Miami Today Profile: Victor Ballestas
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PROFILE WEEK OF THURSDAY, DECEMBER 30, 2010 4 MIAMI TODAY Photo by Maxine Usdan “They underestimated how much of the Latin American market was interested in owning a condominium in Miami,” said Victor Ballestas, ST region managing director. The Newsmaker Victor Ballestas Regional Managing Director ST Miami 3390 Mary St., Suite 200 Coconut Grove 33133 (305) 442-6529 [email protected] Age: 33 Born: Barranquilla, Colombia Education: Florida International University (bachelor’s), University of Florida (master’s). Personal Philosophy: “To stay honest and work hard is what I live by. I make my decisions based on if it was going to be printed in the newspaper. Would you be proud or would you be worried? That’s how I base my decisions.” Fueled by Latin American strength, Victor Ballestas leads... Victor Ballestas is leading the sales of several high-end condominiums in South Florida, including Paramount Bay, Mint at Riverfront and Infinity at Brickell in Miami. Mr. Ballestas serves as regional man- aging director of ST Miami, the manag- ing entity that controls the South Florida assets acquired by multiple private eq- uity groups, led by Starwood Capital Group and the Federal Deposit Insur- ance Corp. Initially, the group thought it would take more than five years to sell these condominiums, he said, but because the Miami market has been active with inter- national buyers scooping up units, sev- eral properties are already making sales. Units at Mint and Infinity are closing and a sales plan is in the works for Paramount Bay. “Everybody underestimated Miami and the Latin American community in Miami and how powerful Miami is for the Latin Americans,” said Mr. Ballestas, who has been in the position about seven months. “They underesti- mated how much of the Latin American market was interested in owning a con- dominium in Miami.” Today, ST Miami hopes to sell its condo inventory, encompassing nine South Florida condominiums, within three to four years. The private equity conglomerate is eye- ing opportunities to acquire more condo- minium projects in South Florida because of the success it’s experiencing so far. Mr. Ballestas discussed the plans for ST Miami’s property portfolio and the opportunities ahead with Miami Today reporter Yudislaidy Fernandez at the 459-unit condo Infinity at Brickell. Q: Tell us about ST Miami. A: ST Miami is the management en- tity that controls the assets that were picked up by a conglomerate of private entity groups. The conglomerate is a private/public partnership between pri- vate equity groups and the FDIC (Fed- eral Deposit Insurance Corp.). They picked up a group of assets, 98 in total, from the FDIC after Corus Bank went into receivership. ST Residential, the company, manages those assets throughout the country. ST Miami man- ages the assets scattered throughout South Florida. Q: What does being regional man- aging director entail? A: The assets were acquired about a year ago, and I came into ST around six months ago. I make decisions that are best suited for the portfolio and for our partners, which are the private equity groups and the FDIC. I’m in charge of 15 assets throughout Florida and I concentrate on making sure that we make the right decisions for our investors and for the buyers that come into our properties. Q: Tell us about the properties in- cluded in the South Florida portfolio. A: The portfolio that we have in South Florida is probably the most con- centrated of any region in the country. It has a lot to do with the fact that the real estate boom in the US was very concentrated in areas like South Florida, Las Vegas, Los Angeles. Right now, we’re in Infinity, which is a condominium project that has 459 units. Out of those 459, 300-plus units are part of our portfolio. We manage those assets. The second one that we have, just down the street, is the Mint condo- minium. That is a different situation, because it wasn’t completed. We don’t have any residents living in the building. We’re finishing the asset and taking it back out to market. That’s a large con- dominium project with 530 units. The other assets we have in South Florida are Paramount Bay, where ST is completing the asset. We have a co- lender on that project, iStar. We also have a project in Aventura called Artech. All of these are condominium projects. We have Tao over by the Sawgrass (Mills) Mall. We have Dolcevita in Palm Beach County. It’s in foreclosure, so we will have control soon. We’re also lenders on Artecity in Mi- ami Beach. Jade Ocean is one of the assets in Sunny Isles. Then, there’s another asset we’re lenders on in Sunny Isles, called Sole (on the Ocean). We have nine assets in South Florida and six scattered throughout the rest of Florida. Q: Tell us about your professional experience before taking on this role. A: I’ve been in real estate my whole life. I started as an assistant to a real estate broker in Miami Beach. I was 17 years old, so I’ve been around the busi- ness for a long time. That’s