This version of the article first appeared on CNBC’s Inside Wealth Newsletter. This is Robert Frank, Net-Worth Investor and Consumer’s weekly guide. Sign up to receive future editions directly in your inbox. When John Paul Perez graduated from college, he thought he would go to work for his father. After all, John Paul had been studying family business since he was a child. He followed his father into the offices of related groups, spent the summer at construction sites and built a passion for real estate development. John Paul’s father, Jorge Perez, built the “Condominium King” in Miami, a more luxurious condominium tower in South Florida. At graduation dinner, John Paul asked his father when he could start work at work. His dad’s response: “You’re not going to work for me.” “I was shocked,” John Paul said. John Paul knew his father had a plan. This will take years to complete before joining a family company. Now taking over as CEO of a related group with a 40 billion portfolio beyond condos, rentals and commercial spaces, a Miami-based real estate conglomerate, John Paul said he is grateful for the long journey he has faced with the top. They are what they face today’s super wealthy as they try to move family businesses to the next generation. A study by the Brown Brothers Harriman found that 91% of private business owners say it’s important for their business to remain in their families. However, three-quarters say the role of the next generation is not clearly defined or fully conveyed. A PWC family business survey found that only a third had a robust succession plan. As family-owned founders shares, questions about succession are becoming more pressing as we reach the 70s and 80s. Are the next generation ready? Are the founders really ready to hand over the reins? Do you need to win the top role of a child? Are they really interested in business or are they just doing it out of family duties? Related Chairman and Founder Jorge Perez, along with his sons John Paul and Nicholas, president of condominium development, spoke about how the process is managed. Here are three main takeaways to help you successfully prepare for the next generation: 1. Love it when the kids grow up, Jorge takes them to the office over the weekend after soccer and sports games. “In my opinion, they were saying, ‘They’ll like this, or they don’t like real estate,'” Jorge said. “I told them… Don’t choose something you don’t have a passion for just because I’ve succeeded in real estate. Life is so tough, so if you wake up every day and do something just to make money, it won’t work,” John Paul said he visited related offices and rental buildings as a child, working in the company and spent the summer, from finances and budgets to construction and contractor bidding. “I wanted to get involved in the business,” John Paul said. “I linked my life to real estate,” Nicholas said on his side, after his early dream of becoming a professional tennis player, “I knew I wanted to be real estate.” He said his father would often go home on floor plans and study them: “Dad says, ‘This is the width of the bedroom, this is why you put the door here.” It was creating something from everything. 2. You need to get a job “I didn’t want them to feel like they were brought in because of their last name,” Jorge said. There he imposed the rules. To be related, his children had to earn a master’s degree from a top business school and worked in the real estate industry in New York for five years. If they hadn’t completed their master’s degree, they would have had to work in the business for seven years first. After graduating, John Paul worked for an affiliate in New York, a development company founded by Stephen Ross, a former business partner of Perez and still a close friend. (Similar names, separate companies.) Despite family relationships, “You were going to sink or swim,” John Paul said. “You worked 12 to 14 hours a day and learned to ask the right questions. What happened to me was the best thing that wanted to succeed. I didn’t want to fail.” In 2012, the Florida real estate market recovered once again, and in New York, John Paul called his father five years later to ask for a second job. This time Jorge agreed. But instead of starting with the well-known condo division, John Paul had to start a more breeding rental business. Eventually he moved to the condo division and later became the company president. This month he was appointed CEO. “You learn that you need to work hard in our shoes to prove to others that you’re not being given,” John Paul said. As Jorge said, “The biggest thing for his father is to see his children do better than him.” 3. Giorge passed value along with assets along with skills, training and expertise to ensure that the next generation maintains relevant value. (Jorge’s daughter, Christina, is a social worker and engaged in charity, and his youngest son, Felipe, attends college.) “You have one reputation,” said John Paul. “Perez’s family has a reputation for doing the right thing. Whether it provides the highest quality affordable housing. Nicholas said his father also imbued them with the importance of hard work. “There’s no substitute for hard work,” Nicholas said. “There’s so much competition and everyone is going to fight you. So if you’re not working, someone else will either get that site or have a better idea.”
(LR) John Paul, Jorge, and Nicholas.
Courtesy of Future Proof and Triangle Blvd
This version of the article first appeared on CNBC’s Inside Wealth Newsletter. This is Robert Frank, Net-Worth Investor and Consumer’s weekly guide. Sign up to receive future editions directly in your inbox.
When John Paul Perez graduated from college, he thought he would go to work for his father.
After all, John Paul had been studying family business since he was a child. He followed his father into the offices of related groups, spent the summer at construction sites and built a passion for real estate development. John Paul’s father, Jorge Perez, built the “Condominium King” in Miami, a more luxurious condominium tower in South Florida.
At graduation dinner, John Paul asked his father when he could start work at work. His dad’s response: “You’re not going to work for me.”
“I was shocked,” John Paul said.
