In a recent episode of The Pitch Room, we had the privilege of speaking with Mauricio Gebara and Luiz Felipe from Rakennus, a pioneering real estate development company based in Mexico City. Specializing in sustainable urban renovation, Rakennus has redefined the market by turning neglected properties into vibrant, modern homes and communities. This conversation delved into their history, strategies, and vision, offering a glimpse into why they’ve become a standout player in Mexico’s real estate landscape.
The Rakennus Journey: From Crisis to Innovation
Founded in 1995 during Mexico’s financial crisis, Rakennus emerged as a solution to the housing challenges of the era. As banks offered limited support to buyers, Rakennus innovated by enabling families to finance their homes directly. Over the years, they’ve honed this approach, scaling it to meet the needs of one of the world’s most populated cities.
With over 145 completed projects and more than $27 million in annual sales, Rakennus has become a beacon of innovation and resilience. Their focus on affordable, sustainable housing in prime locations has earned them a reputation as a trusted partner for investors and communities alike.
What Makes Rakennus Stand Out
Targeted Market Focus
Rakennus operates in the mid-market price range, with properties typically priced between $100,000 and $150,000. Their “15-minute living” philosophy ensures that residents have access to work, amenities, and entertainment without needing a car.
Sustainability Leadership
Rakennus is Mexico’s first real estate developer to adopt EDGE certification from the International Finance Corporation (IFC). This certification ensures that their projects save energy, water, and embodied materials while contributing to global environmental goals. Key achievements include:
28% reduction in energy consumption.
37% water savings.
49% reduction in energy embodied in materials.
Revitalizing Communities
Their projects breathe new life into abandoned buildings, transforming them into modern, functional spaces while reducing crime and fostering vibrant communities.
Financial Strength and Investor Confidence
Rakennus structures each project with meticulous financial planning, mitigating risks and offering transparent returns for investors. Their model includes:
Conservative leverage: 30-35% Loan-to-Value (LTV) or 45-55% Loan-to-Cost (LTC).
Fixed-price construction contracts: Ensuring predictable costs and reducing budgetary risks.
Monthly investor reports and updates: Providing complete transparency.
Their 2023 performance highlights include over $41 million invested in construction and property acquisition, with significant returns across multiple projects.
Looking Ahead: Opportunities and Expansion
Mexico City’s Real Estate Potential
Rakennus sees immense potential in Mexico City’s aging real estate inventory, particularly old office buildings and family-owned properties. These assets are ideal for conversion into residential units, addressing the city’s housing deficit while meeting growing demand.
Exploring New Avenues
While their primary focus remains flipping and remodeling, Rakennus is exploring:
Large-Scale Office Conversions: Transforming abandoned office spaces into residential units, leveraging government incentives.
Institutional Rental Housing: Addressing the city’s low supply of rental units, provided they secure favorable funding structures.
Why Invest in Rakennus?
Proven Track Record: 30+ years of experience and over 145 successful projects.
Sustainability Leadership: Pioneers in EDGE-certified projects in Mexico.
High Demand: A growing housing deficit ensures strong market demand.
Attractive Returns: Consistently delivering ROE of up to 100% on select projects.
Community Impact: Revitalizing neighborhoods and creating positive social change.
Learn More and Get Involved
Rakennus offers investors the chance to be part of Mexico’s thriving real estate market while contributing to sustainable urban development. Whether you’re interested in flipping investments, institutional rentals, or contributing to community revitalization, Rakennus provides a compelling opportunity.
Downloads
To access detailed documents such as the Rakennus 2024 Investor Presentation, Key Projects Overview, and EDGE Certification Details, please contact us at thepitchroom@thegi.network.
Explore the full episode of The Pitch Room to hear directly from Mauricio Gebara and Luiz Felipe, and discover how Rakennus is flipping the future of real estate.