Hector Torres, Managing Principal, DLT Global
In an interview with Invest:, Hector Torres, managing principal of DLT Global, discussed the state of the real estate development and construction industry, particularly in Miami and South Florida. “We are in a transitional phase where we are focusing on evaluating our assets, identifying opportunities, and determining the right timing to take action within this economic cycle,” he said.
How would you describe the state of the real estate development and construction industry, particularly in Miami and the South Florida region?
We are coming out of a tough economic hurricane in 2024, and it is only very recently that we have emerged from this economic storm. I use the term “hurricane” as a metaphor because, living in Florida, we understand the process: preparing, surviving, and then cleaning up. Right now, we are in the cleanup stage, assessing the damages on a global, national, and local scale. We are evaluating interest rates, financing options, increased taxes, inflation, and insurance costs, which are all factors that impact real estate investments. As we emerge from this economic hurricane, the horizon is looking more favorable, with improved economic conditions and better terms on the way. We are in a transitional phase where we are focusing on evaluating our assets, identifying opportunities, and determining the right timing to take action within this economic cycle.
DLT Global emphasizes a best-in-class culture. How does this philosophy translate into your approach to project development and execution?
Firstly, we need to define what “best-in-class” means because, believe it or not, there are different levels of excellence. Our company’s philosophy is built on two pillars, which are external best-in-class and internal best-in-class standards.
Externally, we focus on sourcing the best resources. Internally, we cultivate a culture that represents excellence in both our employees and the real estate products we create. While we cannot control the actions of external stakeholders, we can control our responses and the quality we deliver.
Internally, we define best-in-class through two additional pillars. The first is the performance and image of the products we bring to market. The second is how we, as employees and industry leaders, represent that image. We strive to ensure that our properties deliver an exceptional human experience. Buildings may be constructed from the same concrete and steel as everyone else’s, but the difference lies in the culture and attention to detail embedded within those materials. We approach design and construction by focusing on four essential factors, which are air quality, noise quality, water quality, and social quality.
Firstly, for air quality, we supply fresh, sterilized air directly to each unit, rather than using a single HVAC system that circulates air among units. Although this approach requires additional investment, it ensures that residents experience clean, fresh air without sharing airborne viruses or odors. Secondly, water quality. At the water entry point, we install ionization systems to ensure clean and safe water throughout the property. This upgrade is relatively inexpensive but provides significant benefits. Third, we have noise quality. Multifamily properties often have a reputation for noise disturbances between units. We mitigate this by using tunnel form construction, where solid concrete walls and floors separate units. This design provides high decibel insulation, enhancing residents’ privacy. In amenity areas, we also ensure appropriate noise separation so that individuals can enjoy spaces like Zoom rooms, pools, and barbecue areas without disturbance. Lastly, social quality is just as important to consider as it is the key to building a strong community. Our research revealed that traditional amenities like game rooms and TV lounges are rarely used after the initial excitement of moving in. Instead, we repurposed those spaces into Zoom rooms, providing private workspaces for remote workers. These rooms are fully booked between 8 a.m. and 5 p.m., demonstrating their value.
To foster social connections, we also host community events every two weeks. These events introduce residents to yoga instructors, self-development speakers, and local businesses. The businesses offering presentations are required to provide complimentary food and beverages, which has proven highly popular. Attendance has grown from 20 people to nearly 100, representing about one-third of the building’s residents. Naturally, our commitment to these four pillars has resulted in tangible success, with our properties consistently maintaining occupancy rates of 98-99%.
How are you integrating technology into design, development, and efficiency, and what are some of the emerging innovations you are leveraging?
It is no secret that AI is advancing quickly in all areas, including real estate, and we need to stay informed about what is available. In real estate, there is still a lot of room for innovation. Many angel startups in construction help us understand what is available for executing design and fabrication. We are essentially fabricators, but we build outdoors rather than in an enclosed environment. While advancements are happening, there is still a long way to go before implementation in the field, as innovations must go through research, development, and cost controls.
However, AI technology is valuable for managing construction. We use AI to manage schedules, logistics, and material procurement, which is crucial. This support mechanism helps us streamline the technology available, buy better materials, and monitor delivery schedules alongside our subcontractors.
In development, which is different from construction, there is less use of AI because each project is unique. Even though projects come from the same company, they are different, making it difficult to apply algorithmic software. However, the financial world is seeing significant AI advancements. AI is improving analytics and underwriting, allowing us to evaluate projects more quickly, efficiently, and accurately. Another area where we have successfully implemented AI is in accounting. We have fully automated our accounts receivable, accounts payable, and work-in-progress payments, reducing human error when transferring soft costs to hard costs or finance costs.
What opportunities do you see in emerging real estate models such as co-living, adaptive reuse, and transit-oriented development (TOD)?
You have mentioned the key models already, so I would rank them in order of importance, with TODs as No. 1. Given the general excitement about walkability and living without a car, I hope it is clear why TODs are essential. They also help address city transportation and infrastructure challenges. I believe there are significant opportunities along transit corridors, particularly for repurposing properties that become white elephants. However, you need to be proactive and seek these opportunities as they will not simply appear. Similar to how developers targeted beachfront properties 20-30 years ago, today, we focus on properties near transit lines, looking east, west, north, or south of those corridors.
Looking ahead, are there any upcoming projects or strategic initiatives that particularly excite you?
Let me start with Oasis Pointe. This project is completed, fully occupied at 98%, and now part of our operating portfolio. We recently refinanced it and transitioned from construction to the mortgage and stabilization stages. This 15-acre property exemplifies social quality with internal bike paths, walkability paths, and stroller-friendly areas. Residents enjoy a gated community designed for both mobility and social interaction. One highlight is the clubhouse on the rooftop. We created a deck with a bar, open areas, artificial turf for seating, and a white wall where we project events from the nearby Hard Rock stadium. For example, during Formula 1, tenants gathered with bean bags to watch the event on the white wall while feeling the tremors and hearing the engines as if they were at the stadium, exemplifying the social quality of our design.
Next, we are developing a 36-story tower in Midtown Miami on Miami Avenue across from Target. We have owned this one-acre property for 20 years, and the project is now pending city approval. The most exciting long-term project is the Nautico District in Fort Lauderdale. We have owned this six-acre site on the south side of the river for 13 years, and it is now time to develop it. The district will feature five high-rise towers, including condominiums, multifamily units, and a hotel, all with high-end amenities. My favorite feature is the yacht valet marina, which I helped conceptualize. Residents can purchase a condo, use a mobile app to valet their yacht, and have a robot transport the yacht to the basin for trips to the Bahamas. The yacht membership club, designed to resemble a cruise ship, offers a restaurant, yacht catering services, and other luxury amenities. We expect this project will keep us busy for the next six to 10 years.
