The real estate market in Florida received $4.4 million dollars from foreign direct investment (FDI) in 2003; accounting for 15% of the state’s total FDI. You would think that huge global conglomerates are leading in the development of Florida. However, as globalization
pushes the business of development into an era dominated by multinational enterprises, it’s surprising to find that local small business ventures still play critical roles in the real estate industry. Driven by various entrepreneurs, the South Florida real estate market is turning into one of the fastest growing markets in the United States. South Florida new businesses make large contributions to the regional economy, and the real estate sector is an example of one such industry. One in eight South Floridians (Miami-Dade, Broward, and Monroe) are involved in entrepreneurial activity. Any panoramic picture of downtown Miami illustrates this compelling fact empirically supported by the “2004 Assessment: South Florida Entrepreneurship.” The transformation of the Downtown Miami’s skyline into a towering concrete paradise is in fact the exploitation of the entrepreneurial opportunities within realty. Research Director of the Pino Global Entrepreneurship Center, Dr. Paul Reynold’s latest research endeavor surveyed 3 million adults (ages 18-74) living in South Florida during 2004. Of the total sample, 233, 646 people were involved in about 156,00 start up efforts, and about 112,000 are involved with 74,000 new firms (Reynolds, 2005). Furthermore, 28% of South Florida entrepreneurship is involved in Business Services (which include Real Estate, Management, Consulting, etc.). Real Estate is one of the few dynamic sectors with the easy ability to find and specialize within an industry niche, which facilitates market entry and business establishment. Moreover, the vast array of services alone within the real estate industry make in an attractive sector to would-be entrepreneurs. With all the money coming into Miami from abroad, the real estate industry has become more specialized and dynamic, affording new opportunities for local entrepreneurs. The growth of consulting and brokerage firms within the industry is no coincidence. Low barriers to entry, low cost capital investment, and large rewards compel individuals to establish new business within realty. There will always be opportunities in real estate for those who understand the business. Consequently, it is no wonder that “our” local entrepreneurs are the actual movers and shakers in this thriving industry.
Paul Jones is an example of one South Florida entrepreneur changing the landscape of the Real Estate Industry. Graduating from Florida International University in 1978, Paul has come full circle this year as a designated recipient of the prestigious FIU Torch Award. The Torch Award honors the accomplishments of distinguished FIU alumnus/alumna from each respective college. Paul’s success has undoubtedly classified him as a leading South Florida real estate entrepreneur. Pyramid Realty Group Inc., which he co-founded with his wife Maguie, had its humble beginnings in their bedroom-office (remarkably, one in four businesses are owned by a related team – marriage or blood). Today, Pyramid overlooks breathtaking views of the City of Coral Gables in the Alhambra business district. Twenty-nine years ago Mr. Jones began buying and selling real estate certificates while studying Real Estate at the Landon College of Business. From there, his experiences lead to the creation of Pyramid Realty Group Inc. in 1995. Pyramid is a small to medium sized firm, with a large reach in scope and diversity among its clients and services. Pyramid and its subsidiaries form a specialized consulting and investment banking group serving only the real estate industry. Working within the structured finance segment of the real estate market, Pyramid serves mostly Wall street and Capital firms. Eleanor Property Company, JMAC Commercial Mortgage, Goldman Sachs, and Leeman Brothers are just a few of Pyramids most active clients. “Greater efficiency and transparency are the two biggest changes I’ve seen within real estate since I began working within the industry” stated Mr. Jones. The ever-increasing internationalization of financial markets has demanded standardization and “demystification” of processes that dictate finance capital within real estate, which in turn provide greater opportunities for market entry to small to medium sized firms, such as Pyramid. “I never considered myself an entrepreneur, I just went out there and did it,” Mr. Jones asserted. “What’s the worst that can happen, we run out of money file bankruptcy and get a new job. If you have confidence in yourself, there is no risk.” The capital flows into commercial real estate within the last three years have been extraordinarily high, and the Rolodex of over 5000 contacts that Mr. Jones has collected through out his tenure solidifies that there is nowhere for Pyramid to go but up. In addition, Mr. Jones attributes customer service, and the responsiveness to client needs as the cornerstone of success for Pyramid. A competitive advantage that smaller firms have is that clients don’t need to compete for attention, something that Pyramid had definitely capitalized on.
“The valuation of Kiawah Island, SC, has to be one of my favorite projects to date,” affirmed Mr. Jones. “I got the call Friday afternoon of Memorial Day weekend to leave that evening and had one week to complete the project. We had no access to sellers books and a holiday in the middle; working 40 hours straight like doctors to get it done. The Investment Bankers flew in from New York all dressed up in their suits. We’re in shorts, no ones shaved, pulling our second straight all nighter, in this horrible excuse for a hotel room. But we got our product delivered, $120 million dollar purchase done with verbal rapport.” Another noteworthy project undertaken by Pyramid was a capital plan for Amerifirst, which in turn created due diligence methodology. The Resolution Trust Corporations ended up using due diligence methodology to do loan sales in the early ’90’s. Currently, Pyramid is working on 2 CMBS (Commercial Mortgage Backed Securities) for a client. Paul is your typical entrepreneur, a multi-tasker with devote intensity. Not only does he oversee his corporation, he finds time to teach as an Adjunct Professor at FIU within the Real Estate School. He has undoubtedly mastered the art of time management.
Reynolds, Paul. 2005. South Florida: Entrepreneurial Assesment. Pino Global Entrepreneurship Center. Florida International University.