential buyers and to persuade them to sign a contract — and it's possible we could see more of these types of incentives if the market slows. In 2022, for example, when the market rapidly slowed during the height of the COVID-19 pandemic, builders used sales incentives to boost sales and limit cancellations. According to NAHB, 59% of builders offered some kind of incentive, such as paying closing costs or fees, offering options or upgrades at low or no extra cost and offering mortgage rate buydowns. If you're looking at new construction, it's always worth asking about incentives. You also have options beyond a traditional mortgage. For example, there are a number of government-backed loans available if you meet certain criteria. These include: FHA loans: Offered by certain banks, these loans usually require a smaller down payment than a traditional loan, and they're insured by the Federal Housing Administration (FHA). If your credit score is preventing you from a traditional loan, this may be an option. VA loans: If you're a vet, active-duty service member or eligible spouse, a VA loan can provide perks such as no down payment and no private mortgage insurance requirements. USDA loans: If you're looking to buy a home in a rural area and you meet income requirements (for low to moderate-income homebuyers), a USDA loan may offer more competitive interest rates than a traditional rate and options for no down payment. There's also down payment assistance (DPA) programs offered by state and local governments, which are low-interest or deferred-payment loans to help first-time homeowners cover down payments. Other options include owner financing (where you buy direct from the seller and pay the seller back in installments rather than going through a bank) and rent-to-own (where you rent the property before buying it at the end of the lease). These types of arrangements can be complex, so you'll want to consult with a real estate attorney before proceeding. Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan 'works every single time' to kill debt, get rich in America — and that 'anyone' can do it Rich, young Americans are ditching the stormy stock market — here are the alternative assets they're banking on instead Cost-of-living in America is still out of control — and prices could keep climbing. Use these 3 'real assets' to protect your wealth today, no matter what Trump does This article provides information only and should not be construed as advice. It is provided without warranty of any kind. Sign in to access your portfolio
Yahoo
29-03-2025
- Business
- Yahoo
This real estate billionaire prepared his son for succession by forcing him to work for a different boss: ‘You're not going to work for me'
Billionaire Jorge Pérez shocked his son Jon Paul by refusing him a job at the family real estate company until he earned experience working elsewhere. Decades later, the hard work has paid off, and Jon Paul is now taking over as CEO. If the hit HBO drama Succession taught the business world anything, it is that you should never expect to be handed anything from your family's business—especially a billion-dollar one. Jon Paul Pérez learned it the hard way. After graduating college, the son of Miami real estate billionaire Jorge Pérez asked his father when he could begin work at the family company, Related Group, but his response was not what he wanted to hear. 'You're not going to work for me,' Jorge recalled to CNBC's Inside Wealth. While Jon Paul admitted he was shocked by the sternness, it's perhaps unsurprising that his dad didn't want to risk his reputation managing $60 billion in assets by hiring his son—just because they're related. So, Jorge took a simple but unconventional approach: He put his son's abilities to the test by making him work for his close friend and business partner instead. So just like that, rather than beginning his career at Related Group after graduating from the University of Miami, Jon Paul begrudgingly headed to New York to climb the business ranks himself. Jorge told all of his children that in order to one day work for him, they had to spend at least five years working in the tough New York real estate market and get a master's degree from a top business school first. Jorge's strict policy was to ensure his children weren't just following his own career path, having seen how lucrative it can be. 'I told them just because I've been successful in real estate, don't pick something you don't have a passion for,' Jorge told CNBC. 'Because life is very tough the way it is and if you wake up every day and do something just for making money or that you don't really like, it's not going to work.' 