RSID3 Rossi Residencial

Rossi Residencial S.A. – Under Judicial Reorganization is a Brazilian real estate developer and construction company, primarily focused on the development of residential and commercial real estate projects. The company is headquartered in the city of São Paulo, operates through its own operations and special purpose entities (SPEs), and has been registered as a publicly held company with the Brazilian Securities and Exchange Commission (CVM) since 1997. Its common shares are traded on B3 under the ticker RSID3 and have been listed on the special corporate governance segment Novo Mercado since January 2006. The company’s business trajectory is tied to the Rossi family, whose activities date back to 1913 in retail and, from 1961 onward, also in construction, culminating in the founding of the developer on November 13, 1980, with an initial focus on mid- and high-end residential properties in the São Paulo metropolitan area.

Throughout the 1980s and 1990s, Rossi Residencial consolidated its operations in real estate development and began to diversify its target audience. In 1992, it entered the middle-class segment with the development of the “Plano 100”, a proprietary long-term financing model created in a context of scarce mortgage credit, which expanded its ability to manage multiple projects and customer portfolios simultaneously. Starting in 1993, it began geographical expansion to other regions of the country, operating in cities such as Campinas, Rio de Janeiro, and Porto Alegre and creating specific regional offices. In the second half of the 1990s, the company developed projects aimed at the low-income segment, such as Vida Nova, and launched the “Villa Flora” line, based on planned communities with urban infrastructure, leisure areas, and services, deepening its presence across different income brackets and product formats.

Rossi Residencial’s capital structure gained relevance in the capital markets with its initial public offering in 1997 on the then BM&FBOVESPA, now B3, when Level 1 ADRs were also launched in the international market. The company was a pioneer in the securitization of real estate receivables, a practice that allowed the transformation of cash flows from property sales into tradable financial instruments, linking real estate development more directly to the financial market. In the 2000s, the group joined Level 1 of the stock exchange’s corporate governance segments, acquired América Properties to strengthen its presence in high-end residential and commercial properties, and later migrated to Novo Mercado, carrying out in 2006 a large primary and secondary share offering aimed at land acquisition, debt reduction, and working capital for new projects. In 2008, RSID3 shares were included in the Ibovespa index, reflecting greater liquidity and relevance in the Brazilian stock market.

The company’s business model is centered on real estate development and land subdivision, based on Law 4,591/64 and Law 6,766/79, covering the purchase and sale of completed properties, the subdivision and parcelling of land, the development of residential condominiums and commercial buildings, as well as their construction and sale. Rossi Residencial operates across the entire real estate development chain, from identifying and assessing land, market and economic-financial feasibility studies, obtaining urban planning permits and approvals, project development, hiring contractors or directly executing construction works, through to unit sales and customer service during and after delivery. Its corporate purpose also includes holding interests in other companies as a partner or shareholder, reflected in the structure of SPEs and consortia formed to make specific projects feasible.

In terms of its portfolio, Rossi Residencial operates in various segments of the real estate market, with specific product lines for different income and usage profiles. In the residential segment, the company organizes its activities into ranges such as the low-income segment, involving standardized, lower-value properties, and the conventional segment, with units that fit within the limits of the Housing Finance System (SFH) as well as higher-end properties. Within this scope, it developed product families such as Rossi Mais/Life, aimed at upwardly mobile consumers or those in the family-formation phase, with moderately sized apartments and condo-club projects; Rossi Atual, targeting urban families that value location and neighborhood infrastructure, including houses, apartments, and lots; and Rossi Ativa, consisting of large condominiums with extensive leisure, sports, and social areas. In the commercial segment, it has operated with the Rossi Office, Rossi Business, and Rossi Corporate lines, which range from horizontal complexes with modular offices for small businesses to corporate buildings with higher levels of sophistication, building automation, and more complex construction standards.

In addition to traditional development, the company has pursued initiatives in urban planning and land subdivision, with projects that seek a structure similar to planned neighborhoods, including basic infrastructure such as water, power, sewage, and paving, green areas, clubs, squares, and spaces for retail and services. The creation of Entreverdes Urbanismo in 2012 reinforced its focus on single-family and multi-family subdivisions, expanding its activities beyond residential and commercial buildings. In 2013, the operating structure was complemented by the creation of Rossi Gerenciadora, focused on providing specialized construction-related technical services, and Rossi Construtora, an in-house company focused on the construction of residential and commercial buildings, allowing greater control over project execution in both proprietary developments and partnerships and consortia.

Rossi Residencial’s geographical footprint has, over time, been characterized by a movement of nationwide expansion followed by a process of retrenchment and focus on regions considered strategic. The company set up regional offices in Campinas, the South, Rio de Janeiro, Brasília, the Northeast, and the West Zone of São Paulo, expanding its operations into several states and key urban markets. From the mid-2010s onward, it began to revise this expansion, closing some regional operations and divesting from joint ventures, such as partnerships with Capital in Manaus and Norcon in Aracaju, in addition to unwinding its corporate partnership with Grupo Diagonal in the Northeast region. These moves were associated with a broad operational and financial restructuring process, including debt renegotiations with major banks, asset sales, and, in 2022, the filing for judicial reorganization, whose plan was approved and judicially ratified in December 2023 for the Rossi Residencial S.A. economic group.

From a regulatory standpoint, Rossi Residencial’s activities are fully subject to the legal framework governing real estate development, urban land subdivision, housing credit, and land-use and zoning regulations at the municipal, state, and federal levels. Each new project depends on obtaining permits and authorizations from city governments, real estate registries, and environmental agencies, including project approvals, recording of incorporations, establishment of condominiums, and regularization of subdivisions. The company is subject to the requirements of the Real Estate Development Law, the Civil Code, and land subdivision legislation, and may opt, when applicable, for the “patrimônio de afetação” regime, which segregates the assets of specific projects to protect buyers and creditors. Its operations are also influenced by the country’s housing credit policy, particularly the rules of the Housing Finance System and the use of savings deposits and FGTS funds in financing residential units. In the environmental and social sphere, the company is subject to regulations applicable to the construction industry and states that it conducts ongoing risk analysis, although it did not publish its own environmental and social reports in the period described due to priorities related to reducing administrative costs.

Rossi Residencial’s revenue base is generated entirely in Brazil, with no significant presence in foreign markets, and arises in a diversified manner from the sale of units and lots to individuals and legal entities, without concentration in specific clients exceeding 10% of net revenue. Operating in a capital-intensive sector that depends on credit and macroeconomic conditions, the company structures its activities around individual real estate projects, each with its own product planning, target audience, funding source, and legal structure. RSID3 shares, traded on B3, represent an interest in a group that combines a history of geographic and portfolio expansion, exposure to the cycles of the Brazilian real estate market, and a recent financial restructuring process formalized through judicial reorganization, with direct impacts on its resource allocation strategy, launch pace, and debt profile.