Time delays and cost would be an additional concern. I would, therefore, go for Brazilian-produced material and forego the glass.
In regards to the gold leaf, I would also go for the cheaper local material, but I may decide to conduct some impromptu surveys amongst potential businessmen of the market that I am seeking in order to identify their aesthetic opinions in regards to internal and external architectural decoration. I would use the results of these surveys to lead me in my final selection.
I would prefer to lease the building to multiple, rather than to one single tenant, particularly given Brazil's lack of foreclosure laws and its bungling leasing system. Multiple tenants would pose less of a risk and would also, simultaneously and hopefully, provide me with the desired publicity that I would like for this development to attract further lessees in the future. Multiple tenants may also induce public interest in the project that may lead to further acquisition and development of a future similar scheme. From a practical perspective too, given that this is a 36-storeyed building, Dolman would have no choice but to lease to multiple tenants.
I would prefer international to local tenants for various reasons: international tenants would be less aware of the complicated Brazilian leasing laws and of the building's tragic past as well as technical difficulties and, therefore, less intimidated, from leasing the location. Furthermore, international tenants may likely be more influenced by Rio's fantastic view and tourist opportunities and more taken by its culture (since it is fresh and objective to them) than locals are. I may have and easier time, therefore, in convincing international tenants to buy than would have with local ones.
Regarding the elevator issue and considering the fact that the Brazilian Civil Law Code is "an intricate and complex legal system that [leaves] room for endless legal battles and weak enforceability" (Segal & Pinho, 2004, p.10), I would not involve myself in determining who should be responsible and pay...
My budget is already limited and time running out. Law suits (given the Brazilian Civil Law Code) may well be time and cost consuming as well as getting me nowhere. Adverse publicity may also consequent. I would focus on attempting to find the least costly and time-consuming solution to the problem, possibly pursuing the route of soliciting municipal approval, despite bureaucratic meanderings.
Is the REIT a good idea? What are the risks?
Steve may not have an option in this regards given the fact that the exit strategy was problematic and its case complicated. One alternative would be to sell all, or part of, Torre Almirante to international investors, but the procedure could create conflict-of interest situations for leasing. The other option, a Fundo Imobiliario (FI), a Brazilian REIT, offered potential, but the system was comparatively young offering only 60 funds with an aggregate of $667 million, against the aggregate of $200 billion offered by the U.S. RIET market.
On the other hand, the FI was promising in that it issued for individual projects, as compared to pools of projects offered by the U.S. RIET. This would be more suitable for Steve's position. However, since the RIET would be negatively impacted by unsuccessful Brazilian projects, it may be more cautious in accepting Dolman's building development, given its innovation and technical difficulties. Added to this was the problem that no viable secondary market yet existed in Brazil for re-purchasing and selling FI shares. Still this was the best that Dolman had to go on and, most promising of all were prospects for encouraging progress of the Brazilian FI market. It would be a risk for Dolman, but then purchase and development of the Tower itself had been a tremendous risk, and the RIET seems to be the best option for Dolman in order to effectuate his successful exit strategy.
References
Poorvu, W.J. (2003). Financial analysis of real property investments
Segal, A.J. & Reisne, R. (2004). Hines goes to Rio. 9-805-001.
