Helping Puerto Rico since the 1950’s

Puerto Rico 1950's

70 years ago, when the Puerto Rico Builders Association was formed, the United States was on the brink of entering the World War II. December 7, 1941, would be considered a day that would “live in infamy”. Thousands of Puerto Ricans as American citizens fought in the War and would return home as victors to an island on the precipice of great economic growth.  Thanks in large part to Operation Bootstrap, o “Manos a La Obra”, the Puerto Rico Builder’s Association has played a vital role in shaping the island’s long term economic development. The Puerto Rico Builders Association (formerly known as the Homebuilders Association) was formed in a critical period of time when the island was undergoing a massive transformation from an agricultural society into a leading manufacturing hub.

Puerto Rico would see historic growth for more than three decades and the Puerto Rico Builders Association would play a leading role in shaping the island’s zoning regulations, environmental protections, financing, and building codes (often referred to as a Miami’s building code on steroids).  Puerto Rico benefited greatly from these concerted efforts by the Puerto Rico Builder Association with one of the highest homeownership rates in the Western world at 68%. Puerto Rico is also the second largest public housing jurisdiction in the United States second only to New York City.

In 2015, The Puerto Rico Builders Association, under the leadership of then PR Builders president, Ricardo Alvarez Diaz Villalon joined forces with the Urban Land Institute Southeast Florida/Caribbean District Council. ULI founded around the same time as the PR Builders Association, is one of the oldest and largest networks of real estate and land use experts in the world. ULI’s mission is to shape the future of the building industry and create thriving and sustainable communities around the globe. Shortly thereafter, Puerto Rico was devastated with two back-to-back category five hurricanes.

Hurricanes Irma and Maria destroyed most of the island’s electrical infrastructure and informal housing stock at a cost estimated over 100 billion dollars. ULI together with the Puerto Rico Builders Association created a task force to study the effects of the storms and how to build back better. Under then ULI president Greg West, the Puerto Rico Builders Association and ULI convened national panel of experts and created a specific action plan for the municipality of Toa  Baja.

The Puerto Rico Builders Association BoardThe Puerto Rico Builders Association and ULI have since held multiple meetings and conference throughout the years in both Puerto Rico and Miami to explore new areas of synergy and improvements to the island’s build environment. ULI’s current president, Scott McLaren was recently quoted, “we strongly value our long standing partnership with your organization and admire the leaders who go above and beyond, especially when faced with such tremendous obstacles.”

Come celebrate 70 with the Puerto Rico Builders Association Puerto Rico on October 27-29 in San Juan. https://constructorespr.com/convencion-2021/

AG&T is a real estate development and consulting company founded in 1998 with headquarters in Miami, Florida. Our  track record spans over 55 real estate development projects in Puerto Rico, Sint Maarten, Costa Rica, Panama, Mexico, Dominican Republic, and various other Caribbean islands.

 

 

State of the Caribbean Hospitality Market: Capital Markets, Lending, and the Road to Recovery

State of the Caribbean Hospitality Market: Capital Markets, Lending, and the Road to Recovery

On March 16, 2021, at a time when much of the global hospitality industry remained in crisis, the Urban Land Institute Caribbean Council convened one of its most comprehensive discussions on the future of Caribbean tourism and hotel investment.

The webinar, “State of the Caribbean Marketplace,” brought together an exceptional panel of leaders representing institutional lending, development finance, hotel brokerage, destination marketing, and investment to examine the unprecedented challenges facing the hospitality sector and, more importantly, how the industry could emerge stronger.

Moderated by Adam Greenfader, Managing Partner of AG&T and Chair of the ULI Caribbean Council, the discussion featured:

  • Juan Corvinas Solans, Managing Director, Head of International Hotel Finance

  • Rogerio Basso, Head of Tourism, IDB Invest

  • Alexandra Lalos, hospitality investment professional

  • Christian Charre, Senior Vice President, CBRE Hotels

  • Brad Dean, CEO, Discover Puerto Rico

Rather than focusing solely on the immediate effects of COVID-19, the panel explored the deeper structural changes taking place across the hospitality industry and capital markets. The discussion provided valuable insights into lender responsibilities, investor behavior, hotel valuations, operational resilience, and the future of Caribbean tourism.

A Crisis Unlike Any Other

One of the central themes of the conversation was why COVID-19 differed fundamentally from the Global Financial Crisis of 2008–2009.

