Discover Puerto Rico Tourism video (2:45 s) highlights Puerto Rico’s unique selling proposition for tourism in 2022 and beyond. Interviews with Adam Greenfader of AG&T and Federico Stubbe of PRISA Group discuss the island’s rich culture, robust infrastructure, great airlift, and other benefits such as Federal tax incentives. Watch the video to learn how you can be part of Puerto Rico’s booming hospitality and tourism industry.
Puerto Rico means business. The island’s supportive ecosystem empowers entrepreneurs’ forward-looking vision with a spectrum of assets, including smart tax incentives, a highly skilled bilingual workforce, U.S. legal & financial frameworks, and an advanced network infrastructure.
The ULI Roundtable on Climate Resilience in The Netherlands was held to discuss how hurricane destruction in the Caribbean (and specifically Puerto Rico, Sint Maarten in 2017 and the Bahamas in 2019), reveals an urgency to rethink urban resilience and regeneration in the Caribbean. The ULI Roundtable brought together Dutch planners, designers, architects, engineers, financial institutions, developers, and investors to discuss new solutions and share global best practice. Specific issues focused on the Dutch knowledge and leadership on climate mitigation across urban design, development and investment. The two speakers included:
Mr. Adam Greenfader, Chair of the ULI SE Florida/Caribbean Council – shared experiences and outcome advice from the ULI Advisory Services Panelists in the Municipality of Toa Baja, Puerto Rico after the catastrophic and deadly 2017 Hurricane Maria.
Mr. Henk Ovink, Dutch special envoy to the United Nations on Water, and flood expert shared insights into global climate change challenges and the Dutch resilience plans for both the Netherlands and Dutch Caribbean.
San Juan- “The Future of Tourism and Hospitality: Increasing Capacity and Competing in a New Caribbean Market”, will be the main topic to be discussed by a panel of experts on the subject, each one representing a sector in the ever-changing world of tourism and hospitality.
The chairman of the board of the PRBA, Eng. Emilio Colón- Zavala, stated that: “Through this panel, the Puerto Rico Builders Association (PRBA) will provide the space for a wide and varied discussion, which will cover the new trends in the Modern Tourism industry, as well as the importance of efficiently positioning Puerto Rico as a competitive destination in the Caribbean. Tourism with less than 7% of the islands GDP, is slated to become one of the pillars of our economic development and it is urgent to incorporate into our offer all new trends that continue to develop and evolve in the Hospitality Industry”.
The panel moderated by Adam Greenfader, Managing Partner of AG&T, will have the participation of:
Carla Campos- Executive Director, Puerto Rico Tourism Company
Pablo Maturana- Managing Director Development South America & The Caribbean, Hilton International
Rachel DeLevis- Policy Associate, AirBnB
Federico Stubbe- President, PRISA Group
Federico Sánchez- President and CEO, Grupo Interlink
Eric Berman- Chief Investment Officer, Lifeafar
This panel will be held on October 30, as part of the Forty-Sixth Annual Convention of the Puerto Rico Builders Association: “A Challenge to Build the Future”, which will take place at the Puerto Rico Convention Center on October 29 and 30.
About the PRBA
The Puerto Rico Builders Association is a private, non-profit organization. Established in 1951, its main purpose is to represent leading developers and investors of housing, commercial, office, industrial and tourism projects. The Association also represents investors, suppliers, banks professionals and companies associated with development and construction in Puerto Rico. Its main objective is to promote and lead the planned, safe and sustainable development in order to serve as the island’s economic engine, in collaboration with Puerto Rico’s public and private sector.
Big shout out to many of you who flew in from across the country and Puerto Rico to attend our third Caribbean roundtable in Miami. It was evident from the discussions and presentations, that the Caribbean region continues to offer a wealth of opportunities as well as challenges. Our theme at yesterday’s roundtable was centered around ULI efforts in resiliency and rebuilding.
The panel discussion started with a report by Mr. Tom Roth of Grass River Property on Puerto Rico. Tom travelled the island last year as part of the ULI Advisory Service Panel thanks in part to the the support of The Kresge Foundation and our local District Council. The ULI Advisory Services Panelists spent a week in the Municipality of Toa Baja, Puerto Rico, to provide expert advice on enhancing recovery efforts after the catastrophic and deadly 2017 Hurricane Maria. Tom Roth’s presentation during our roundtable highlighted some of the lessons in dealing with rebuilding, seizing the opportunity to build on higher ground, and the availability of Federal funds for rebuilding homes for Puerto Rican familes.
