How did your family get into the real estate business?
Isaac Steiner Our father had a background in building social housing in the early 1970s. In 1978, after spending a year in Miami and seeing the high-quality condominiums available there, with amenities and green spaces, he decided to bring that same concept of residential development to Mexico, our first project of this kind. Frondoso started construction in 1979.
Elias Steiner At that time in Mexico, there were many nice apartments and condominiums, though none of them had generous green areas, gymnasiums, or nice common facilities. It was rare to see a development with many trees in Mexico City.
How important is architectural style in your developments?
Rubén Steiner It is important to have a great architectural project, because at the end of the day people will spend plenty of time there and they have to have the spaces well designed. Since the beginning, we have tried to ensure that all of our architectural designs are timeless. We do not focus on trends; we want our buildings to look beautiful now and in another 30 years. For example, we stay away from modern trends that will look outdated in a few years' time, like some buildings you might see from the 1990s.
IS When we took over the business from our father we decided not to have an architect in-house; however, we opted to subcontract each project to the best architect. If you always have one architect doing your projects you are chained to the same style or views and it lacks innovation. Depending on the project, we find the best architect to design it.
What do you do to stay ahead of your competition?
RS One of our main challenges now is that everyone is replicating our model, or doing smaller projects with fewer amenities. There are also many high-quality projects being constructed, although they might not have as much green space as we do, which is something that we focus on; they prefer to fill the space with as many apartments as they can. Our competition is getting better and the challenge now is for us to innovate. Our goal now is service and that is the direction that we want to focus more on, because the rest can be easily copied; service, however, takes a long time to copy.
Geographically, you have focused mostly on Mexico City and the surrounding area. Do you see growth potential in other smaller cities?
IS Mexico City has been our main focus. We have developed projects in a few other cities like Cancún, Acapulco, and Tijuana. We are now exploring the possibility of expanding into the Bajío with projects in Irapuato, León, Aguascalientes and Querétaro. There is definitely plenty of opportunities outside of Mexico City. The availability of land is becoming restricted in Mexico City. We visited León recently and were astonished by how much the city had changed. There is a great deal of potential there and it has become strategic because of the automotive industry. Cities like these are growing, and while they were developing housing with some amenities, they are not innovative and we think we can bring something new into those places. Vertical living is still new to many Mexicans; however, it is becoming a trend, such as in Monterrey, after Mexico City. In cities such as Salamanca and León, it is starting though there are still few apartment buildings.
What makes Frondoso a great destination for investors looking for exposure to the Mexican real estate sector?
IS We have been in the market for more than 40 years. We have survived all of the ups and downs in the market and we continue to bounce back, we know the market. We have worked with international funds, particularly from the US; we know what they want, we know how they operate, and we are well organized and ready to receive funds from the US, or any other country. Our monthly reports are clear; we are an institutionalized family business and have a vision for what Mexicans want.