While both crises placed tremendous pressure on the hospitality industry, their underlying causes—and therefore the appropriate responses—were entirely different.

The Global Financial Crisis originated within the financial system itself. Excessive leverage, declining real estate values, and failures in the banking sector led to a widespread credit contraction. Liquidity evaporated, financing became scarce, and many otherwise viable projects were unable to refinance their debt. Banks faced solvency concerns, and distressed asset sales became commonplace as lenders worked through troubled portfolios.

COVID-19 presented an entirely different challenge.

Hotels did not fail because of poor underwriting or excessive leverage. In many cases, they entered 2020 with healthy balance sheets, strong occupancies, and positive cash flow. Instead, the pandemic abruptly halted global travel through government-imposed restrictions and public health measures. Demand disappeared almost overnight, not because travelers had lost interest in tourism, but because they simply could not travel.

This distinction fundamentally changed the role of financial institutions.

The Responsibility of Lenders During Extraordinary Times

One of the most compelling discussions centered on the responsibilities of lenders during a crisis that was not caused by borrowers.

Panelists emphasized that traditional loan enforcement strategies would not serve either lenders or borrowers under these unprecedented circumstances.

Instead, many financial institutions adopted a collaborative approach that focused on preserving long-term asset value rather than maximizing short-term recoveries.

Throughout the Caribbean and internationally, lenders worked closely with hotel owners to provide temporary payment deferrals, covenant waivers, loan modifications, maturity extensions, and other restructuring solutions designed to bridge the industry through the temporary disruption.

This represented a significant evolution in lender philosophy.

Rather than forcing widespread foreclosures, financial institutions recognized that preserving high-quality hospitality assets would ultimately benefit borrowers, lenders, investors, employees, and local economies alike.

The discussion highlighted an important lesson from the Global Financial Crisis: unnecessary liquidations often destroy long-term value. In contrast, patience and partnership can preserve both businesses and communities during periods of extraordinary uncertainty.

Capital Never Left the Market

Another important takeaway was that while travel had stopped, investment capital had not.

Institutional investors, private equity firms, family offices, sovereign wealth funds, and hospitality-focused lenders continued to study the market throughout the pandemic.

Many viewed the crisis as a temporary interruption rather than a permanent impairment of Caribbean tourism.

The panel discussed how sophisticated investors were actively preparing for recovery by evaluating acquisition opportunities, recapitalizations, refinancing transactions, and development sites well before travel resumed.

This confidence reflected the industry’s belief that the Caribbean’s long-term fundamentals remained intact:

  • World-class tourism destinations

  • Limited beachfront supply

  • Strong luxury demand

  • Growing interest in wellness and experiential travel

  • Continued expansion by international hotel brands

  • Attractive long-term demographic trends

As history has shown, many of these investors were well positioned to participate in one of the strongest tourism recoveries in the world.

The Evolution of Hotel Finance

The conversation also explored how financing structures were evolving.

Lenders increasingly emphasized sponsor quality, operational expertise, liquidity, and business continuity planning alongside traditional underwriting metrics.

Hotel operators were expected to demonstrate greater flexibility in managing costs, staffing, technology adoption, and guest experience.

Developers likewise began integrating resilient design, sustainability, wellness amenities, and mixed-use programming into new projects, recognizing that these features would become increasingly important to both guests and capital providers.

The pandemic accelerated trends that were already reshaping hospitality finance.

A More Sophisticated Investment Environment

Rogerio Basso provided valuable insights into the role of development finance institutions in supporting tourism throughout Latin America and the Caribbean.

Unlike traditional commercial lenders, multilateral development banks often provide patient capital that can continue flowing during periods of market uncertainty. Their participation not only supplies financing but also reinforces investor confidence, promotes sustainable development, and encourages higher environmental and governance standards.

Christian Charre shared perspectives from the hotel transaction market, illustrating how valuation methodologies were adapting in response to temporary operating disruptions. Rather than relying solely on current cash flow, investors increasingly focused on normalized performance and long-term replacement value.

Brad Dean discussed the remarkable resilience of travel demand and emphasized that tourism remained one of the world’s most powerful economic engines. While the pandemic temporarily interrupted mobility, the human desire to travel, connect, and experience new destinations remained fundamentally unchanged.

Looking Back

Several years later, many of the observations shared during this discussion proved remarkably accurate.