While at this moment it is still very dangerous to access Abacos, Bahamas, Gene Budler of DCK presented some real time images of his recent relief trip to Abacos. The images of the destruction are truly unbelievable with tons of waste, destroyed homes, and obliterated life infrastructure. As the relief cycle continues, we will be tracking the situation. There is a clear need for stronger, better planned, and more resilient construction. It is our hope to be able to help the Bahamas with some solutions to the massive rebuilding efforts. If you are interested in helping there are multiple organizations. One such group recommended by Gene is MedStar out of Houston, Texas.
As part of our on-going effort to increase our engage with the Caribbean, we are planning a Caribbean study cruise in 2020. The idea of the cruise is to bring together some of the top minds in resiliency for an comprehensive educational summit. In addition to the seminars, we plan on visiting several islands that have been affected by the recent hurricanes. If you are interested in helping organize the study cruise please reach out to either Max or myself. As a reminder, this roundtable is open to non-members as guest to start but is a benefit for ULI members. To join please visit: https://americas.uli.org/membership/join/ If you have any questions, please call 1-800-321-5011 or contact Max Helden.
We are looking to plan a December networking event for this group and then will schedule the next content-oriented roundtable for 2020.
The Puerto Rico panel included Ing. Emilio Colón Zavala, President of the Puerto Rico Builders Association/ ECZ Group, Eric Berman, Chief Investment Officer at Lifeafar, Jorge Ruiz-Montilla, Capital Member and Chairman of the Real Estate & Finance Practice Group at MCconnell Valdes, Philip Carroll, Director of Finance at Royal Palm Companies and Adam Greenfader, Managing Partner of AG&T.
Ethan Penner, best known for creating the CMBS market, key noted the event with insight on “high conviction investment themes.” The Puerto Rico panel drew much interest at the Finance Summit. “We were impressed to hear from the leaders of the financial markets in New York that they see Puerto Rico as a great opportunity, explained Emilio Colón Zavala. With less than 7% tourism GDP, there is room for 15,000 more hotel keys.’
Philip Carroll of Royal Palm Companies , concurred with the assessment of hospitality demand and explained some of the island’s competitive advantages in Puerto Rico including the ability to leverage Tourism Tax credits with Opportunity Zone incentives. Royal Palm is currently developing a 1,000 key hotel and marina resort on the island.
Pictured Left to Right: Adam Greenfader, Emilio Colon Zavala, Philip Caroll, Marcial Diaz
The panel received multiple questions throughout the presentation. Of particular interest, was the level of detail and financial sophistication about Act 20/22. Jorge Ruiz-Montilla explained some of the benefits of the laws and highlighted the island’s economic and political stability.
When asked, “Why now, why invest in Puerto Rico today”, the consensus of the group was clear…the numbers speak for themselves. “Puerto Rico posted positive economic growth in 2019 and is forecasting a 2.5% GDP for 2020. We clearly hit bottom and with Billions of CDBG-DR money coming to the island in the next few years, the time is now”, quoted Adam Greenfader, who moderated the Panel.
Lifeafar, a real estate investment and hospitality firm, recently expanded their operations from Medellin, Colombia to Puerto Rico. “Puerto Rico is a place you can make a real change. Our investors want to make a good return on investment but also know they are helping to make a difference”, quoted Eric Berman.
Puerto Rico was already struggling from decades of fiscal mismanagement and had just declared bankruptcy over its $123B debt when it was hit by two hurricanes in September 2017 — only to run into a botched disaster response. The way some see it, though, rock bottom is behind Puerto Rico, and the island is in the early stages of an upswing. “Puerto Rico is setting an incredible pace for economic recovery,” said Brad Dean, CEO of Discover Puerto Rico, a destination marketing organization that promotes the commonwealth. “Airport arrivals are exceeding pre-Hurricane Maria levels, as are lodging revenues. Given the quick rebound, reinvestment in hotel product and tremendous potential for the island’s tourism industry, this is Puerto Rico’s time. From an investor’s perspective, there’s never been a better time to invest in the island’s tourism industry.”
