Alessandri Strengthens Real Estate Practice with Joaquín Solar Appointment

"The industry is going through a structural transformation, not just a temporary slowdown"

Chilean firm Alessandri has strengthened its Real Estate and Construction practice by appointing Joaquín Solar Larraín as partner, at a time when market participants increasingly describe the local real estate industry as undergoing a structural adjustment rather than a temporary slowdown.

Solar joins the firm after serving as legal counsel for Grupo Inmobiliario Imagina from 2019 to 2026, a period during which he participated in the structuring, development, execution and financing of real estate projects across different market cycles, both in Chile and in other jurisdictions in the region. Drawing on that in-house experience, Solar says his objective is to help position the firm’s practice as a strategic advisor capable of integrating regulatory, financial and operational considerations from the earliest stages of project development.

His arrival comes amid a market environment marked by tighter financing conditions, greater regulatory scrutiny and increasing complexity in the processing of sectoral permits and administrative authorizations. According to Solar, the industry now faces a combination of stricter regulatory requirements, more demanding capital conditions, rising litigation and stronger community and environmental pressures, factors that are reshaping the way projects are structured and executed.

Patricio Rámila, partner in the firm’s Litigation and Arbitration practice, stated: "Having a partner with direct industry experience strengthens our capacity to anticipate and resolve disputes in the real estate and construction sector, particularly in a context of increased regulatory and contractual demands."

For his part, Cristián Pérez, partner and CEO of Alessandri, added: "The addition of Joaquín Solar reinforces a real estate practice that is articulated with the firm’s litigation, regulatory, tax and corporate areas, and enables us to support complex projects in a comprehensive manner."

In the following interview, Solar discusses the structural changes affecting Chile’s real estate market, the regulatory and financial risks shaping project development, and the strategic objectives behind this new stage of his professional career.

LATIN COUNSEL: What factors influenced your decision to leave your role as in-house counsel for a major real estate group and join Alessandri as a partner in the current market context?

Joaquín Solar: I have always been motivated by challenges and by the opportunity to test myself in new environments. One of the key factors behind my decision was the possibility of leading the firm’s real estate practice and advising clients beyond the construction of residential buildings, placing our experience at the service of the development of a broader range of real estate assets, including commercial, industrial, logistics, hospitality, mixed-use and rental projects. This also allows us to take advantage of the current momentum in the industry, where the first signs of recovery are beginning to emerge.

LATIN COUNSEL: How does your in-house corporate experience influence the way you intend to structure and position the firm’s real estate practice?

Joaquín Solar: Having experienced the full lifecycle of a real estate project as in-house counsel provides a comprehensive understanding of the business. It enables one to structure and anticipate project risks proactively, integrating legal, regulatory, financial and operational considerations within a single strategic framework. Legal counsel cannot be limited to reacting to problems once they arise; it must be involved in the design phase, anticipate potential scenarios and support key decisions from the earliest stages of the project. I believe that approach will constitute one of the distinguishing features of the services we intend to offer our clients.

LATIN COUNSEL: From your perspective, is the sector facing a temporary slowdown or a deeper structural transformation?

Joaquín Solar: In my view, the industry is undergoing a transformation that is structural rather than merely cyclical. The most recent real estate cycle demonstrated that the traditional development model to which we were accustomed is no longer the prevailing standard. Today the sector faces stricter regulatory and legal requirements, tighter financing conditions, increased litigation, a less predictable legal environment and greater social and community scrutiny. These factors compel developers to rethink project structuring from the outset in a context that requires greater sophistication. Ultimately, it is not sufficient to wait for an economic recovery; the industry must adapt to a new framework for structuring, developing and executing projects.

LATIN COUNSEL: What are currently the principal regulatory bottlenecks affecting the development of new projects?