The Caribbean experienced one of the fastest tourism recoveries globally. Hotel occupancies rebounded, average daily rates reached record levels in many destinations, institutional investment returned, branded residences flourished, and major international hotel companies accelerated expansion throughout the region.

Perhaps most importantly, the industry demonstrated that collaboration among lenders, investors, operators, governments, and development institutions could preserve long-term value even during periods of extraordinary disruption.

AG&T’s Commitment to Caribbean Thought Leadership

The State of the Caribbean Marketplace webinar reflected AG&T’s broader commitment to advancing meaningful conversations about the future of Caribbean real estate and hospitality.

Through its leadership within the Urban Land Institute Caribbean Council, collaborations with industry organizations, and partnerships with public and private sector leaders, AG&T has consistently created forums where investors, lenders, developers, hotel operators, policymakers, and academics can exchange ideas and shape the future of the region.

The conversation was never simply about surviving the pandemic.

It was about understanding how crises reshape industries, how responsible lending preserves markets, and how thoughtful leadership can position Caribbean hospitality not merely for recovery, but for long-term growth.

The lessons remain just as relevant today. Strong destinations are built not only through exceptional hotels and visionary developments, but through resilient financial systems, collaborative partnerships, and leaders willing to think beyond the next business cycle.

Could this be the year for Puerto Rico?

Adam Greenfader
 
 

Could this be the year for Puerto Rico?

 

It had been almost 12 months since my last visit to Puerto Rico. Thanks to the COVID lockdown expectations were low. The last time I visited, more than 2 years after hurricanes Irma and Maria, the devastation was still overwhelming.  Streets were lined with garbage, electrical lines in disrepair, and thousands of homes had roofs covered in blue tarps. This combined with more than ten years of economic recession made has made Puerto Rico extremely pessimistic. As I landed in Luis Munoz Marin Airport, I was thinking,  “Would the ensuing earthquakes and COVID pandemic ravage the economy even more…”

 

I travelled the entire island from coast to coast –  100 x 35 miles, in a two week period. I drove from San Juan to Aguadilla, Mayaguez, Ponce, Humacao, Fajardo, and Ocean Park.  The roads were in good condition, the street lights working, and many buildings newly painted.  Notwithstanding the COVID crisis, the economy was bustling.  Most palpable was the positive attitude and feeling of the people. I spoke with many colleagues and friends and was told that much of the hurricane insurance had circulated through the economy.  The 8-12 billion in Federal relief from CDBG-DR is expected by early 2021.  Homemade signs seeking construction workers can be seen throughout the island that read, “Se Solicita Carpinteros y Albanilles”.

While the tourists were clearly absent ‘en mass’, a handful of new boutique hotels, especially in San Juan, have been recently delivered between 2019-2020. Much of this new hotel activity is due in part to the Tourism Tax Incentive. The tax incentive provides up to 40% of the total project’s cost back to sponsors…incredibly, some of it can be used for funding as part of the initial capital stack.  While this is not common anywhere in the world, Puerto Rico’s is not a typical Caribbean destination. The total economic activity (GDP) in Puerto Rico is less than 7% for all tourism related activities.  This includes, hotels, trades, conventions, excursions, etc..   This is an astonishing low number for an island that is surrounded by warm water, beautiful beaches, and lush landscapes. Read more about why Puerto Rico is like this at: https://agandt.com/contact-why-puerto-rico-now/

These tax incentives combined with a team of dedicated individuals in the Destination Marketing Organization (DMO) –  Discover Puerto Rico and other Public Private Partnerships (Invest Puerto Rico) is helping to make Puerto Rico a thriving tourism destination. The island currently boats some of the top hotels in the Caribbean with ADR’s over $1,500 per night.  Much of this demand is generated by the Act 20/22 (now Act 60).  For the last five years, hundreds of high net worth US individuals have moved to Puerto Rico to take advantage of zero Federal capital gains.  Act 60 has resulted in over 500 families and hundreds of new business moving to Puerto Rico.  There seems to be no end in sight for these new Americans living in Puerto Rico.  

Dorado Beach

This week Puerto Rico also inaugurated for the first time in over 20 years, the same political party. The PNP or US Statehood party won the election with a mandate for political stability, reduced corruption, and closer ties with the United States. While the island’s economic crisis is far from over, the COVID pandemic has put Puerto Rico back in the spotlight for its manufacturing proficiency. The island of Puerto Rico is one of the world’s leading pharmaceutical destinations – producing more than the top 5 US States combined. As thousands of jobs come back to the USA-Puerto Rico, invariably many will end up where the cost of labor is 15% less expensive, and there is a 60 year culture of robust manufacturing.

