By Jennifer LeClaire / April 17, 2012
MIAMI – Bernie Navarro just returned from a business and trade mission in Peru, where he traveled with City of Miami Mayor Tomás Regalado. During the trip, the duo met with the Peruvian vice president and the Mayor of Lima, among others.
The goal: to identify opportunities for Miami and Peruvian real estate companies, contractors, and others in the industry to do business with one another. It was a timely meeting, with Latin American investors still flooding the Miami market with cash.
GlobeSt.com caught up with Navarro, president and founder of Benworth Capital and Bernie Navarro says Peru could be the next big investor in Miami real estate.
the current president of the Latin Builders Association, to discuss what he learned in Peru, whether he sees a recovery underway in Miami’s construction industry, and his perspectives on the alternative lending space.
GlobeSt.com: What did you learn while in Peru, and where do the opportunities lie for Florida real estate companies to establish links with investors and companies in that country?
Navarro: When it comes to economic activity in Latin America, Brazil has dominated the conversation over the past five years. But there’s evidence that Brazil’s economy is slowing just as Peru’s is picking up steam. Our delegation of Miami’s political, trade and business leaders, led by Miami Mayor Tomás Regalado, met with Peruvian business and political leaders, including the vice president and mayor of Lima. We learned that the Peruvian GDP is growing at an average rate of 6% per year or better, the middle class is expanding, employment is up, and inflation is falling to healthy levels.
The construction sector is seeing more activity as demand rises and investments are made in infrastructure, commercial and residential real estate, and public-private partnerships. Significant demand for housing persists, so there is real opportunity for Florida real estate and construction companies to enter the market, especially firms offering higher-skill services. Likewise, the upper class in Peru is very interested in investing in the South Florida housing market, which is competitively priced in comparison to premium markets in Peru. The hope is that these people would establish second homes in Florida and ultimately launch a business here.
GlobeSt.com: The Latin Builders Association is the largest Hispanic trade group in the construction industry. What are you hearing from your membership? Is a recovery underway?
Navarro: The consensus among Latin Builders Association members is that we’re rebounding, but there is still much work to be done before we return to pre-crash levels. We are seeing increasing activity in the upper tier of the single-family home landscapte, such as Coral Gables, Doral, and Pinecrest in Miami-Dade.
The condo market is also in much better shape than it was two years ago, fueled in large part by domestic and international buyers. The cleansing of the residential market is over and there’s every indication that the recovery is going to continue over the near- and long-term.
GlobeSt.com: Where is the greatest opportunity for new construction business? Which sectors and geographies have been the fastest to rebound?
Navarro: Single family construction and government-backed projects, such as infrastructure improvements and public-private partnerships, are the most active sectors today. The commercial sector has been slower to rebound as there is still ample available product in many markets, but improvements in consumer and business confidence will gradually give way to improvements in commercial developer confidence. Projects like the port expansion, continued airport expansion, and new rail link in Miami should spur even more trade activity in the near future. Our message in Peru was, “Miami is open for business.”
GlobeSt.com: You founded Benworth Capital on the heels of the real estate meltdown. What was your motivation for launching the firm and how has it evolved since then?
Navarro: Access to traditional capital all but dried up following the global financial crisis and amid tightening regulations. Some banks ceased lending altogether. But there were still worthy borrowers seeking capital for viable investments. We launched Benworth Capital in 2008 to fill this gap, providing private financing to qualified borrowers looking to invest in residential or commercial real estate. Our client base and loan portfolio have grown exponentially since then, with assets under management doubling between 2010 and 2011 alone.
GlobeSt.com: What is Benworth’s role as an alternative lender and what types of clients are you targeting when it comes to originating loans?
Navarro: Benworth Capital, among South Florida’s largest private mortgage lenders, offers individuals and businesses conventional and alternative financing for the purchase and development of residential and commercial real estate. Our client base includes foreign buyers, real estate investors seeking short term capital, individuals and families looking to buy or build a home, investors looking to purchase income-producing properties, and entrepreneurs seeking commercial properties where they will operate a business, among other groups.
GlobeSt.com: Does Benworth plan to raise additional capital this year? If so, why is the timing right to take this on now and what lies ahead in the alternative lending space?
Navarro: We see growing demand for capital in the real estate market, especially here in South Florida, and we are laying the groundwork for a capital event that will expand our lending reach over the next year. International buyers are on the move here, the domestic market is beginning to comeback, and Florida will always be among the most desirable real estate markets in the Americas. Benworth is positioned to help meet that demand by matching investors with available private capital.