MODULO CINCO was founded in October 1975, starting to work in the area of programming and control of works and estimation and control of costs for a group of construction corporations engaged in projects in different cities in the country. The conditions of the real estate activity at that time were characterized by a high inflation -six times that which existed historically -controlled interest rates and very high income resulting from the petroleum which, immediately affected the development of the real estate sector.
Planning and follow-up methods implemented by MODULO CINCO were not considered as immediate needs of the great majority of promoters since, the "bonanza" being experienced did not compel them to strengthen their control mechanisms.
On the other hand, the restrictions posed by the use of computers at the time, regarding costs, difficulty of operation and non-existence of software, restricted the development and the implementing of costs estimation, control and projection systems.
During these years, MODULO CINCO progressively widened its area of action and had the opportunity to intervene in relevant projects in the residential, commercial and office areas.
By 1983, a situation came up after several years of development. The Petroleum income was no longer sufficient to cover for the expenses of the country. This brought about the installation of a controlled foreign currency exchange, a new increase in the inflation and a recession in the economy.
These changes in the economy immediately affected the real estate sector and the projects being developed, started to show problems in the market, in the costs increases, in the financing costs and, there appeared the "cold dwellings": There was demand but no purchase capacity.
As a result of this situation, banks and saving and loan entities were forced to make or intervene projects which, up to that time, were being financed, and they had to play the role of promoters. MODULO CINCO developed techniques to make Technical Financial Auditing and Rescue Management of such real estate projects.
During 1986, the controlled dollar price first reached Bs. 7,50 and by the end of that year it reached Bs.14,50 , as product of the government's need for money. Inflation increased but the interest rate was still "controlled" at very low levels (way below inflation).
This brought along that credits for real estate projects became something very hard to obtain. This added to the increased costs contributed to maintain a recession in the traditional real estate activity (housing, commerce and offices). Numerous tourist-recreational projects rose as an alternative, partially financed by pre-sales, above all in Margarita and Puerto la Cruz, coping with the market of the second house for domestic tourism.
At the same time, as a product of the incentive policies to exports, relevant projects started to be developed in the industrial sector, above all in the aluminum area (with enlargements of Alcasa and Venalum) and in the siderurgical sector (Sidetur and Sidor).
During those years, MODULO CINCO participated in the management of these Macroprojects, specifically in the areas of Planning, Programming and Control applying the concepts and the techniques it had been developing for the real estate projects in the past.
1989 marked the beginning of an opening process of the economy characterized, first, by serious unbalances, such as an unprecedented inflation in the construction costs when the regime of preferential exchange disappeared and an enormous increase in the interest rates as a consequence of the liberation of the same.
The scarce real estate activity being developed during the past few years was severely affected: The recreational projects financed through pre-sales observed the increase in their costs violently. There was an attempt to transfer such increases to the purchasers, however, they were unable to buy said dwellings due to the intolerable financial costs for most of them, producing a crisis in this market which, in many cases was "solved" with the appearance of the multi-property or shared property.
As a consequence of the enactment of the Dwelling Policy law, large housing developments started to be promoted and built in the outskirts of Caracas and in general, in the interior of the country. Such projects were aimed to cope with the demand of this segment of the market.
In spite of the high financing costs, a few months later projects were reactivated in the areas of traditional luxury construction, above all in the commercial sector (office buildings in Caracas), with the particularity that most of these projects were owned by the promoters involved with the commercial banking.
During these years MODULO CINCO had the opportunity to participate in several of the most important projects in the commercial and office sector in Caracas, as well as in the tourist - hotel/recreational - sector in the interior .
The activities of the Firm were oriented to Feasibility Surveys, Costs Preliminary Estimates, Project Financial Projections in addition to the traditional ones of Project Management, Planning, Programming and Control.
By 1992, the effect of inflation and the stabilization of the demand in many sectors of the real estate activity started to be felt as a result of the political instability and the consequential paralyzing of the plans to open the economy. Costs at actual values increased faster than sales prices.