Buildings and infrastructure are still being repaired and upgraded, and the government has instituted a full slate of tax incentives to lure investors, said AG&T Managing Partner Adam Greenfader, who advises clients from his base in Miami. “You can still acquire assets for 50 cents on the dollar,” he said. “Beachfront land in Puerto Rico today can still be acquired at $30K an acre.” Dean and Greenfader will be panelists at Bisnow’s Caribbean Hospitality & Tourism Summit Aug. 1. Puerto Rico’s economic spiral goes back decades. After World War II, it gave big tax breaks to manufacturers, and to cover for revenue shortfalls, issued more bonds than it could repay. In turn, it implemented austerity measures that did little except drive the population away. Its problems were exacerbated by that fact that it has no voting power in Congress.
Greenfader outlined some key developments toward a turnaround. Puerto Rico’s cash-strapped government has tried to lure investors with laws like Acts 20 and 22, passed in 2012 and designed so that people who move to the island pay little or no federal income tax, even on passive investments. Greenfader said this has attracted 250 to 500 families per year, including big names such as billionaire John Paulson. Other incentives include one that lets people with tourism-related projects get back 40% or 50% of their acquisition costs.
Puerto Rico’s massive government debt is currently being sorted out by a federal oversight board. “The major bonds, COFINA and GO, have been renegotiated and the bondholders have been put into payment plans,” Greenfader said. Since the 2017 hurricanes, federal disaster aid — including $1.4B authorized in June — has trickled in. Hotels damaged in the storms were forced to remodel or rebuild and are now offering better products at higher rates. Many are incorporating solar and microgrids to be resilient for the future. The storms raised the profile of Puerto Rico — one study found that prior to them hitting, about half of Americans hadn’t known the commonwealth was part of the U.S. Airport arrivals and tourism revenue have already set records this year. On top of this, Puerto Rico is the beneficiary of community development block grant funding, and 97% of the entire commonwealth — much of it beachfront — has been designated a qualified opportunity zone. “Puerto Rico never had a 1031 exchange, so from a tax perspective, it’s the first time it’s getting capital gains money,” Greenfader said.
Lifeafar Investments Chief Financial Officer Cole Shephard, who will also be a panelist at the Bisnow event, said his Colombia-based company is already taking advantage of Puerto Rico’s investment climate, raising $16M in an opportunity fund to reposition a 61-room hotel. Shephard said Lifeafar, which started by offering real estate services to expats in Medellín, was drawn by the tax incentives and that the opportunity zone designation was a bonus. He is now doing due diligence on additional properties. “I see the sophisticated money chasing metro San Juan,” he said, suggesting that there is a lot of opportunity for small to mid-market projects outside of the city. Not everything in Puerto Rico is rosy.
As the government has scrambled to generate revenue, sales tax was raised to 11.5%, pensions have been cut, college tuition increased and some 300 public schools closed. Critics have complained that wealthy investors have been protected while ordinary Puerto Ricans suffer. “The locals have had to carry the brunt of these austerity measures,” Greenfader acknowledged. “I’d understand completely, if I see a guy who’s a hedge fund manager with $500M earnings pay hardly any taxes, versus the regular guy paying 35% taxes who’s a salaried worker at Bacardi,” Shepherd said. But Shepherd added that conversations with Puerto Rican officials convinced him they have carefully calculated the tradeoff and found that luring private investment now will help island residents long-term, even though it may take years for the effects to be obvious.
Greenfader suggested that boosting tourism is a winning solution for both investors and residents. Because Puerto Rico since the Kennedy era has been focused on manufacturing, its tourism industry was relatively neglected. The industry now accounts for less than 7% of Puerto Rico’s gross domestic product. In other Caribbean islands, that number is typically between 30% and 80%. Dean’s destination marketing organization, Discover Puerto Rico, was established last year to actively promote tourism. Bisnow’s Aug. 1 Caribbean Hospitality & Tourism Summit will also include Puerto Rico Tourism Co. Executive Director Carla Campos, Hilton VP for Development Juan Corvinos Solans, Puerto Rico Builders Association President Ing. Emilio Colón Zavala and more.
On May 8th, the ULI CARIBBEAN ROUNDTABLE celebrated its second ROUNDTABLE meeting of the year. The turnout at Wework in Brickell City Centre was large and enthusiasm for the region palpable. Present at the event were industry leaders in finance, debt lending, construction, architecture, affordable housing, hotels and green building.