'I didn't want the rest of the company to feel that they were brought in because of their last name,' Jorge added. Jon Paul eventually started as an analyst at Related Companies, a firm owned by a close family friend and billionaire, Stephen Ross (up until 2022, Ross also owned a minority stake in Perez's company). He later obtained an MBA from Northwestern University's Kellogg School of Management—the No. 3 business school in the country, according to Fortune's rankings. By 2012, Jon Paul had gained enough experience (in his father's eyes) to join Related Group but was still not immediately handed a high-profile portfolio; he started as leader of the rental business and worked his way up. But his father's tough love eventually paid off. Jon Paul is now taking over as chief executive of the family business, where he will run it alongside his brother, Nick. Their father, who will become executive chairman, says his sons have finally earned it. "Both have earned their positions in the company having worked for over a decade in responsible positions both outside and inside the company," Jorge told The South Florida Business Journal. And while taking over for the family patriarch is nothing short of intimidating after being forced to jump through flaming hoops to prove himself for the job, Jon Paul appears up for the new challenge. 'I just want to produce—I don't care who gets the credit,' he said in 2022. Fortune reached out to Related Group and the Pérez family for comment. This story was originally featured on Sign in to access your portfolio
NBC News
21-03-2025
- Business
- NBC News
Tariff fears are raising construction costs by up to 20%, says Related Group CEO
Building contractors are already hiking prices as much as 20% to offset potential tariffs, a move that could also raise prices of new condos and homes, according to the CEO of developer Related Group. President Donald Trump has imposed 25% tariffs on certain goods from Canada and Mexico, including steel and aluminum, and is expected to follow through on broader tariffs starting on April 2. Even before those wider levies take effect, uncertainty over tariffs and inflation is causing many contractors to hike real estate project costs. Related Group CEO Jon Paul Pérez said contractors bidding on seven projects that Related has in the works are raising prices. 'We're seeing [subcontractors] throw an additional cushion into their numbers anticipating tariffs,' Pérez told CNBC during a live Inside Wealth conversation. 'It could be as much as 20%, depending on what material they're getting from another country.' Pérez said the price hikes are driven by the anticipation of higher costs, rather than current levels, and noted it's unclear how the higher costs will be divided between contractor and developer. 'When you go through their numbers in detail and you start negotiating, you quickly find out they're just sort of padding to protect themselves,' he said. As a result, tariff fears could add further upward pricing pressure on a housing market that's already crippled by high prices and elevated mortgage rates. According to a survey from the National Association of Home Builders, rising prices for construction materials could add $9,200 to the cost of a typical home. Related Group is one of the largest and most prominent developers in the U.S., spanning affordable housing to luxury condo buildings, mainly in South Florida. The company currently has more than 90 projects in some stage of development, including rentals, affordable housing units, mixed-use developments and luxury condos. Related's founder and chairman, Jorge Pérez, said that in addition to tariff concerns, the Trump administration's crackdown on immigration could also drive up prices for developments, since the construction industry relies heavily on workers from overseas. 'There will absolutely be a cost effect in our industry, in particular the construction industry,' he said. 'Losing these people will have an inflationary effect.' For now, Related said the high end of the real estate market remains strong, especially in Florida. The company sold two condo penthouses at its exclusive new development on Fisher Island near South Beach, Miami, for a total of $150 million. Related is also building a luxury oceanfront condo tower in Bal Harbour, Miami, called Rivage Residences Bal Harbour, that is offering a mega-mansion in the sky — combining two penthouses that could total more than 20,000 square feet and fetch over $150 million. 'The high-end buyer is a very particular buyer,' said Jorge Pérez. 'Those people are buying over $10 million condominiums and typically they're very, very wealthy. So they're less affected, we're not seeing a decline in that market.' Chairman Pérez said the 'middle market,' or those buying condos in the $1 million to $3 million range, are taking more of a wait-and-see approach given the uncertainties around tariffs and immigration. Many condo buyers in Miami and South Florida are from Canada and Latin America, and are therefore more sensitive to potential changes in immigration policy. 'South Americans are coming and saying, 'What's going to happen with immigration policies?' or, 'Am I going to lose my visa?'' he said. 'We had a project where we just lost seven or eight Canadian and Mexican buyers that were ready to sign contracts, but when all these things came from tariffs, they didn't want to buy. But I think that will calm down.'