MODULO CINCO made several researches aimed to determine trends in the real estate market of commercial use as well as those of residential use.
Since 1994, MODULO CINCO started to be contacted by transnational companies wanting professional advisory in the assessment of alternatives for the acquisition or leasing of office spaces. This event was rooted in the fact that, as a real estate consultant it was not restricted in its search for those properties where it might have obtained a sales commission but, it could really look for the most convenient property for the client, not affecting him negatively when wrongly reducing the existing demand. Being able to maintain an objective position in its analyses, it aimed efforts in favor of the client's interests through the appraisal of choices, establishment of strategies and when required, the negotiation of conditions.
The year 1994 was characterized as the year of the financial crisis, a fact of unprecedented scale in the country and perhaps in the world.
Henceforth, MODULO CINCO was hired by intervened banks such as FOGADE to make Appraisals of the different kinds of assets such as finished buildings and commercial sites where bank agencies operated, to Feasibility Surveys of macroprojects paralyzed before termination.
The new real estate projects were seriously affected by the crisis per se, as well as by the recession and the inflation which were consequences therefrom. Most of the office projects being built in Caracas were handed over to the Government under the entity of FOGADE. The same occurred with the projects in the tourist area in the interior of the country. The few projects that continued, were affected by a considerable decrease in demand, increase in costs as a consequence of the inflation/devaluation and therefore, due to the fall of actual prices.
During 1996, the increase of the petroleum income and the restart of the economy opening resulted in a reactivation of demand in certain areas of the real estate sector, mainly in the segments of trade, offices and luxury housing. This process has produced a reactivation of the construction of this kind of properties.
MODULO CINCO began to engage in the Management of office Conditioning Projects for relevant corporations, namely, the new main office of Movilnet in Torre Sur, Centro Comercial El Recreo. In the residential area, it engaged in the Management of a Civil Association and it participated in the Management of several similar projects with EDIVIAL and ARKILINEO, two of the most important promoters in this area.
In 1998, as a result of the uncertainty of political character and of a sudden fall in the petroleum income, the real estate activity suffered a contraction once more, mainly in the area of high level housing. In counterpart, there were relevant commercial developments while the activity in the office area maintained certain equilibrium between the offer and the demand though in levels lower than previous years. The constant variation suffered by the macroeconomic variables in the last 10 years have particularly affected the real estate activity, as a consequence of the long time it takes to projects to become feasible, to be developed and be placed in the market.
This characteristic that seems to have come for good, means that a conscious private promoter shall, before starting a real estate investment and regardless of the scale, assess the market, the competence, the particular advantages and weaknesses, costs, etc., with serious objectivity and, shall return to the search for a productivity lost, perhaps, during the years of an apparent bonanza.
In these conditions, being able to rely on an independent professional organization deeply aware of the country's real estate situation and contributing therewith in the planning, control and adjustment of its development to such new realities shall result in a rather interesting choice.
PERSONNEL'S EXPERTISE AND PROFESSIONAL BACKGROUND
In this chapter we present our professional staff, summarizing their experience and academic background.
Flexibility and the capacity to adapt to any specific job is one of MODULO CINCO'S characteristics, which in turn allows us to benefit from the client's resources and in this way reduce costs. At the present MODULO CINCO is formed by the team of professionals we present in the following pages.DIRECTORS
Leopoldo Cottin Herrera Industrial Engineer, 1970
Director - Charter MemberCarlos Lares Monserratte Civil Engineer, 1971
Director - Charter MemberJuan Cordero Alvarez Civil Engineer, 1975
Director and AssociateIn addition to our regular staff, MODULO CINCO has the technical support of external advisors in different areas of expertise which can be subcontracted for specific projects with requirements not covered by our regular staff. Among these external advisors we can mention:
• Venezolana de Avalúos Real Estate Appraissals • Escritorio Lares Martínez Legal Advisors • Miguel Chacón y Asoc. Real Estate Market Analysis