 

So is this the year for Puerto Rico?  Strong yes if you are involved with affordable housing, luxury resorts, alternative energy and critical manufacturing.

While we at AG&T do not have the proverbial ‘crystal ball’ on the island’s long term economic growth, things feel like they are on the right track and we will have more clarity with the resolution to the island’s bond crisis, the electrical authority privatization (AEE), and the completion of the responsibilities of The Fiscal Oversight and Managemnt Board for Puerto Rico. 

Critical Manufacturing and Puerto Rico USA

Luis Fortuno and Congresswoman Jennifer Gonzalez

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The panelists :

 

 

 

The ULI Webinar has an incredible array of information crammed into 90 minutes and it gives a great snapshot for the many initiatives being introduced and planned to help the Puerto Rican economy and create more quality jobs. If I had to some it up in three words, Mo is back. Mo of course being momentum.

 Each of the speakers brought a different perspective. Congresswoman Gonzalez Colon noted her primary mission is the reconstruction of the Island and to shephard the many supporting bills recently introduced in the US Congress. Former Governor Luis Fortuno brought an informed Wash DC think tank perspective, Adam Greenfader is one of Puerto Rico´s most passionate advocates, Andy Carlson of JLL (Jones Lang LaSalle) brings experienced commercial  insights from the world´s second largest public brokerage firm, Dr Deusch stated his case for the reasons he brought his Swiss/German manufacturing business to Puerto Rico because of a need for precision and reliability, while Noel Zamot has a finger on the ethical pulse of developing new business in Puerto Rico.

The conversations were upbeat and positive. For instance, Congresswoman Colon made a presentation on MMEDS which was introduced last month to Congress under the bill H.R. 7527. This bill provides tax incentives and tax credits for companies creating manufacturing plants and jobs in economically distressed areas in the US and its territories. The criteria for distressed is even stricter than the recent Opportunity Zone legislation passed in late 2017. When the Congresswoman showed the MMEDS qualifying maps there were smaller areas in very non desirable locations in the US whereas Puerto Rico literally had a much larger proportional area in some desirable locations. And she stated very clearly that MMEDS is one of the very few legislative items that is drawing bi-partisan support from both sides of the aisle.

The entire panel then weighed in on the competitive advantages that Puerto Rico has when competing with the mainland U.S. including much lower labor costs by as much as 60% lower in some cases, an experienced manufacturing labor force going back 100 years, the University of Puerto Rico at Mayaguez which is a top 10% engineering school for the entire U.S. and which is very much geared to provide the engineering and chemistry talent to support Puerto Rico´s manufacturing base. That even today five of the top ten selling drugs internationally are produced in Puerto Rico and 12 of the top 20 pharmaceutical companies have plants in Puerto Rico. Luis Fortuno noted that Puerto Rico had more than $40 billion USD in pharmaceutical exports in 2019 but has the capacity to increase this substantially. The panel noted that some closed down plants are almost in turnkey conditions should manufacturers wish to return or expand capacity. It would not take much. Maybe a recession of the Jones Act, or at least an exemption for an extended period of time, might be the necessary catalyst. There are some interesting new developments on this front as was evidenced last week by Hawaii noting that 85% of their informed populace is all for rescinding the Jones Act as it costs that Island 1.2 billion USD in additional transportation and cost of goods fees.

Progress is being made on seeking some type of exemption under the taxing provisions of GILTI as it adds a 10%+ tax on profits for CFCs (controlled foreign corporations) which unfortunately applies to the US territories since the do not fall under the IRC (Internal Revenue Code). On May 1, 2020, Congresswoman Stacey E. Plasket, representing the US Virgin Islands, filed Bill HR 6648 – the Territorial Economic Recovery Act, that if becomes law, it will exclude our territories from much or all of the GILTI taxation, under certain provisions.

On April 3, 2020, Congresswoman Jennifer González, resident Commissioner for Puerto Rico, introduced Bill HR 6643, the Securing National Supply Chain Act of 2020, to provide various tax credits to Economically Distressed Zones, including a tax credit on the amount of wages paid by an employer to employees in such a zone. The proposal has some overlap with HR 7527 noted above.

