His own way: real estate entrepreneur Javier Cervera Jr. leverages his family name while blazing an independent path for his business

South Florida CEO, July, 2005 by Yeleny Suarez

Javier Cervera Jr. faced a choice several years ago: go to work for the successful real estate company his family grew over 25 years, or go it alone. He chose the latter and now finds himself busy building his own identity while leveraging his family name.

Cervera's only regret is that he didn't do it sooner.

"I wish I would have started five years ago," he says from his Cervera-Bankers Holdings LLC office in Miami. "We saw there was a really good opportunity to go in and buy these Class B, A-, B- rental buildings, do a minimum amount of work and in a minimum amount of time convert them to condominiums."

Today, the company has 500 apartment units in the process of being converted to condos, and has sold another 500 units since its launch two years ago. The 37-year old has also amassed a small but strategic group of land holdings that he hopes to build on or sell for profit.

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It would not be far off the mark to say Javier Cervera was born into the real estate business. The youngest scion of the Cervera clan, his family is among Miami's best-known real estate brokers. His mother, and former boss, Alicia, owns the independent Cervera Real Estate Inc. and his sister Alicia Jr. is the head of Related Cervera Realty Services, which handles sales for many of The Related Group of Florida's condo projects. Combined, the two firms have booked billions of dollars in high-end residential sales in the region.

Cervera worked for more than 15 years for Cervera Real Estate Inc., serving as sales director for projects including Metropolis at Dadeland and Quantum on the Bay. But it was a friendly conversation over drinks with a client that led him to forge a partnership and break away from the family company.

"When I mentioned to good friend, and now partner, Hernando Forero [that] I was going to buy a building to condo convert, he said he had great investment contacts, and could bring in the money. And that is how we partnered and Cervera Bankers was formed," Cervera says.

It has been a busy two years for the company. The business partners recently closed on a deal in Dania Beach, near the Fort Lauderdale/Hollywood International Airport, and a ninth deal in Stuart, for 80 units, closed mid-May. Past deals include 50 units in Coconut Grove and two projects totaling 161 units in Hialeah.

Cervera says the family name--and the reputation it holds in the business community--gives him credibility in a competitive market, making it difficult to completely detach his independent company from the family business. But independence does have its upside.

"I make more money on my own and there is a certain satisfaction in building your own business," Cervera explains.

He adds that his market strategy is not to wait or settle for what is currently up for sale in the market; Cervera and his business partner seek out their own properties, using current market conditions to persuade owners to sell their rental buildings. On the land acquisition side, his criteria for buying are simple: the property must be in a high-demand area and in a state the company can improve upon. Focusing on profits, Cervera concentrates on deals where he can sell the units for $200,000 or less.

Most of the properties the company acquires are 98 to 100 percent rented, allowing a steady rent income to cover the company's debt service. Cervera uses a combination of his own investment equity and outside individual or institutional investors to finance purchases.

"Right now there are few areas in South Florida that are not hot," he says. "We are in the process of closing on a property we acquired in West Palm Beach, which is going to be our biggest project to-date, featuring 312 units."

Business partner Forero, CEO of Miami-based Bankers International Realty, says he saw the opportunity for a low-risk investment that would help increase home ownership locally and also for buyers from Latin America and Europe. To reach those would-be buyers, and shore up business for Cervera Bankers, Forero says he advertises the projects through his realty offices as well. The partners' approach, Forero estimates, nets the company a 25 percent return on investment, mainly because they incur no cost to construct the buildings, conversion can be done in less than a year and the units sell quickly. Two- or three-bedroom units that have been converted from apartments cost 30 percent to 40 percent less than the price of new construction, Cervera says.

Jeff Morr, CEO of real estate brokerage Majestic Properties, agrees with Cervera that condo conversions are becoming a fixture on South Florida's real estate development scene. "The beauty is the buyer gets the product available for delivery almost immediately," Morr says. "This is not a fad. People today want hold to on to property."

Cervera, too, sees land as a valuable investment and is holding on to 2.5 acres of waterfront property to develop on his own. One acre sits near downtown Miami, close to the Performing Arts Center, and is, according to Cervera, the last undeveloped piece facing the water in that neighborhood. He hopes to build his own project on it during the next five to 10 years, Cervera says, though he would not refuse a high offer for it.