Joaquín Solar: In my opinion, the principal challenges relate to the process of obtaining sector-specific permits, the increasing regulatory burden imposed on projects and the interpretative criteria applied by certain administrative authorities, which ultimately affects the legal certainty of the industry and access to financing. Regulatory uncertainty and permitting processes have become the main bottlenecks. The variability of administrative criteria and the greater exposure to legal challenges require developers to incorporate broader risk-management margins from the earliest stages of a project.

LATIN COUNSEL: How have the timeframes and levels of scrutiny evolved in permitting processes?

Joaquín Solar: Timeframes have lengthened and, given the regulatory requirements imposed on projects, there is now a far more rigorous review of technical, environmental and urban planning documentation. This requires greater sophistication in project structuring and planning, as well as the allocation of additional resources to project development. The permitting process has therefore ceased to be merely an administrative stage and has become a strategic axis of the project. That said, I believe there is political consensus regarding the need to address these issues through legislative initiatives that we hope will be approved in the near term to support the reactivation of the industry.

LATIN COUNSEL: To what extent are environmental and urban planning standards redefining the structuring of projects?

Joaquín Solar: Environmental and urban planning considerations are no longer ancillary variables; they are now central elements in the design, planning and structuring of projects due to their impact on costs, timelines and regulatory risk. A project that is inadequately structured from an environmental or urban planning perspective may undermine its technical and economic feasibility entirely and could even give rise to criminal liability under the new Economic Crimes Law.

LATIN COUNSEL: How are tighter financing conditions affecting the allocation of contractual risk?

Joaquín Solar: The new financing conditions and restrictions have not only required a reassessment of project capital structures and business models within the industry but have also necessitated a far more rigorous evaluation of each project’s risks. These risks must be carefully assessed in order to determine how they should be mitigated and allocated in the various agreements governing project development and construction. In addition, regulatory constraints applicable to financial institutions — such as Basel standards — require greater certainty with respect to permits, financial provisions, guarantees, pre-sales levels and corporate structures before capital is disbursed.

LATIN COUNSEL: Have you observed changes in the way banks and investors assess real estate risk?

Joaquín Solar: Yes. The most significant shift began to emerge in the second half of 2022 following the pandemic, when the effects of the partial erosion of Chile’s capital market, resulting from withdrawals of pension fund assets, became evident. This represented a macroeconomic and financial shock that fundamentally altered the way banks assessed real estate risk. At the same time, inflation exceeded 13 percent annually, prompting the Central Bank to raise the monetary policy rate significantly in order to contain it. This led to a sharp increase in interest rates across the financial system, increasing the cost of capital and credit risk. Together with the regulatory requirements of Basel III, this affected both the financing of real estate and construction companies and the demand from potential buyers. The result has been higher mortgage rates, more restrictive risk assessments for borrowers and higher down payment requirements, in a context where real wages in Chile have not grown — a situation that many describe as a "perfect storm."

LATIN COUNSEL: What types of disputes are becoming more prevalent in the sector?

Joaquín Solar: There is a growing incidence of disputes related to the lack of legal and regulatory certainty, as well as differing interpretative approaches adopted by administrative authorities. In certain cases, divergent interpretations among public agencies have led to a greater degree of judicialization of projects, particularly in administrative and environmental matters.
LATIN COUNSEL: Is there a noticeable increase in disputes related to cost overruns, delays and contractual performance?

Joaquín Solar: Yes, although I would say that this issue was more pronounced during the pandemic than it is today. During that period the industry had to adapt to a new reality marked by sharp increases in material costs and financial volatility, which generated significant contractual tensions in project development. This has reinforced the importance of early contingency planning and the exploration of alternative dispute resolution mechanisms. One of the services we intend to provide to our clients is precisely the support of our litigation and arbitration team, which has extensive experience in this field.

LATIN COUNSEL: How should legal counsel be integrated into the financial modelling and capital structure of a project?

Joaquín Solar: Legal counsel should be integrated from the outset, at the earliest stages of project development. Lawyers should participate in the initial design of the business structure and contribute to defining the capital structure, financing arrangements, corporate governance mechanisms and the assessment of the urban planning and regulatory risks associated with each project.