President Trump’s Special Representative for Puerto Rico’s Disaster Recovery,  Rear Admiral Peter Brown, lead two delegations to Puerto Rico in August 2020, the last visit being last week. I am told the trip was very successful as a big priority was to visit and understand the many advantages of pharmaceutical manufacturing in Puerto Rico.  AG&T is committed to bringing our network top information and access to our industry’s leaders. 

 

Investing Through Uncertainty: Institutional Capital’s View of Caribbean Hospitality During COVID-19

Investing Through Uncertainty: Institutional Capital's View of Caribbean Hospitality During COVID-19

 

At the height of the COVID-19 pandemic, uncertainty gripped the global hospitality industry.

Hotels throughout the Caribbean stood nearly empty. International travel had come to an unprecedented halt. Lenders were reassessing risk, investment activity had slowed dramatically, and developers around the world were asking the same question:

What does the future of hospitality look like?

To help answer that question, AG&T and the Urban Land Institute (ULI) Caribbean Roundtable hosted a timely conversation with Nicholas Hecker, Executive Managing Director and Chief Investment Officer of Sculptor Real Estate, moderated by Adam Greenfader, Chairman of AG&T and former Chair of the ULI Caribbean Council.

The discussion provided a rare institutional perspective during one of the most uncertain periods the hospitality industry had ever experienced.

Looking Beyond the Crisis

While much of the industry focused on immediate operational challenges, the conversation explored a much broader question:

How do long-term institutional investors evaluate hospitality during periods of extreme uncertainty?

Nicholas Hecker shared insights into how sophisticated investment managers distinguish between short-term market disruption and long-term value creation. Rather than reacting solely to the immediate crisis, institutional investors continued to evaluate demographic trends, destination quality, replacement costs, barriers to entry, and the long-term fundamentals supporting hospitality investment.

The message was clear.

The pandemic represented an extraordinary disruption—but not the end of the hospitality industry.

Confidence in Caribbean Hospitality

The Caribbean entered the pandemic with some of the strongest tourism fundamentals in the world.

Exceptional natural assets, limited beachfront supply, growing global demand for experiential travel, and proximity to North American markets continued to make the region attractive from a long-term investment perspective.

The discussion emphasized that while transaction activity had slowed, high-quality destinations would likely recover first as travelers increasingly sought open-air environments, wellness experiences, and lower-density resort communities.

Many of those observations proved remarkably accurate.

In the years that followed, the Caribbean experienced record tourism recovery, rising average daily room rates, increased luxury development, and renewed institutional investment.

Institutional Capital Today

Since that conversation, Sculptor Real Estate has continued to expand one of the world’s leading alternative real estate investment platforms.

Today, the firm has raised approximately $14.5 billion in capital across opportunistic equity, credit, and long-term investment strategies, with investments representing more than $30 billion in enterprise value across hospitality, resorts, gaming, marinas, specialty real estate, infrastructure, and other alternative asset classes.

The firm’s continued focus on experiential real estate reflects growing institutional confidence in sectors closely aligned with the Caribbean’s long-term strengths.

AG&T’s Commitment to Industry Leadership

One of AG&T’s objectives throughout the pandemic was to ensure that Caribbean developers, investors, lenders, and hospitality professionals remained connected to the world’s leading thinkers.

Rather than allowing uncertainty to halt the conversation, AG&T organized a series of virtual discussions featuring executives from global investment firms, hotel brands, multilateral development banks, tourism organizations, lenders, and government agencies.

These conversations helped industry participants better understand how global capital was responding to unprecedented market conditions while providing valuable insights into the recovery that would eventually follow.

Looking Back

Viewed today, this discussion serves as an important historical snapshot. It captured institutional thinking at one of the most uncertain moments in modern hospitality history.

More importantly, it demonstrated that experienced investors were already looking beyond the immediate crisis and focusing on the long-term fundamentals that continue to drive Caribbean tourism today.

For AG&T, the conversation reinforced a principle that has guided our work for more than three decades:  Markets experience cycles. Hospitality evolves. Capital adapts.

But exceptional destinations supported by thoughtful planning, resilient infrastructure, and long-term vision continue to attract investment.

The Caribbean’s recovery over the past several years has validated that perspective—and positioned the region for a new generation of hospitality investment.

Caribbean Hospitality After COVID: Reimagining Travel for a New Era

Headshot of Brad Dean

Caribbean Hospitality After COVID: Reimagining Travel for a New Era

In the spring of 2020, the global hospitality industry came to an abrupt halt.

