From Barcelona to Lima, He's Breathing New Life Into Empty Buildings

From Barcelona to Lima, He's Breathing New Life Into Empty Buildings

By Catherine Elton


Fernando Palazuelo, a Spanish restorer of historic architecture, is making cities’ pasts their future.

By Catherine Elton

Fernando Palazuelo was a key player in Barcelona’s now-famous revitalization in the 1980s, restoring 63 historic buildings in the city center before moving on to Palma de Mallorca. When he arrived there, it was little more than a beach destination. He restored 33 historic buildings there, helping convert Palma into a thriving, global city.  

Along the way, Palazuelo, 63, a former soldier in Spain’s foreign legion, grew very wealthy. He owned a plane, one of the best art collections in Spain, and lived in a restored 13th century, 20,000-square-foot Arab palace where original frescoes graced the walls.

Then the financial crisis hit. 

In 2008, with his company in bankruptcy and his wife and four children in a cheap Madrid rental, Palazuelo found himself living in a $3 per night hostel room with a shared bathroom, in the gritty and dilapidated historic center of Lima, Peru, where he says he arrived with little more than €800 in his pocket. He considered killing himself, but ultimately decided against it, deeming it in “very poor taste.”  

When the market crashes, modern skyscrapers empty out. But … the city that protects its history will maybe lose 10 percent of its tourists.

Fernando Palazuelo

The only other option was to salvage what the banks had not taken — options to buy several historic buildings in Lima that his company secured four years earlier. And so he set out to make a comeback for himself and the once-regal center of Lima.

Leveraging his leading-man good looks and aristocratic air, along with his proven track record in Spain, he says he was able to repair relationships with the property owners to whom he was supposed to have started paying his options by then, woo new investors and acquire more buildings without having any money himself.

Today, his company, Arte Express, owns 30 — and counting — historic landmark buildings in the center of Lima, 15 of which have been painstakingly restored and rented out as offices, most with retail on the first floor. Just this past December, he closed a $25 million deal for seven of these, one of which will be his first in a planned chain of hotels.  

“These once-dead buildings are now living spaces where people work, eat and carry out their lives,” says Luis Martín Bogdanovich, the general manager of Prolima, the municipality’s program to recuperate the historic center. The impact of Arte Express on the center of Lima “extends far beyond the restored physical structures to the whole dynamic of the city center itself,” he says.  


From left: The Sudamericana Building, a building built in the 1940s and restored by Arte Express stands on the Plaza San Martin in the center of Lima; Palazuelo in front of the Banco Internacional building, which dates to the 1920s and was restored by Arte Express; A close up of the details on the façade of the Sudamericana Building

Source Diego Valdivia

Once a viceroyalty of the Spanish empire, Lima went on to be a wealthy city and home to Peru’s elite families after independence. It is so chock-full of fabulous architecture that UNESCO has declared it a World Heritage Site. But in the mid-1900s, when Lima’s wealthy families decamped to modern districts south of the center, taking their businesses with them, the center and its buildings fell into disrepair.

When Palazuelo arrived in Lima and approached wealthy families about buying the properties they abandoned in the center, he says they thought he was crazy. It was the same reception Spanish architect Juan Redón recalls they got from Barcelona’s historic property owners when the two began working together there. “When he went to Palma he wasn’t building beach apartment buildings, which would have been a faster easier return for a real estate developer,” Redón says. “It’s obvious he is driven by more than money.”

Originally, it was Palazuelo’s interest in archeology, history and architecture that put him on the career path of restoring historic buildings. But as time went on, his love affair with the city, as a concept, became a major motivation. “Cities are living beings that move and change every day,” he says. “They are like women: There are no two alike.”

Fundamental to a city’s future, Palazuelo says, is the conservation of its past. It is not merely a quaint question of identity, he insists, but one of economic survival. He observed that after the financial crisis, the cities of Florence, Venice and Barcelona, which all protect their patrimony, were still buzzing with tourists. Hotels in Milan, on the other hand, were empty. “When the market crashes, modern skyscrapers empty out. But when the market crashes, the city that protects its history will maybe lose 10 percent of its tourists,” he says. “People are never going to give up traveling around the world.”

Redón says Palazuelo always needs a challenge; once one project is moving along nicely, he’s looking for the next one. In this case, the next move is already underway. He broke ground on his newest project in 2017: the total restoration of the massive Packard Plant in Detroit, converting it into a mixed office and commercial space.

Despite his professional comeback in Lima, Palazuelo did not emerge from his crisis unscathed. He lost his marriage and relationships with his four children after falling in love and starting a second family in Lima. His ex-wife is now suing him for rights to the Peruvian company, alleging he illegally diverted funds from the company in Spain to the one in Peru. (He denies this.) He was not invited to the recent marriage of his daughter to the future Duke of Alba.

Losing a relationship with his children, he says, has been devastating. But even this appears to have had a positive effect on Lima’s historic center. After years when Palazuelo was the only private sector actor systematically restoring Lima’s center, two of his estranged sons, who used to work with their father, have begun buying historic properties in the center through a company they founded, Scipion Real Estate. The younger Fernando Palazuelo says his company is more “dynamic” than Arte Express and is structured to grow more sustainably while continuing the remarkable revival in Lima’s center.

Read more: South America’s new feminist champions are Peruvian women.

Clarification: An earlier version of this story mischaracterized how the younger Fernando Palazuelo compared his company with his father’s.