LATIN COUNSEL: From a risk management perspective, which legal aspects tend to be underestimated during the early stages of development?

Joaquín Solar: Urban planning and regulatory risks are frequently underestimated, particularly when projects are structured on the basis of optimistic interpretations of planning regulations. Developers may also underestimate the potential for changes in the interpretative criteria of administrative authorities, the actual timeframes for project approvals, possible regulatory reforms that may generate unforeseen cost increases and, in the current environment, macroeconomic or geopolitical risks that may affect key business variables such as interest rates or access to financing. These risks are often analyzed in isolation, when in reality they form part of the same ecosystem.

LATIN COUNSEL: What lessons from previous cycles do you consider particularly relevant for developers in the current environment?

Joaquín Solar: Financial discipline, risk diversification, continuous strategic planning and maintaining flexible organizational structures capable of adapting to market cycles. Challenging periods teach us that resilience must be built before a crisis materializes.
LATIN COUNSEL: How does direct experience in project execution and financing strengthen the ability to anticipate contingencies?

Joaquín Solar: My in-house experience leading the Procurement team at Imagina during a particularly challenging period for the industry provided me with a practical perspective that facilitates the anticipation of potential scenarios and the design of creative and viable solutions — solutions that are not only legally sound but also financially viable for project development.

LATIN COUNSEL: Are you observing changes in the structuring of joint ventures or strategic alliances in the sector?

Joaquín Solar: Yes. On the one hand, the major players in the industry have maintained their presence and, in some cases, have gained a larger share in a smaller and less developed market. On the other hand, smaller players with more limited access to capital or financing have had to adapt through co-development structures or other forms of strategic alliance in order to ensure business continuity, sometimes at the expense of profitability. This has resulted in more sophisticated arrangements incorporating clear governance mechanisms, exit strategies and risk allocation provisions.

LATIN COUNSEL: How important is cross-practice integration with areas such as tax, regulatory and dispute resolution in complex projects?

Joaquín Solar: It is essential, not only for particularly complex projects but also for smaller developments. Real estate projects cannot be approached from a single legal discipline, as they involve multiple areas of law, including corporate, tax, project finance, civil and arbitration disputes, consumer protection and labour law. Early coordination among these areas enables a more comprehensive anticipation of regulatory, contractual and tax implications.

LATIN COUNSEL: How have real estate clients’ expectations of their external advisors evolved?

Joaquín Solar: Clients now expect strategic thinking, the ability to anticipate and resolve problems effectively, a genuine understanding of the business and proactive risk management aimed at mitigating the contingencies inherent in each project. Purely reactive advice has gradually been replaced by more preventative, structural and sophisticated advisory services.

LATIN COUNSEL: Is the focus shifting from reactive advice to a more preventative and strategic approach?

Joaquín Solar: Absolutely. The current environment requires advanced planning and preventative analysis of the different scenarios that may arise. Prevention has become a key component in the creation of value.

LATIN COUNSEL: What competitive advantages can a full-service firm offer compared with specialised boutiques in the current environment?

Joaquín Solar: The ability to integrate regulatory, tax, corporate, financial and litigation considerations under a single strategic framework allows advisers to develop a more comprehensive and tailored understanding of each client’s business. My in-house experience has shown me that effective interdisciplinary coordination can make a significant difference in the success of complex projects.

LATIN COUNSEL: What are your strategic priorities for consolidating and expanding the practice over the next three to five years?

Joaquín Solar: The objective is to consolidate a practice that combines strong technical capabilities with a strategic and comprehensive understanding of the real estate business and its cycles. This involves integrating our work with other areas of the firm at an early stage and supporting projects with a higher level of structural sophistication. Ultimately, the goal is to position the practice as a leading platform for comprehensive advisory services in complex real estate developments within an increasingly demanding regulatory and financial environment.