where I learned a lot of the ins and outs of the real estate industry of Miami. After I left brokerage, I went to pur- sue my advance degree. When I came back from that, I spent nine years with WCI Communities, which was one of the large condominium developers in Florida. With them, I helped develop over 12 high-rise condominium projects, some of which were in South Florida. We have One Bal Harbour in South Florida and Mosaic on Miami Beach. High-end condominium projects are what we specialized in. I left WCI about two months before it went into bankruptcy. The writing was on the wall. I joined a private equity group by the name of Wheelock Street Capital, based in Greenwich, CT. It was a small group led by a gentleman who cut his teeth with Starwood Capital, Rick Kleeman. In those two years I spent with the private equity group what I did was underwrite the condominium opportu- nities in Florida that were under dis- tress. I spent time talking to the banks, trying to figure out what deals were going to become available. It was slower than most private equity groups ex- pected. It was tough to pick up deals. The banks were not letting them go. When this transaction happened, led by Starwood Capital picking up all these assets from the FDIC, it was a natural transition for me. I had spent a lot of time analyzing the same properties they picked up. They found themselves with a large portfolio of the asset class. It was a natural fit. I saw the opportunity and jumped about six months ago. Q: What is ST Miami’s strategy for selling the inventory at these proper- ties? A: Patience. The market is reacting the way we want it to react. Everybody has underestimated Miami and the Latin Ameri- can community in Miami and how power- ful Miami is for the Latin Americans. They underestimated how much of the Latin American market was interested in own- ing a condominium in Miami. We thought it was going to take up- wards of five years as we release these projects to the market. It looks more like a three- to four-year strategy these days. Instead of liquidating the condomini- ums to the market, we decided to go the other way. We’re investing dollars into these projects and turning them from an investment into real homes. After we invest the dollars in these communities, we’re releasing them back out to the market. We’re having a lot of success with that strategy. Q: How much inventory do you have in South Florida and how many units does that translate to? A: As lenders or as owners, we have nine properties in South Florida. We have another six properties throughout the rest of Florida. Between loans and properties, we own around 2,200 (units). Q: How much inventory do you con- trol in the region? A: The figure 23% came from down- town Miami. The properties that we control in downtown Miami – Infinity, Mint, Paramount Bay – have a good chunk of the inventory. Q: Have any of these South Florida properties been foreclosed on? If not, how do you work with individual own- ers to get the units sold? A: We’re working with developers instead of having to go down this long foreclosure process. A lot of these de- velopers are good developers. Under- standing that there were big properties caught in bad times, we decided that working with the developers is the best strategy. We’re working with the DYL Group and Key International and Inigo Ardid. Both have helped us get to where we are today. Q: How do you decide whether to go with an in-house team or a realty firm to market property? A: The first market we launched in Atlanta. We chose one company, and they were our marketing company in charge of all five properties. Here we employed a different strat- egy. We thought each property had its own appeal. Marketing groups have their own strengths, so we tried to figure out which was the best group to market that specific property, based on location, based on quality. (At Infinity) we chose Walter Defortuna from Fortune International. At Mint, Inigo Ardid put together a strong in-house group with a competent sales team. In Tao, we chose International Sales Group. At Paramount Bay we decided to go with Fortune International. Q: Can you tell us about the profile of buyers who are closing on units in these properties? A: We’ve had the benefit of seeing the buyer profile today and comparing that to the profile from before. We’re seeing up- What’s so special? • Out early every Wednesday before 4 a.m. • Audio feature reads articles to you • Email articles to your colleagues • Hotlinks to websites Just $59.95 for 52 issues Go to www .miamitodaynews.com and click on “login-subscribe” e-
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Victor Ballestas is leading the sales of several high-end condominiums in South Florida, including Paramount Bay, Mint at Riverfront and Infinity at Brickell in Miami. Mr. Ballestas serves as regional managing director of ST Miami, the managing entity that controls the South Florida assets acquired by multiple private equity groups, led by Starwood Capital Group and the Federal Deposit Insurance Corp.