Borders closed. Airlines grounded their fleets. Cruise ships sat idle. Hotels that had welcomed guests for generations suddenly stood empty. For a region where tourism represents one of the largest contributors to GDP, employment, and foreign investment, the uncertainty was unlike anything the Caribbean had ever experienced.

While much of the industry focused on managing the immediate crisis, AG&T believed it was equally important to begin asking a different question:

What would Caribbean hospitality look like after COVID?

To help answer that question, AG&T partnered with the Urban Land Institute Caribbean Council to launch a series of thought leadership conversations featuring many of the region’s leading voices in tourism, finance, hospitality, manufacturing, and economic development.

One of the most memorable discussions featured Brad Dean, then CEO of Discover Puerto Rico, Puerto Rico’s Destination Marketing Organization.

Rather than focusing solely on the challenges of the pandemic, the conversation explored how the industry could emerge stronger, more resilient, and better prepared for the future.

Brad Dean offered a perspective that has become increasingly relevant in the years since.

“This downtime gives the travel industry our George Bailey moment. We have all seen that without travel it’s pretty ugly. There is far greater value to travel than most of us ever realized. Travel lifts spirits. It connects people. It leads to progress.”

Those words resonated deeply throughout the Caribbean.

Travel is more than hotel occupancy or airline arrivals. It supports small businesses, restaurants, taxi drivers, artisans, tour operators, construction workers, architects, engineers, farmers, entertainers, and countless entrepreneurs whose livelihoods depend upon a vibrant visitor economy.

The pandemic reminded us that hospitality is not simply an industry—it is an ecosystem.

Creating Dialogue During Uncertainty

Throughout the pandemic, AG&T recognized that one of the greatest needs facing the Caribbean was the exchange of ideas.

As uncertainty grew, we brought together leaders from government, international finance, hospitality, manufacturing, infrastructure, and development to discuss not only recovery, but the long-term future of the region.

These conversations explored topics including:

  • The future of Caribbean hospitality

  • Tourism recovery strategies

  • Public-private partnerships

  • Sustainable destination development

  • Capital markets and investment

  • Resilient infrastructure

  • Manufacturing and supply chains

  • Puerto Rico’s role within the U.S. economy

  • The evolution of luxury hospitality

The objective was never simply to host webinars.

It was to create a forum where industry leaders could share ideas, challenge conventional thinking, and help shape the future of Caribbean development.

From Recovery to Renaissance

Looking back, many of the themes discussed during those early conversations proved remarkably accurate.

The Caribbean has experienced one of the strongest tourism recoveries anywhere in the world. Puerto Rico has reached record visitation levels, international hospitality brands continue expanding throughout the region, luxury resort development has accelerated, and institutional investment has returned to Caribbean hospitality with renewed confidence.

Today’s hospitality industry is fundamentally different from the one that entered 2020.

Developers place greater emphasis on wellness, sustainability, outdoor experiences, resilient design, mixed-use destinations, branded residences, and authentic cultural experiences. Investors have also recognized that the Caribbean’s long-term fundamentals—including strong tourism demand, limited luxury inventory, and growing global interest in experiential travel—remain exceptionally compelling.

AG&T’s Commitment to Caribbean Thought Leadership

For AG&T, these conversations reflected our broader mission.

As a Caribbean real estate development and capital advisory firm, we believe that leadership means more than executing successful projects. It means creating opportunities for dialogue, sharing knowledge across markets, and connecting investors, developers, hospitality brands, government leaders, and financial institutions throughout the Caribbean and the mainland United States.

Whether through our work with the Urban Land Institute, partnerships with Bisnow, industry conferences, investor forums, or conversations with leaders such as Brad Dean, AG&T remains committed to advancing ideas that strengthen Caribbean hospitality and encourage long-term investment across the region.

The pandemic tested every assumption about travel.

It also reminded us why travel matters.

Because hospitality is ultimately about people—and the connections that bring communities, cultures, and economies together.

 

Manufacturing 2.0 with Manuel Laboy

Puerto Rico's Economic Transformation: A Conversation with Secretary Manuel Laboy

 Economic development is driven by leadership, vision, and the ability to anticipate where investment is heading.

 

In this exclusive interview, Manuel Laboy, then Secretary of the Puerto Rico Department of Economic Development and Commerce (DEDC), shares his vision for positioning Puerto Rico as one of the most competitive jurisdictions in the Americas for manufacturing, life sciences, logistics, and industrial investment.

