Interview with Drew Aaron:
Mallorca as an Entrepreneur and
The Lionsgate Capital Group
Drew Aaron is an American Entrepreneur who has made a name for himself on the island of Mallorca by expanding the cultural offering in Mallorca. Since he moved with his family from New York to Mallorca in 2016, what was supposed to be a retirement, became the beginning of creating The Lionsgate Capital Group of Companies, based in the heart of Palma de Mallorca. It covers a curated series of luxury lifestyle businesses including a luxury financing firm, a contemporary art gallery with multiple spaces, and the ultimate luxury boutique for bags, watches and accessories which are shipped worldwide, amongst other exciting businesses.
Drew Aaron’s adventure on the island started by first seeking and purchasing a family home on the island. The entrepreneur understood that the best way to fulfill this investment was with a mortgage in Mallorca to maintain liquidity, diversify his portfolio, and deduct the Wealth Tax in the Balearic Islands. Destiny made Juanita Casanas, at that time Director of a top Spanish bank in Mallorca, and Drew’s paths cross. Two years later, Drew Aaron and Juanita Casanas joined forces to co-found Lionsgate Capital, the first premium mortgage brokerage firm in the Balearic Islands and Spain, with a focus on assisting HNW and UHNW clients obtain the best financial solutions for their property purchase at any given time. As they say, the rest is history, even though in this interview, Drew Aaron tells us more about this story and his experience as an entrepreneur and investor in Mallorca.
Could you please begin by explaining the main reasons for moving with your family from New York to Mallorca and did you have any reference or inspiration at the time of making the decision?
My wife and I decided to move to Mallorca to raise our children here in the nature, away from the urban life and fast pace of NYC. We had discovered Mallorca years before and had fallen in love with the island and everything it had to offer. We were very impressed with the culture, diversity, schools, healthcare, security, gastronomy and overall nature and lifestyle that Mallorca has to offer. We had just had our first child, and with the rising gun violence in schools and the current state of affairs in the US, it was a defining time where we decided to make the decision to move to a safer and more stable place and found a special home in Mallorca to raise our children.
How easy was it to find a property in Mallorca for you and your family?
We didn’t really have any close contacts in Mallorca when we started our search. So, we used the internet and came across several interesting properties. One was a villa in Son Vida, which I was interested in, and one was a rustic finca in the mountains located in Alaró which my wife was interested in. In the end of course we went with my wife’s choice in Alaró but we were fortunate enough to get a good deal on the Son Vida property as well, so our family in the US purchased it as an investment and second home for when they are visiting from the States. When we purchased both homes, the market was tremendously less expensive than it is now and there was less competition for properties. We were able to get both homes at a great deal and we feel very fortunate about the timing.
What made you decide to purchase your family home in Spain with a mortgage and what would you say are the main benefits?
Our lawyers and accountants from the US, Madrid and Mallorca started mentioning the wealth tax on personal properties and assets in Spain and we looked further into this. There is no wealth tax in the US, so this was all new to us. We right away understood why everyone recommended financing when purchasing a home in Spain. The timing was excellent as rates were at a 50-year low, so we understood the great opportunity cost of freeing up cash for alternative investments in art, etc. that have a much higher return.
Could you please tell us your first impressions of dealing with Spanish banks?
When deciding to mortgage in Spain, I was under the assumption it would be a simple process as we had very good relationship with many top European banks that existed in Spain and had a strong presence in Mallorca. Unfortunately, I could not have been more wrong and was quite surprised when speaking directly to the top banks in the Balearics. I had a hard time finding a contact that I could connect with and really spoke the language, and in a lot of cases they were very slow to respond. Overall, it was a surprisingly difficult experience, until I met Juanita, who at the time was the Director of a Spanish bank, and whom several lawyers, real estate agents and accountants had recommended I contact. Juanita not only explained everything clearly and made a complex process seem easy, but she also managed to obtain the best offer for me in record time.
What was the initial motivation behind creating Lionsgate Capital and what would you say is the key to Lionsgate Capital’s service?
After meeting Juanita, together we discussed building a mortgage brokerage company that offered the widest range of mortgage solutions for high-net-worth international clients investing in properties in Spain. I am proud to say that Lionsgate Capital is now the largest luxury mortgage brokerage company in not only Mallorca and the Balearic Islands but now southern Spain. We are the number one contact for all the top banks in Spain and private banks in other European jurisdictions. The Lionsgate Capital Team we have in place are ex-bank experts that have a wealth of experience, specifically dealing with foreign clients that are investing in property in Spain. All the team members speak various languages and are incredibly efficient in securing the best option for each of our client’s needs.
What type of challenges did you face when Lionsgate Capital first started?
Doing business in Spain is much more difficult than America, doing business in Mallorca seems specifically more difficult than doing business in mainland Spain. Sir. Richard Branson recently said when opening his first hotel on the island “Son Bunyola” said “it took me one year to put a man on the moon and more than 20 years to open a hotel in Mallorca.” I don’t think a wiser entrepreneur than me could say it any better. Doing anything in Mallorca at least initially just seems very difficult.
Would you do anything different now than when you purchased your first property in Mallorca years ago?
Instead of reaching out to one bank, I would certainly contact Lionsgate Capital and deal with their mortgage experts.