Transcript of Miami Today Profile: Victor Ballestas
PROFILE WEEK OF THURSDAY, DECEMBER 30, 20104 MIAMI TODAY
Photo by Maxine Usdan
“They underestimated how much of the Latin American market was interested inowning a condominium in Miami,” said Victor Ballestas, ST region managing director.
The NewsmakerVictor Ballestas
Regional Managing DirectorST Miami3390 Mary St., Suite 200Coconut Grove 33133(305) [email protected]: 33Born: Barranquilla, ColombiaEducation: Florida InternationalUniversity (bachelor’s), University ofFlorida (master’s).Personal Philosophy: “To stay honestand work hard is what I live by. I makemy decisions based on if it was goingto be printed in the newspaper. Wouldyou be proud or would you be worried?That’s how I base my decisions.”
Fueled by Latin American strength, Victor Ballestas leads...Victor Ballestas is leading the sales of
several high-end condominiums in SouthFlorida, including Paramount Bay, Mintat Riverfront and Infinity at Brickell inMiami.
Mr. Ballestas serves as regional man-aging director of ST Miami, the manag-ing entity that controls the South Floridaassets acquired by multiple private eq-uity groups, led by Starwood CapitalGroup and the Federal Deposit Insur-ance Corp.
Initially, the group thought it wouldtake more than five years to sell thesecondominiums, he said, but because theMiami market has been active with inter-national buyers scooping up units, sev-eral properties are already making sales.
Units at Mint and Infinity are closingand a sales plan is in the works forParamount Bay.
“Everybody underestimated Miamiand the Latin American community inMiami and how powerful Miami is forthe Latin Americans,” said Mr.Ballestas, who has been in the positionabout seven months. “They underesti-mated how much of the Latin Americanmarket was interested in owning a con-dominium in Miami.”
Today, ST Miami hopes to sell itscondo inventory, encompassing nineSouth Florida condominiums, withinthree to four years.
The private equity conglomerate is eye-ing opportunities to acquire more condo-minium projects in South Florida becauseof the success it’s experiencing so far.
Mr. Ballestas discussed the plans forST Miami’s property portfolio and theopportunities ahead with Miami Todayreporter Yudislaidy Fernandez at the459-unit condo Infinity at Brickell.
Q: Tell us about ST Miami.A: ST Miami is the management en-
tity that controls the assets that werepicked up by a conglomerate of privateentity groups. The conglomerate is aprivate/public partnership between pri-vate equity groups and the FDIC (Fed-eral Deposit Insurance Corp.). Theypicked up a group of assets, 98 in total,from the FDIC after Corus Bank wentinto receivership. ST Residential, thecompany, manages those assetsthroughout the country. ST Miami man-ages the assets scattered throughoutSouth Florida.
Q: What does being regional man-aging director entail?A: The assets were acquired about a
year ago, and I came into ST around sixmonths ago. I make decisions that arebest suited for the portfolio and for ourpartners, which are the private equitygroups and the FDIC.
I’m in charge of 15 assets throughoutFlorida and I concentrate on makingsure that we make the right decisionsfor our investors and for the buyers thatcome into our properties.
Q: Tell us about the properties in-cluded in the South Florida portfolio.A: The portfolio that we have in
South Florida is probably the most con-centrated of any region in the country.It has a lot to do with the fact that thereal estate boom in the US was veryconcentrated in areas like South Florida,Las Vegas, Los Angeles.
