/ Joaquín Solar in Latin Counsel: The New Landscape of the Chilean Real Estate Market and the Industry’s Challenges
April 1, 2026Latin Counsel published an interview with Joaquín Solar Larraín, partner in charge of the Real Estate and Construction practice at Alessandri, in which he analyzes the current state of the Chilean real estate market, the sector’s main regulatory and financial challenges, and the evolving role of legal counsel in a context of greater structural complexity.
In the conversation, Solar addresses the impact of regulatory uncertainty, changes in permitting processes, and more restrictive financing conditions, along with the need for more strategic, integrated, and preventive legal counsel. He also discusses the priorities for consolidating a real estate practice capable of supporting complex projects across the board.
Below, we share the full interview published by Latin Counsel.
LATIN COUNSEL: What factors influenced your decision to leave your role as in-house counsel at a major real estate group to join Alessandri as a partner in the current market context?
Joaquín Solar: I have always enjoyed challenges and putting myself to the test. One of the main factors was taking on the responsibility of leading the real estate practice to advise our clients beyond building construction, putting our expertise to work in the development of various types of real estate assets, such as commercial, industrial, logistics, hotel, mixed-use, or rental projects, among others. This also allows us to capitalize on 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 plan to structure and position the firm’s real estate practice?
Joaquín Solar: Having had the opportunity to experience the full cycle of a real estate project as an in-house counsel provides a comprehensive view of the business. This facilitates the proactive structuring and planning of the project’s various risks, integrating legal, regulatory, financial, and operational variables within a single strategic framework. Legal counsel cannot limit themselves solely to solving problems; they must participate in the design phase, anticipate scenarios, and support critical decisions from the initial stages. I believe this will be one of the differentiating factors of the service we aim to offer our clients.
LATIN COUNSEL: From your perspective, is the sector facing a temporary slowdown or a deeper structural transformation?
Joaquín Solar: We are facing a transformation that is more structural than circumstantial. The last real estate cycle demonstrated that the traditional development model we were accustomed to is no longer the norm. Today we face an industry that combines greater regulatory and legal demands, more restrictive financial conditions, increased litigation, a less predictable legal environment, and greater social and community pressure. All of this forces us to rethink the structuring of projects from the outset, in a context that demands greater sophistication. Ultimately, it is not enough to wait for the sector’s economic recovery; it is necessary to adapt to a new logic for structuring, developing, and executing projects.
LATIN COUNSEL: What are currently the main regulatory bottlenecks affecting the development of new projects?
Joaquín Solar: In my view, the main challenges are associated with obtaining sector-specific permits, the excessive regulatory burden faced by projects, and the interpretive criteria of certain administrative authorities, which ultimately affect the industry’s legal certainty and access to financing. Regulatory uncertainty and permitting processes are currently one of the main bottlenecks. The variability of criteria and increased exposure to legal challenges require incorporating broader risk management margins from the earliest stages.
LATIN COUNSEL: How have timelines and levels of scrutiny in permitting processes evolved?
Joaquín Solar: Timelines have lengthened, and given the level of regulatory requirements, there is now a much more exhaustive review of technical, environmental, and urban planning documentation. This demands greater sophistication in project structuring and planning, as well as allocating more resources to their development. The permitting process is no longer just another administrative phase; it has become a strategic pillar of the project. However, I believe there is political consensus regarding the need to address these issues through legislative initiatives that we hope will be approved soon to consolidate the sector’s recovery.
LATIN COUNSEL: To what extent are environmental and urban planning regulations redefining project structuring?
Joaquín Solar: Today, environmental and urban planning variables are no longer secondary; they have become central elements in the design, planning, and structuring of projects, given their impact on costs, timelines, and regulatory risks. A project that is poorly designed from an environmental or urban planning perspective can completely undermine its technical and economic viability, and may even result in criminal liability under the provisions of the new Economic Crimes Law.
LATIN COUNSEL: How are more restrictive financing conditions impacting the allocation of contractual risks?
Joaquín Solar: The new financing conditions and their restrictions have not only forced a rethinking of project capital structures and industry business models, but have also required a more rigorous review of the risks associated with each development. These risks must be evaluated in detail to determine how to mitigate them in the various contracts associated with the development and construction of projects. Today, moreover, regulatory restrictions applicable to financial institutions—such as the Basel standards—require greater certainty regarding permits, financial provisions, guarantees, sales levels, and corporate structures before disbursing capital.
LATIN COUNSEL: Have you observed changes in the way banks and investors assess real estate risk?
Joaquín Solar: Yes. The most significant impact began to be observed in the second half of 2022, following the pandemic, when the effects of the partial collapse of Chile’s capital market—resulting from withdrawals from pension funds—became evident. It was a kind of macroeconomic and financial shock that radically changed the way banks assessed real estate risk.
Added to this was annual inflation exceeding 13%, which led the Central Bank to sharply raise the monetary policy rate. This produced a very significant increase in interest rates across the financial system, making the cost of money more expensive and raising credit risk.