Our discussion explores many of the initiatives that were reshaping Puerto Rico’s economy, including the expansion of pharmaceutical and medical device manufacturing, Opportunity Zones, public-private partnerships, tax incentives, infrastructure investment, and regulatory reforms designed to attract new private capital. Secretary Laboy also discusses the significance of new legislation affecting foreign cargo and why he viewed it as a potential game changer for the island’s long-term competitiveness.

For AG&T, interviews such as this are part of our ongoing commitment to understanding the policies, market dynamics, and public-sector initiatives that influence real estate and economic development throughout the Caribbean.

Our longstanding relationships with government leaders, institutional investors, developers, and financial institutions allow us to provide clients with perspectives that extend beyond individual transactions. By engaging directly with the people shaping economic policy, we help clients better understand the opportunities, challenges, and strategic direction of the markets in which they invest.

Whether advising on industrial development, mixed-use projects, hospitality, or large-scale investment opportunities, AG&T believes informed decisions begin with informed conversations.

Watch the interview with Secretary Manuel Laboy to gain insight into Puerto Rico’s economic development strategy and the policies that continue to influence investment across the island.

The Future of Caribbean Tourism: A Conversation That Helped Shape the Next Decade

The Future of Caribbean Tourism: A Conversation That Helped Shape the Next Decade

As part of the Puerto Rico Builders Association’s Annual Convention, AG&T Chairman Adam Greenfader moderated a distinguished panel of leaders from government, global hospitality, development, alternative accommodations, and investment to discuss the future of tourism in Puerto Rico and the Caribbean.

The conversation brought together Carla Campos (Puerto Rico Tourism Company), Pablo Maturana (Hilton), Rachel DeLevis (Airbnb), Federico Stubbe (PRISA Group), Federico Sánchez (Grupo Interlink), and Eric Berman (Lifeafar) to explore how Puerto Rico could strengthen its position as one of the Caribbean’s leading tourism and investment destinations. Topics included evolving traveler preferences, hotel development, branded hospitality, airlift, alternative accommodations, public-private collaboration, and the critical role tourism plays in driving long-term economic growth.

 

 

Looking Beyond Traditional Tourism

One of the central themes of the discussion was the recognition that tourism was becoming far more than a leisure industry.

Hospitality had evolved into one of Puerto Rico’s most important economic development strategies—supporting construction, infrastructure, transportation, retail, food and beverage, entertainment, healthcare, and entrepreneurship throughout the island.

The conversation emphasized that future competitiveness would depend upon creating differentiated experiences rather than simply increasing hotel inventory.

New Trends Reshaping Hospitality

The panel examined several emerging trends that have since transformed the industry.

Global hotel brands were expanding their presence throughout the Caribbean.

Alternative accommodation platforms such as Airbnb were changing how visitors experienced destinations.

Developers were increasingly focusing on mixed-use communities, branded residences, wellness, experiential travel, and lifestyle-driven hospitality.

The discussion also highlighted the growing importance of airlift, destination marketing, public-private collaboration, and investment in supporting infrastructure—all factors that continue to shape Puerto Rico’s tourism economy today.

Looking Back

In many respects, the themes discussed during this panel proved remarkably prescient.

Since then, Puerto Rico has experienced record tourism performance, expanded international air service, significant new hotel investment, the growth of luxury hospitality, and increased private-sector participation across the tourism ecosystem.

Hospitality has become one of the island’s principal economic drivers, supporting thousands of jobs while attracting billions of dollars in private investment.

AG&T’s Perspective

For more than three decades, AG&T has been committed to advancing conversations that shape the future of Caribbean hospitality.

Whether through the Puerto Rico Builders Association, the Urban Land Institute, CHICOS, Discover Puerto Rico, Bisnow, or numerous investment forums throughout the Caribbean, our objective has remained consistent: bringing together government leaders, developers, investors, hotel brands, financial institutions, and entrepreneurs to explore the ideas that will define the region’s next generation of growth.

Tourism is no longer simply about attracting visitors.

It is about creating resilient destinations, vibrant communities, sustainable economic development, and long-term investment opportunities.

Puerto Rico has demonstrated that when the public and private sectors work together, hospitality can become far more than an industry—it can become a catalyst for economic transformation.