Right now, we’re in Infinity, which isa condominium project that has 459units. Out of those 459, 300-plus unitsare part of our portfolio. We managethose assets.
The second one that we have, justdown the street, is the Mint condo-minium. That is a different situation,because it wasn’t completed. We don’thave any residents living in the building.We’re finishing the asset and taking itback out to market. That’s a large con-dominium project with 530 units.
The other assets we have in SouthFlorida are Paramount Bay, where ST iscompleting the asset. We have a co-lender on that project, iStar. We alsohave a project in Aventura called Artech.All of these are condominium projects.We have Tao over by the Sawgrass(Mills) Mall. We have Dolcevita in PalmBeach County. It’s in foreclosure, sowe will have control soon.
We’re also lenders on Artecity in Mi-
ami Beach. Jade Ocean is one of theassets in Sunny Isles. Then, there’sanother asset we’re lenders on in SunnyIsles, called Sole (on the Ocean). Wehave nine assets in South Florida and sixscattered throughout the rest of Florida.
Q: Tell us about your professionalexperience before taking on this role.A: I’ve been in real estate my whole
life. I started as an assistant to a realestate broker in Miami Beach. I was 17years old, so I’ve been around the busi-ness for a long time. That’s where Ilearned a lot of the ins and outs of thereal estate industry of Miami.
After I left brokerage, I went to pur-sue my advance degree. When I cameback from that, I spent nine years withWCI Communities, which was one ofthe large condominium developers inFlorida. With them, I helped developover 12 high-rise condominium projects,some of which were in South Florida.We have One Bal Harbour in SouthFlorida and Mosaic on Miami Beach.High-end condominium projects are whatwe specialized in.
I left WCI about two months before itwent into bankruptcy. The writing wason the wall.
I joined a private equity group by thename of Wheelock Street Capital, basedin Greenwich, CT. It was a small groupled by a gentleman who cut his teethwith Starwood Capital, Rick Kleeman.
In those two years I spent with theprivate equity group what I did wasunderwrite the condominium opportu-nities in Florida that were under dis-tress. I spent time talking to the banks,trying to figure out what deals weregoing to become available. It was slowerthan most private equity groups ex-pected. It was tough to pick up deals.The banks were not letting them go.
When this transaction happened, ledby Starwood Capital picking up all theseassets from the FDIC, it was a naturaltransition for me.
I had spent a lot of time analyzing thesame properties they picked up. Theyfound themselves with a large portfolioof the asset class. It was a natural fit. Isaw the opportunity and jumped aboutsix months ago.
Q: What is ST Miami’s strategy for
selling the inventory at these proper-ties?A: Patience. The market is reacting the
way we want it to react. Everybody hasunderestimated Miami and the Latin Ameri-can community in Miami and how power-ful Miami is for the Latin Americans. Theyunderestimated how much of the LatinAmerican market was interested in own-ing a condominium in Miami.
We thought it was going to take up-wards of five years as we release theseprojects to the market. It looks more likea three- to four-year strategy these days.
Instead of liquidating the condomini-ums to the market, we decided to go theother way. We’re investing dollars intothese projects and turning them from aninvestment into real homes. After weinvest the dollars in these communities,we’re releasing them back out to themarket. We’re having a lot of successwith that strategy.
Q: How much inventory do you havein South Florida and how many unitsdoes that translate to?A: As lenders or as owners, we have
nine properties in South Florida. Wehave another six properties throughoutthe rest of Florida. Between loans andproperties, we own around 2,200 (units).
Q: How much inventory do you con-trol in the region?A: The figure 23% came from down-
town Miami. The properties that wecontrol in downtown Miami – Infinity,Mint, Paramount Bay – have a goodchunk of the inventory.
Q: Have any of these South Floridaproperties been foreclosed on? If not,how do you work with individual own-ers to get the units sold?A: We’re working with developers
instead of having to go down this longforeclosure process. A lot of these de-velopers are good developers. Under-standing that there were big propertiescaught in bad times, we decided thatworking with the developers is the beststrategy. We’re working with the DYLGroup and Key International and InigoArdid. Both have helped us get to wherewe are today.