Coupled 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, stricter restrictions on client risk assessment, and higher down payment requirements, in a context where real wages in Chile have not grown, creating what many have called a “perfect storm.”
LATIN COUNSEL: What types of disputes are becoming more prominent in the sector?
Joaquín Solar: We are seeing a higher incidence of disputes linked to a lack of legal and regulatory certainty, as well as differences in the interpretive criteria of administrative authorities. In some cases, there are divergent criteria among different agencies, which has led to an increase in litigation regarding projects, especially in administrative and environmental matters.
LATIN COUNSEL: Is there a significant increase in disputes related to cost overruns, delays, or contract performance?
Joaquín Solar: Yes, although I would say this was a more pronounced phenomenon during the pandemic than it is today. During that period, we all had to adapt to a new reality marked by rising material costs and financial volatility, which generated significant contractual tensions in project development. This has placed greater emphasis on early contingency planning and the exploration of new dispute resolution mechanisms. Indeed, one of the services we aim to offer our clients is the support of our litigation and arbitration team, which has extensive experience in this area.
LATIN COUNSEL: How should legal counsel be integrated into a project’s financial modeling and capital structure?
Joaquín Solar: From the very beginning, in the earliest stages. Legal counsel must be part of the initial business design and participate in defining the capital structure, financing terms, corporate governance mechanisms, and the assessment of the urban planning and regulatory risks specific to each project.
LATIN COUNSEL: From a risk management perspective, what legal aspects are often underestimated in the early stages of development?
Joaquín Solar: Urban planning and regulatory risks, especially when projects are structured based on optimistic interpretations of urban planning regulations. Changes in the administrative authorities’ interpretive criteria are also underestimated, as are the actual timelines for project evaluation, potential regulatory changes that could lead to cost overruns, and, in the current context, macroeconomic or geopolitical risks that may impact key business variables, such as interest rates or access to financing. These risks are often analyzed in isolation, when in reality they are part of the same ecosystem.
LATIN COUNSEL: What lessons from previous cycles do you consider particularly relevant for developers in the current scenario?
Joaquín Solar: Financial discipline, risk diversification, constant strategic planning, and the need to maintain flexible organizational structures capable of adapting to market cycles. Challenging periods teach us that resilience is built before a crisis strikes.
LATIN COUNSEL: How does direct experience in project execution and financing strengthen the ability to anticipate contingencies?
Joaquín Solar: My in-house experience, leading Imagina’s Procurement team during a particularly challenging period for the industry, allowed me to gain a practical perspective that makes it easier to anticipate scenarios and design creative and viable solutions, not only from a legal standpoint but also a financial one.
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 have even gained a larger share in a smaller, less developed market. On the other hand, some smaller players, with less access to capital or financing, have had to adapt through co-development schemes or other strategic alliances to ensure the continuity of their businesses, even at the cost of reduced profitability.
This has led to more sophisticated structures, with clear mechanisms for control, exit, and risk allocation, as well as greater demands regarding corporate governance and alignment of incentives.
LATIN COUNSEL: How important is cross-functional integration with areas such as tax, regulatory, or dispute resolution in complex projects?
Joaquín Solar: It is essential, not only in particularly complex projects but also in smaller-scale developments. Real estate projects cannot be approached from a single discipline, as multiple areas of law coexist within the same business: corporate, tax, project financing, civil and arbitration contingencies, consumer protection, labor law, among others. Early coordination among these areas allows for a comprehensive anticipation of regulatory, contractual, and tax impacts.
LATIN COUNSEL: How have real estate clients’ expectations regarding their external advisors evolved?
Joaquín Solar: Today, they expect strategic thinking, the ability to anticipate and resolve problems effectively, a genuine understanding of the business, and proactive management of the risks inherent in each project. Merely reactive advice has lost ground to preventive, structural, and more sophisticated advice.
LATIN COUNSEL: Is the focus shifting from reactive advice toward a more sophisticated preventive strategy?
Joaquín Solar: Absolutely. The current environment demands advanced planning and preventive analysis of the various scenarios that may arise. Prevention has become a central element of value creation.
LATIN COUNSEL: What competitive advantages can a full-service firm offer compared to specialized boutiques in the current context?
Joaquín Solar: The ability to integrate regulatory, tax, corporate, financial, and litigation matters within a single strategy allows for a more comprehensive and personalized understanding of each client’s business. My in-house experience has shown me that interdisciplinary coordination makes a substantial difference.
LATIN COUNSEL: What are your strategic priorities for consolidating and expanding the practice over the next three to five years?
Joaquín Solar: To consolidate a practice that combines technical depth with a strategic and comprehensive understanding of the real estate business and its cycles, enabling early integration with other areas of the firm and supporting projects with greater structural sophistication. The goal is to position the practice as a leader in comprehensive advisory services for complex real estate developments in an increasingly demanding regulatory and financial environment.