As Puerto Rico continues to strengthen its position within the global tourism marketplace, the conversations that began years ago remain just as relevant today. The difference is that many of the ideas discussed have now become reality.

Caribbean Hospitality Summit Draws Record Numbers

The Caribbean’s Hospitality Renaissance:

 

For decades, the Caribbean has been recognized as one of the world’s premier tourism destinations. Today, it is emerging as one of the most compelling regions for hospitality investment, infrastructure development, and long-term capital deployment. At the center of that transformation is Puerto Rico—a market whose financial renaissance is helping redefine investment across the Caribbean.

At AG&T, we have had the privilege of participating in that evolution for more than three decades.

As a Caribbean real estate development and capital advisory firm, our mission extends well beyond individual transactions. We have worked to strengthen the economic ties between Puerto Rico, the U.S. mainland, and the broader Caribbean by bringing together developers, lenders, institutional investors, hospitality brands, family offices, government agencies, and industry leaders. We believe that successful hospitality markets are built on relationships, collaboration, and confidence in long-term investment.

This philosophy has guided AG&T’s partnerships with organizations such as the Puerto Rico Builders Association, the Urban Land Institute, Bisnow, hospitality conferences, investment forums, and numerous public and private initiatives designed to showcase the Caribbean as a world-class destination for investment as well as tourism.

One such milestone was the Puerto Rico Builders Association’s conference, where AG&T organized and moderated a discussion on the future of development finance featuring senior executives from FirstBank, the Economic Development Bank of Puerto Rico, and Acrecent Financial. While the conversation centered on financing new construction, it reflected something much larger: Puerto Rico’s financial sector was entering a new era, creating opportunities not only for the island, but for hospitality and real estate investment throughout the Caribbean.

Looking back today, that conversation marked the beginning of a broader transformation.

Puerto Rico has emerged from years of fiscal restructuring with renewed financial stability, strengthened institutions, and a growing ecosystem of capital providers. Traditional banks have returned to construction lending, private credit has expanded, institutional investors are increasingly active, and billions of dollars in federal investment have accelerated infrastructure modernization. Together, these developments have created one of the strongest investment environments the island has experienced in decades.

The implications extend far beyond Puerto Rico.

Hospitality has always been one of the Caribbean’s most important economic engines. Across the region, demand for luxury resorts, branded residences, mixed-use destinations, marinas, wellness communities, and experiential travel continues to grow. Meeting that demand requires sophisticated capital markets, experienced development partners, and trusted financial institutions.

Puerto Rico’s financial resurgence is helping create that foundation.

As capital markets mature and investor confidence grows, the island increasingly serves as a gateway for institutional investment into the Caribbean. International hotel brands, private equity firms, family offices, lenders, and developers are viewing the region with renewed optimism, supported by stronger financial structures and improved access to capital.

At AG&T, we have worked to help build those connections.

Through partnerships with organizations such as Bisnow, the Urban Land Institute, the Puerto Rico Builders Association, and numerous hospitality and investment organizations, we have organized conferences, investor forums, educational programs, and networking events that connect mainland U.S. capital with Caribbean opportunities. These initiatives are designed not simply to promote projects, but to foster meaningful dialogue between investors, public officials, hospitality leaders, financial institutions, and developers.

Our objective has remained remarkably consistent: position Puerto Rico and the Caribbean as globally competitive destinations for investment, innovation, and sustainable economic growth.

The Caribbean hospitality sector is entering a defining period. Record tourism, expanding airlift, increasing demand for luxury accommodations, resilient infrastructure, and growing interest from global investors are reshaping the region’s development landscape. At the same time, public-private partnerships, innovative financing structures, and collaborative leadership are creating opportunities that would have been difficult to imagine only a decade ago.

Economic transformation does not occur in isolation. It is the product of sustained collaboration among governments, financial institutions, developers, investors, and industry organizations that share a common vision.

Puerto Rico’s financial renaissance is strengthening not only the island’s economy, but also the future of Caribbean hospitality.

At AG&T, we are proud to continue serving as a bridge between Caribbean opportunity and global capital—helping build the relationships that will shape the region’s next generation of hospitality and real estate development.

Puerto Rico Ready for Development

Ponce Paradise

A Beachfront Acre For $30K In An OZ? Welcome To Puerto Rico

Published by Deidra Funcheon, Bisnow Miami

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.  

 

Development Land
80 Acres in Naguabo, Puerto Rico

 

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. 

Development Land
29 Acres in Isabella, