Andreas Johansson is the CEO of Berkovitz Development Group (Belize) Ltd, which has become one of the leading developers in the country and are now expanding into the Caribbean Islands. At the same time, a U.S. subsidiary of Berkovitz works with U.S. and international funds and syndicates, providing acquisition and asset management services in high-yielding markets across the U.S.
Andreas’ path into real estate was not exactly straight forward, leaving high school at age 17 and trying a few different things, he ended up entering the industry at a young age. Now at age 32, Berkovitz has become a major player in the Real Estate market, boasting significant investors and on a personal level Andreas has managed to both raise investment, as well as form partnerships with major sports stars and celebrities.
- How did you get into the property industry and what was your first role within it?
I really stumbled into it more than anything else, almost 10 years ago, when I was 21-22 years old.
I was involved in a few different things back then and was living mostly in Europe at the time. I had some friends who were developing some projects here in the U.S as well as in the Caribbean, and they approached me to build a network of sales agents over in Europe, to sell their projects.
This was back in 2006-2007, when everyone was looking to invest, especially in overseas markets. I managed to do very well out of it, and I realized that this was the business I had to stick with. While working as an agent on behalf of someone else means you do not have ultimate control, as opposed to the role of developer and asset manager that I have today, it taught me a lot about the business and the industry as a whole.
- Tell us a little bit about what you are doing today?
Day to day, I am pretty involved in the operations down in Belize, and check in regularly on construction updates, as well as work directly with investors and agents. Managing a business from afar has certain challenges, but our local management team in Belize are doing a fantastic job and I couldn’t ask for a better local workforce.
I also spend time on our U.S. activities (more information below) and travel frequently from my home base in Orange County, CA out to the Midwest and meet our local staff and partners. I also do some consulting work for brands that are looking to maximize their use of working with influencers, or are looking to work with one of our celebrity or athlete clients.
- You are probably best known for your partnerships with some of the world’s most successful athletes and celebrities, how did that come about, and how do you think it has affected your business?
It actually came about pretty randomly, about 5 years ago. I was introduced by a mutual contact to Dennis Rodman, NBA Hall of famer and 5x NBA champion. We really hit it off, and we ended up creating a vodka brand based around Dennis’ celebrity and persona, which went on to become very successful in Asia. After that, I started to get approached by companies who were interested in our “story”, and I kind of built on that.
At the same time we started to get to work with athletes who were looking to invest money, or otherwise capitalize on their following and influence, and it has become a lucrative part of our business.
I am incredibly fortunate and privileged to get to call Hall of Famers, Olympic Champions, World Record Holders, Premier League winners and many more, my partners and friends, and it is incredibly inspiring to get to be around guys like that. Making it to the top as an athlete and becoming a very successful business actually has a lot in common, something that wasn’t obvious to me a few years ago.
- Are these types of clients different from other HNW clients and investors?
Yes, in some ways they are. What people need to understand, especially about the athletes, is that from the age of 13-14 (sometimes younger) their entire life is pretty much dedicated to becoming the best athletes they can be. That means everything else, including education is secondary, and there’s not much opportunity to gain any real business experience, or even exposure to what we would consider “normal” everyday things.
Professional athletes today have someone to drive them to the airport and put them on the plane, someone to open their bank accounts, someone to pay their credit cards, and someone to shop for them. There are very few things that can’t be taken care of for them by their team, staff, or handlers.
What this means is that all of a sudden you have an athlete making millions every year, but really has very little, if any, experience of handling money. Many fall victims to fraudulent investments presented to them by their ever growing group of “friends”, spend money on high-ticket items that really do not have much long term value, and at the same time fail to keep up on taxes, mortgage payments, or get in some other type of financial trouble. This can in many cases lead to a certain mistrust, especially if you are an outsider.
However, with the right athlete partner, you can build a great relationship. If you are able to find interesting opportunities where you can also capitalize on their network of followers and fans, you can both hugely benefit from the partnership. This is probably the biggest advantage of working with someone “famous” as opposed to a regular investor.
- You also had a stint as a TV host, please tell us about that?
A few years ago, while my primary focus was on growing the spirits business, we won a couple of awards which I guess increased my profile a bit within the industry. I ended up co-hosting a TV show called “Hotmixology” on Fusion (partnership between FOX and Telemundo) which is a show about the spirits business, cocktails, bars etc.
I had a fun time and made some great friends, but ultimately as the show was taping in Denver and I was commuting from our home in Orange County, I decided not to go back for another season.
- How did the transition to developer transpire and when was the Berkovitz Development Group formed?
Berkovitz Development Group in its current form in Belize has been around since 2012, and I formed the company at the same time as I did my first project down there. I had dabbled before with some land transactions here in the U.S, buying large parcels and subdividing it, but when I started to go down there a lot, I decided it was worth doing it on a bigger scale.
I much preferred the role of being a developer, as opposed to being a marketing agent, as you have ultimate control of everything and can shape the project any which way you prefer. I was also fortunate enough that I already had a pretty decent network of sales agents across North America and Europe that I could tap into, which off course helped us become successful.