What was your initial vision when moving here career wise and how much has it changed?
Initially I moved to be semi-retired after selling our primary business. I have always enjoyed creating new companies, and building a mortgage firm was challenging as it was in a new country which led to new difficulties I had not faced before. After getting Lionsgate Capital up and running with Juanita, I was approached by the owner of a popular gallery in Mallorca to purchase their gallery and take over their space, my initial reaction was not to do so as I was looking to slow down. After deciding to finally take the space, we launched Gallery RED in 2018. It was a very humbling experience as my background was that of a collector not of a gallerist, and this came with a tremendous learning curve. Many of the things I initially thought would work, did not. In retrospect if I would have done everything the opposite, the way you would do things in NYC we would have had a much quicker success. Right before COVID-19 started, the gallery began to really pick up momentum and form its identity. We saw a great opportunity for growth and used the two years of the pandemic to expand, taking on additional spaces and focusing on our long-term strategy. We now have 18 official Gallery RED spaces in Spain, 12 open to the public 6 by appointment only, and we’re just getting started!
What would you say to any young entrepreneur wanting to start a business and settle down in Mallorca?
The first thing I would say is “don’t do it!” Mallorca is an incredibly difficult place to do business with very high tax rates and a lot of red tape when it comes to administration. I would follow by saying the positives are that, because it is a difficult business climate the barriers to entry are quite large, so if you are successful in building a new business you might have less competition as long as you continue to up your game and improve your offering.
How has Mallorca evolved and changed since you moved in 2016 and how do you see the evolution of the island?
It is amazing to see how much Mallorca has evolved since we moved here in 2016, at the time the island was already flourishing with a strong real estate market especially when it came to the Germans, British and Swiss. We started to see many Scandinavians beginning to buy on the island which added a great mix to the already international flair from the local Mallorquins to people from mainland Spain and from all around the world.
With the continuing success each year of the real estate market, especially in the luxury sector, came more high-end restaurant, retail stores, and an overall evolution of the island. Each year the market questioned when the real estate bubble would crumble, but the market has continued to rise in value year after year. During COVID-19 everyone expected the market to finally weaken, and it did just the opposite. Many people around the world realised they could work from anywhere with a laptop or phone.
After this traumatizing time, many decided they wanted to live somewhere in nature. Mallorca’s success during COVID-19 ultimately led to doubling the value of real estate in the high-end luxury sector in many regions throughout the island and especially central Mallorca, where people could enjoy living amongst nature and knowing they would have a peaceful place to be in case there was another global pandemic.
The data that people could access via reading the news or researching on the internet proved Mallorca and the Balearic Islands to be one of the safest places in the world post COVID-19 due to the extremely limited number of cases and fatalities. Other things about Mallorca began to surface and it no longer became just a popular vacation destination with 320 days of guaranteed sunshine. The world began to focus on the incredible gastronomy, culture, beaches, caves, hiking, biking, mountain activities and more in conjunction with the incredible infrastructure with the top hospitals, local and national police, incredibly low crime rate as well as diversity of population and opportunities in the boating and yachting world amongst others.
How does 2024 look for the Lionsgate Capital Group of Companies?
We are just getting started! Lionsgate Capital has established itself as the leader in the industry and will continue to expand in the larger cities in mainland Spain including Marbella, Barcelona, Madrid and Valencia, all of which we are already active in. Gallery RED, which already curates the art for the private airports throughout Spain including Mallorca and Ibiza, will finish completing the VIP lounges in the public airport in Mallorca in 2024. In 2023 we had a solo show at La Belmont Residencia in Deia, the Saint Regis hotel art program, a solo show with Rubén Martín De Lucas in Madrid during the annual art week… and for 2024 many other things are soon to be announced. After hosting solo shows in NYC and Madrid, we are considering out next pop ups and a strategic plan for Rouge Mallorca, our high-end luxury boutique that exclusively carries the impossible to get items from Rolex, Hermès, Chanel, Louis Vuitton.
What is your favourite Sunday plan in Mallorca?
Weekends are always family time. My wife oversees our agenda, and always includes a fun hike or excursion further exploring the island with our kids or a quick weekend getaway.
DREW AARON’S MALLORCA TIPS
Favourite area to live on the island?
Certainly, the heart of the island for me is in places like Alaró, Santa Maria, Benissalem, and other charming villages in the central or “mid-west region”. Pollença holds a very special place in our hearts, and while Palma and the Southwest are wonderful, I believe the real hidden gem is the central east coast. It will have a significant growth in the next few decades.
Where do you like to unwind?
On my olive farm in Alaró.
What is your go-to café?
In Palma, Café RED, the best coffee in Palma. In Alaro, Café Can Fressa.
What is your favourite restaurant?
In the city of Palma, I really enjoy Arume at the Santa Catalina market, or a quick lunch at Rialto Living. Fera and Botànic at the Can Bordoy Hotel are my favourites in the old town. And when I’m in Portals, Yara is my new favourite go-to spot for us.
Interview by Juanita Casanas
Co-founder and President of Lionsgate Capital
Juanita’s goal at Lionsgate Capital is to create unparalleled solutions for the most demanding clients and create value through service, making Lionsgate Capital the major player for financing in the Balearic Islands and mainland Spain.