Q: How do you decide whether to gowith an in-house team or a realty firmto market property?A: The first market we launched in
Atlanta. We chose one company, andthey were our marketing company incharge of all five properties.
Here we employed a different strat-egy. We thought each property had itsown appeal. Marketing groups have theirown strengths, so we tried to figure outwhich was the best group to market thatspecific property, based on location,based on quality.
(At Infinity) we chose Walter Defortunafrom Fortune International. At Mint, InigoArdid put together a strong in-housegroup with a competent sales team. InTao, we chose International Sales Group.At Paramount Bay we decided to go withFortune International.
Q: Can you tell us about the profileof buyers who are closing on units inthese properties?A: We’ve had the benefit of seeing the
buyer profile today and comparing that tothe profile from before. We’re seeing up-
What’s so special?• Out early every Wednesday before 4 a.m.
• Audio feature reads articles to you • Email articles to your colleagues • Hotlinks to websites
Just $59.95 for 52 issues
Go to www.miamitodaynews.com and click on “login-subscribe”e -
PROFILEWEEK OF THURSDAY, DECEMBER 30, 2010 MIAMI TODAY 5
...ST Miami’s faster-than-forecast upscale towers selloutsward of 80% of the international buyers.
The reason that domestic buyers are notas active as international buyers is mostlikely financing. The financing market,although it seems to be straggling back in,has been slow. Where you used to get90% financing or 95% financing, todayit’s more like 70% financing.
International buyers are seeing Miamias an opportunity. I’m from Colombia. Acouple of months ago, I went to Cartagenaand I walked around some new proper-ties. Cartagena is selling for more thanMiami, so Miami starts to look like abargain for international buyers.
The Brazilian real is improving, sowe’re seeing a lot of Brazilian buyers inMiami these days.
We’re seeing a lot of Venezuelan buy-ers. There’s flight of capital issues inthe country right now, so we’re seeingthose buyers try to find a little moresafety in Miami. They want to be in thismarket.
Before, we were seeing buyers whowould buy a residential unit and try toflip that home and make a return in acouple of months. Today, buyers arelooking at a three- to five-year horizon.They buy here, they enjoy it, they rent itand hope that in three to five years,prices will appreciate to what they usedto be and they get a return.
Q: When do you hope to get this in-ventory sold?
A: Initially we had a five-year-plustime horizon. With the strength of thesales we’ve been seeing in the markettoday, we’re looking more at a three- tofour-year horizon. Some of the proper-ties that we have have a lot of units. Mintis 530 units in total, so we don’t expectto liquidate these properties in one year.We expect to improve them, releasethem to the market and three to fouryears is the right time frame.
Q: What is the pulse of downtownMiami’s condo market?
A: I can summarize it with one word –optimism. It’s different from what wewere seeing toward the end of ’08. At theend of ’08, when I was with Wheelock
underwriting a lot of these deals, wecouldn’t figure out how to underwritethe bottom. How low would we go?
Today, it’s a different story. There’sa lot of clarity. It’s easy to understandthe value, where as a year and a half totwo years ago things were in a down-ward spiral. We have a foundation in themarket today. It’s easier to understandwhat the value of a condominium projectis versus what it was.
The deals that did come to the marketwere absorbed quickly by buyers. Itwas difficult for outsiders to under-stand that.
My experience taught me that theNew York firms that tried to enter in ’08were trying to underwrite this marketbased on the domestic buyer, based onthe jobs in Miami. Miami’s never beenthe strongest job market, so it wastough to underwrite how we were goingto sell 10,000. Firms didn’t understandthat Miami is not driven by that. Miami’sdriven by the Latin American market.
Q: Is ST Miami considering addingnew properties to its portfolio?
A: Yes, considered and actively pur-suing.
We have been looking at new oppor-tunities. There’s not many left thesedays, but there are some opportunitiesout there.
We, unlike a lot of groups, have investeda lot into our platform and our manage-ment entity, which has been successfulwith the projects we control. It’s naturalfor us to step into other properties andother situations. We can add an incredibleamount of value. We’ve convinced ourpartners that we’ve done that, so we areactively looking at other properties.
Q: Is that within South Florida?A: South Florida will probably lead the
charge because of how successful thecurrent sales of the inventory have beendoing. The markets are a little bit morechallenging. We have a lot of assets inLas Vegas that we’re renting versusselling, because that sales market is notas strong. The fact that South Florida hasbeen strong lately signifies that we will
probably lead the charge on the acquisi-tions side versus other markets.
Q: Will you be buying propertiesfrom other banks?
A: There’s some banks that still haveproperties, and the people at the bankdon’t have the experience level to man-age these assets. We have a pretty strongcase for being the right group to get outthere and do what we’re doing to thecurrent assets, which has proven to bevery successful.
I think banks, other developers, foundthemselves in trouble. We’re a friendlygroup. We’re not looking to do anythingadversarial. We can work on partner-ships, but the best way that we can getthese deals done, we’d be happy to try.
Q: What are your thoughts on thetransformation Miami’s urban corehas been undergoing in recent years,and what else is needed to complementthe growing residential base?
A: The residential sector has ledgrowth. When we had a real estateboom, the residential sector was wheremost of the profits were coming from.Developers started building residentialhigh rises.
Today everybody is starting to moveinto these high rises. Everybody’s start-ing to understand that downtown Miamiis a great place to live, and you’restarting to see more and more restau-rants pop up.
We still have a gap for shopping indowntown Miami. If I lived in one ofthese condominiums, I’d want to see abit more on the shopping side to make itmore convenient for residents.
The growth in restaurants has beenamazing. I grew up and lived in MiamiBeach my whole life. For me to go toMiami was few and far in between.These days I’m crossing the bridge tocome to restaurants in Miami, becausethat’s where we’re starting to seegrowth. We’re going to see a lot of whathas been started. More restaurants, moreshopping. It’s coming.
Q: Do you think some people arechoosing to relocate from Miami
Beach to Miami’s urban core becauseit’s closer to their jobs?
A: Yes, absolutely.Miami Beach didn’t see the growth in
residential homes that Miami did. A lotof people are starting to understand thatthey can buy a luxury condominium inMiami for $350 a square foot. They’dbe paying double on Miami Beach, andit’s just across the bridge.
The argument was that in Miami Beachyou could walk around. You have therestaurants, you have the shopping. Thelifestyle was a big thing of Miami Beach.Today, it’s a different argument.
My sister lives in one of the condomini-ums in Brickell, and she tells me, ‘I walkdownstairs and have 16 restaurants.’ Ilive south of Fifth (Street). I have thesame thing. I probably pay double.
Q: Tell us about your family.A: It’s been a long couple of years.I have twin babies. They’re 19 months
old, Nicolas and Victoria. I’ve beenpretty lucky the last couple of years.I’ve been married for eight years now,and my wife would kill me if I forgotthat part.
My wife, Beatriz, and I live in MiamiBeach. We bought a home four monthsago, which we’re remodeling and look-ing to move into. It’s hard to keep two19-month-old babies running around anapartment very happy.
My professional career has been go-ing great. [I’m] probably busier than Iwould want to be right now, but theblessing in disguise is that you don’treally know the difference between hav-ing one and having two because you justgot two. I don’t think I would havechosen it any other way. I’m very happywhen it comes to that.
Q: Do you have any hobbies?A: I have a small home in the Keys that
I go to a lot. That’s my getaway. I have asmall vacation home in Colorado, so I doa lot of skiing, kite surfing and watersports. I haven’t done a lot of that in thelast couple of years, with work and thebabies, but [I’m] hoping things will stabi-lize a bit and I’ll get back to my hobbies.
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