- How come you picked Belize, and are you staying in the country long term?
We picked Belize back in 2011, when the world was still coming out of a huge recession. I could see that there was a large demand from buyers for property in exotic, tropical locations, but the market just wasn’t ready for a high end project on the islands.
Belize also ticks a lot of the boxes that purchasers as well as agents look for – simple closings, all contracts in English, great value for money, and for those that want it, simple retirement immigration.
We just launched another community with just 20 homes, and we are sitting on plenty of Land ready to be developed and are certainly committed to Belize for the long term. We have managed to build a fantastic local workforce, as well as a great local team, which are some of the keys to success in emerging markets.
- What are some other markets you plan to operate in, and what determines your interest in a new market?
We are currently looking at a couple of beautiful locations across the Caribbean Islands – Bahamas is one, St Kitts is another, Barbados is a possibility… We tend to look at the general trends as far as buyer demand, and with such a strong economic growth here in the U.S, the demand for high end properties tend to go up, and we would like to be able to offer a great product to our customers.
A high end project like that would also be in partnership with some of our great athlete clients, who have plenty of real life experience in that end of the market, as well as an ability to attract buyers and bring attention to the project.
- What were your first property developments and where were they located?
The first project I completed under the Berkovitz flag was called The Palms at Corozal, in Corozal, Belize. We have since gone on to develop a beautiful oceanfront condo building, several building projects, and just launched our newest, exclusive, planned residential community known as “The Enclave at The Palms”, which is located adjacent to The Palms at Corozal, offering 2 bedroom/2 bathroom homes starting from just $99,000USD and upwards.
- What is your involvement in U.S. real estate?
Berkovitz, through one of our U.S. subsidiaries, are very active here in the U.S. In particular we are providing acquisition- and asset management services to a number of large investment funds and syndicates. Our focus is on providing a one-stop solution with acquisitions, refurbishment, and property management all under one roof.
Our focus has been on high-yielding properties, in particular across the Midwest, so we have built a great team across a few select markets out there over the last few years. We also invest in strong assets for ourselves that we buy and hold, and we expect the near future to present some great buying opportunities across the country.
- What difficulties have you encountered operating within these various locations and what advice would you give to other budding entrepreneurs looking to start a business in them? (Laws, local customs, staff etc.)
The first thing you need to do is to find a few advisors who know and understand the local market. Start with a lawyer, and let them help you find the rest of the people you need. Make sure you know what it is you want to do (what type of project, material, location) so you can explain it and show it to whoever is on your team.
The hardest lesson, at least for me, is you need to learn to adapt to local customs and how things are done there. No matter what we believe, we can’t change cultures, and you will be much better off if you can accept that. Timelines for a project in the Caribbean are a lot more “fluid” than they are here in the U., and local Governments and officials don’t always do what you expect them to do, or what they did yesterday.
Learn who the local “influencers” are in the local communities and lean on them to get some help. Give back to the local community, whether through charity, schooling, or employment – If you want to build longevity in a foreign market you need to be seen as a member of the community, not an outsider.
- What nationalities are your biggest customers?
For the U.S. business its split between domestic (American) clients, and investment funds from Europe. In Belize, most of our buyers tend to be North American.
- The Berkovitz Development Group is a leading real estate developer in Belize, how have you achieved that and what would you say distinguishes you from the competition?
I think we have managed to create a reputation as being a customer focused business, always aiming to deliver what we promise, and offer great value for money, and constantly evolving to meet our clients’ needs and desires. In this industry it’s very easy to get stuck in old ways and do things the way they’ve always been done, while we try to be very open to changing market conditions and customer preferences.
- What is the current state of the real estate market in the country and where do you see it going, (what and where to buy etc.)
The demand for Belize real estate has been growing pretty consistently over the years, and I don’t see it slowing down any time soon. Tourism to the country is being promoted pretty heavily, and we’ve seen a huge increase in flights to the country, which always helps to push the demand up.
I think we may be at the point where there are a few too many projects just offering vacant land to “do it yourself” builders (which we did in 2012), and we see more demand now for a finished product instead, where buyers are looking for a site-built single family home.
On a personal note, I also do not see much value right now in the islands of the coast, but would instead focus on areas on the mainland where prices haven’t appreciated as much yet, and where you can get more bang for your buck.
- What does the future hold for you and Berkovitz Development Group?
As far as Berkovitz, we are very excited about 2018 and beyond! Work will progress both at our The Enclave at The Palms community, as well as our oceanfront Diplomat Building. We are also rebranding our website and much of our online presence, which should help increase the profile of the company further, and we are also unveiling some more partnerships with great celebrities and athletes during the first quarter of the year.
Our U.S. business recently contracted with another two large registered funds, which should see the business further expand back here at home. On a personal note, I look forward to seeing the business strategically grow, as well as spend more and more of my time giving back to the communities where we are active, both at home and internationally, meeting and working with other entrepreneurs, and spend more time pursuing philanthropic interests.