Europe Insurance and Lama Hotels (A): The Chief Investment Officer of Europe Insurance

Seguros Europa is a family business group with 70 years' experience as a leading provider of home and life insurance. It has 10 million clients throughout the country and an investment portfolio of ?5 billion, of which approximately 10% is in real estate, including landmark properties and properties in the best areas of the capital and other major cities. The insurance firm distributes its products through numerous brokers and its own agencies, and through service providers and banks with which it has partnership agreements. The third generation has just joined the Board of Directors. Six months ago, the chief investment officer presented the Board with several proposals for the commercial development of a building of 5,500 square meters, 4,000 of which are above ground floor, and which is located in the historic district of the country's second largest city. It is a historic building and the firm's first property acquired in that city, 40 years ago; it had been organized as a multitenant office building, 50% occupied by tenants (lessees) who agreed to relocate, and by Group companies, including the main agency, which had been there since "time immemorial." The historic district has been renovated and is now basically a tourist area with some hotels. The number of homes has been drastically reduced, as well as the number of offices, which have relocated to sites further from the historic district. Aware that they are not maximizing its profitability as an asset, they consider commercial development to be the only solution.