? Billionaire real estate tycoon Jorge Pérez put his two millennial sons through a nearly 20-year-long succession plan before handing over the reins as Related Group’s CEO in March. Jon Paul and Nick—now leading the empire managing a $40 billion development portfolio—had to get an MBA, work for a competitor for five years, and work their way up the ranks. By making his kids cut their teeth on the industry, they skirted nepotism criticism and family drama.

Miami has a diverse real estate landscape, from the gleaming high-rises in Paraíso Bay, to mixed-income communities in Marti Park. But many of these buildings have one thing in common: They were built by real estate mogul Jorge M. Pérez, who just handed down his empire to his sons.

The Argentine-American entrepreneur first launched Related Group in 1979, erecting everything from affordable housing to luxury skyscrapers in cities including Miami, Fort Lauderdale, Las Vegas, and Puerto Vallarta, Mexico. The real estate empire with a $40 billion development portfolio has built more than 120,000 residences during the past four decades, with over $50 billion in property sold so far. Pérez has been instrumental in changing the Florida landscape—dubbed the “Condo King of Miami”—by building housing projects integrated with art and culture.

After 46 years at the helm, Pérez was ready to pass the torch to his sons, Jon Paul and Nick—but he didn’t make it easy for them. To make sure his company was in good hands and to sidestep nepotism claims, the 75-year-old billionaire sent his kids on a quest: get an MBA, work for a competitor for five years, and spend over a decade rising the ranks. The succession process stretched around 18 years.

“When I felt particularly—beginning with Jon Paul—that they could come to work in the company, what I didn’t want is for people in the company to feel that they were entitled, that the reason that I gave them a position is because they were just my sons,” Jorge tells Fortune.

Jon Paul became CEO of the company in March, while Nick is president of Related Group’s condominium division. Jorge now sits as founding executive chairman, providing wisdom to his sons, but stepping aside for them to lead the company. The plan was perfectly curated to make the transition as smooth, drama-free, and advantageous as possible, Jorge says.

“What I try to do very consciously is let the world know that my two sons were ready for those jobs. That the company was not going to suffer one iota in the transition, but it was actually going to become better,” Jorge says. “They still have me with the 45, 50 years of experience in real estate, plus now they have the new blood that has new ideas, that knows how the younger market thinks better than a 75-year-old.”

Proving himself with an MBA, outside experience, and a 13-year corporate climb

Most children in successful families may expect to be handed the keys to the company—but Jorge wanted Jon Paul and Nick to cut their teeth in the real estate world.

“I required each of them to work five years outside the company in something they liked, and they both went to New York,” Jorge says. “In addition to that, because I wanted them to be well-prepared educationally, I made them do an extra two years getting an MBA.”

Jon Paul set out on his journey to CEO by starting in 2007 as an analyst at Related Companies, a New York-based real estate firm owned by family friend Stephen Ross. Until 2022, Ross also owned a minority stake in Pérez’s business. During Jon Paul’s five-year stint, he worked on luxury rentals and condos from Hudson Yards and the Time Warner Center. In 2008 when development had slowed, he worked on the purchasing and finishing of hundreds of projects. The president of Related Companies, Bruce Beal Jr., became a mentor for Jon Paul.

“I was put into an environment that was very high strung—12 to 14 hours a day. A lot of technical finance, financial underwriting,” Jon Paul says. “The time there was really good for me, as far as understanding the economic side of the business, which helped me when I came down here.”

By 2012, Jon Paul finally had a foot in the door at Related Group; starting off in the rental group, he spent the next 13 years rising through the ranks, learning the ins-and-outs of the business. While working at the family business, he earned an MBA in 2015 from Northwestern University’s Kellogg School of Management, one of the top business programs in the U.S. When COVID-19 hit and teams were sequestered to their home offices, Jon Paul assumed an executive role as president, finally stepping into leadership in 2020.

“Even when they came here, they first became an assistant manager to a project, then a project manager, so they would see both sides of the company,” Jorge says. “Then he started running the day-to-day of the business. I felt that I no longer needed to be the CEO, in which there was a greater amount of decision making.”

Jorge says through this rigorous and gradual succession plan, Jon Paul earned his stripes, and the senior team felt his sons proved they can lead Related Group. The real estate founder also tracked public sentiment, ensuring the transition would be made without hurting the business.

“People always ask, ‘Are you nervous? You have such big shoes to fill.’ I tried not to think about that, and just show my worth with my results,” Jon Paul says. “It was never, ‘You come here and you automatically get that.’ It was step by step, allowing me to grow and at the same time earn the respect of the people within the company.”

Sidestepping the potential messiness of succession planning

When planning a family succession, it’s one thing to try and quell public and board room tension—but it can be a whole other battle at home. Jorge says he’s seen other businesses get caught up in family drama, but he made sure there would be no bickering over Related Group.

“You talk to a lot of friends that had issues. Many of them, the succession has turned [family members] into enemies, as opposed to friends, and families that split up over it. I’m very hard headed, so if I told you it’s an easy process, it’s not right,” Jorge says.

Jorge notes “some people can never let go”—especially if they built the company from the ground-up, like he did with Related Group. And as a father, it’s natural for children to want to disregard the advice of their parents to pave their own way. He says succession is a give-and-take; his younger sons may have never lived through market downturns or company crises, but it’s still time for them to lead. Maintaining that balance has been key to the Pérez family keeping a healthy family dynamic.

“Those tensions happen. We’ve been very lucky that we’ve been able to work around all of those,” Jorge says. “It takes part of them saying, ‘Wow, he’s got 45 years experience.’ And for me to say, ‘Hey, this has got to be a cooperative effort, in which you guys are becoming more and more the decision makers. We’re still very close, all of us, as a family.”