Big shout out to the Kresge Foundation (https://kresge.org) and all who participated in the Toa Baja Puerto Rico Resiliency Panel. The panel was but another example of the capacity of ULI to bring real solutions to real world problems.
Special thanks to our two speakers at the ULI CARIBBEAN ROUNDTABLE -Mr. Rogerio Basso, Head of Tourism at IDB Invest and Mr. Andrew Dicky – Executive VP JLL Hospitality. Financing projects in the Caribbean brings its own set of challenges and opportunities. It was great to look under the proverbial “hood” and examine how capital approaches Caribean hospitality lending.
Save the Date –On August 1, 2019, The Puerto Rico Builders Association will be hosting its 3rdAnnual Bisnow Caribbean Hospitality Investment Summit in Miami. If you are interested in Speaking/Sponsoring there are a few spots available please reach out to Jorge Montilla email@example.com more details.
San Juan, Puerto Rico
Adam Greenfader was recently named Chairman of the Florida Liaison Committee of the Puerto Rico Builders Association (PR Builders Association). For over sixty years, the PR Builders Association has been the island’s leading professional construction and development group. The PR Builders is responsible for government lobbying and networking. The Builders Association consists of high-level professionals in the residential, hospitality, industrial and commercial sectors.
“We are honored to have Adam Greenfader chair this new committee. Mr. Greenfader has been part of our organization for many years, is a tested professional in both markets and has a wealth of knowledge that will be a great asset,” exclaims Arch. Ricardo Álvarez-Díaz, president of the Builders of Puerto Rico.
The Mission of the Florida Liaison Committee is to be a bridge between Florida and Puerto Rico. The goal is to support builders, bankers, investors and other professionals. The committee aims to facilitate access to services, information, and key contacts. “Our goal is that the PR Builders Association is seen as a first and most important stop for anyone that wants to expand to either market,” says Adam Greenfader.
In the last couple of years, with the passing of laws 20 and 22, Puerto Rico has seen a significant increase of interest from companies and individuals from the US mainland. There are also great opportunities for Puerto Rican companies that want to export their services and products, and use Florida as a first stepping-stone.
The Florida Liaison team is in the process of developing key stakeholders relationships and organizing its events for 2016 in both Florida and Puerto Rico. If either you or your company is interested in participating, you may contact Mr. Adam Greenfader at firstname.lastname@example.org or call the Builders Association at 787.751.1471. Learn more about the Puerto Rico Builders association here.
San Juan, Puerto Rico
Por más de sesenta años, la Asociación de Constructores ha sido el principal grupo profesional de construcción y desarrollo. Esta organización ha sido responsable de promover el intercambio de información entre desarrolladores, inversionistas, miembros asociados y profesionales, en el desarrollo y la construcción de Puerto Rico. La Asociación de Constructores consiste en profesionales de alto nivel en el sector residencial, hotelero, industrial y comercial.
“Nos sentimos honrados de tener a Adam Greenfader dirigiendo este comité. El Sr. Greenfader ha sido parte de nuestra organización por muchos años, y es un profesional con gran conocimiento de ambos mercados”, indica el Arq. Ricardo Álvarez-Díaz, presidente de la Asociación de Constructores de Hogares.
La misión del Comité de Enlace de la Florida es la de ser un puente entre la Florida y Puerto Rico, apoyando y anudando lazos y relaciones entre constructores, banqueros, inversionistas y otros profesionales en ambos países. El objetivo del comité es facilitar el acceso a servicios, información y contactos claves. “Nuestra meta es que la Asociación de Constructores de Puerto Rico sea vista como el primer y más importante paso para la persona y/o empresa que desee expandir su negocio a cualquiera de estos mercados”, explica Adam Greenfader.
Durante los últimos años, Puerto Rico ha visto un aumento significativo en el interés de empresas e individuos del continente de los Estados Unidos con la implementación de las leyes 20 y 22. Existen además, grandes oportunidades para empresas puertorriqueñas que deseen exportar sus servicios y productos. Éstos ven a la Florida como un buen primer paso.
El equipo del Comité de Enlace de la Florida está en proceso de desarrollar relaciones profesionales y organizar sus eventos para el 2016 en Florida y Puerto Rico. De estar interesado en ser parte del comité, puede contactar al Sr. Greenfader por correo electrónico email@example.com o llamar a la Asociación de Constructores al 787.751.1471.