If managing investments were easy, everyone would do it, routinely driving amazing profits to a portfolio’s bottom line. For new construction real estate investments, every estimated dot on the timeline from concept to completion would be met or exceeded. But, because it’s not easy to be a savvy investor, this scenario rarely happens and when it does, you worry there might be something you missed. We are supposed to suffer, right? Much like watching the American stock market bounce a 600-point loss with a 400-point gain, all within a couple of days!
Almost a year to the day, I announced ground had broken on the Arcadia tower in Costa del Este. I stood as the earth movers began to dig, snapped a couple of photos, felt a bit relieved, then got into my car and drove away. It’s always exciting when things begin to take shape.
Today, a year after breaking ground, the project looks just about like it did on the day I snapped a few photos. There are no earth moving machines and large cranes are not guiding pouring concrete. The Arcadia sign continues to herald the coming of the new 46-story tower, offering residents an enviable location overlooking Central Park in the red-hot international business market of Costa del Este. Arcadia is absolutely coming; it’s just been a slower-than-anticipated start and that is not necessarily a bad thing.
In July of 2019, Panama elected a new president and with that came new rules on how banks were to manage investments, letting bids for major infrastructure projects as well as a more fluid relationship with foreign governments, including China and Germany. The Arcadia project continues to work through new regulations and projections for return-on-investment, but with almost 40% of the units already sold, the pressure to get to completion is intense.
Adding to that intensity, is the fact Panama and specifically Costa del Este, continues to develop into a regional international business hub for much of Central and South America. Direct flights arrive at Tocumen International Airport with tail flags for Air Europa, Iberia, American, Lufthansa, Turkish, KLM and Air France, just to name a few. Last week, Estee Lauder, the beauty products company, signed a contract doubling their already impressive business rental space. More space equals more employees and they will all need a place to live. Today, there are more than 150 multinational companies located within Panama including Coca-Cola, Adidas, Dell, Procter & Gamble, FedEx, Heineken, Caterpillar, BMW, Pfizer, Nestle and Exxon.
Arcadia was designed for the young professional and expat executive, seeking open concept living in a smaller footprint with all the amenities of a hip and trendy hotel. A business center, 24-hour security, full kitchens and in-suite laundry facilities are all part of Arcadia’s studio, one- and two-bedroom units. The first residential tower in Costa del Este to be granted a license for short-term rentals, Arcadia continues to brim with promise as a high-yield investment.
When an investor puts “skin in the game” by purchasing property before it is a reality, there are absolute opportunities for higher-than-average profits. It also comes with the knowledge, things might, and probably will, change.
There are also very basic rules every investor must satisfy before cutting a check. Knowing your developer’s reputation and work ethic is king among all rules for purchasing developing property.
The developers of Arcadia are some of the most successful in Panama with a long history of not only changing the Panama City skyline, but offering good jobs and training for Panamanians, reinvesting in the communities where they build and are ranked at the very top for ethical business dealings. The many buildings developed by Empresas Bern, are exceptional in every way, including high standards of construction.
It is important to remember, they also have “skin in the game” and are highly driven to get Arcadia on-track and completed. Because of the time lag and the fact a majority of the units already sold are to be used for short- and long-term rentals (as opposed to a primary residence), Empresas Bern has announced they will be delivering the units fully furnished, with hotel doors and an on-site property management company making it easy for guests to check-in and out, along with providing concierge, housekeeping and maintenance services.
Arcadia continues to be one of the most sought-after and dynamic planned towers in Costa del Este. As a building, it is amenity-filled with on-site retail space, a gym, pool and cinema room. There is attractive developer financing and now the added benefit of high-end, hotel style furniture as part of the offer. I’m going to be haunting the Arcadia site, looking for the return of the earth movers and when it happens, I’ll rush to let everyone know! It’s been a bit of a bumpy start, but please hold on! Sometimes, the really high profit investment opportunities require more patience along with a great eye for the market!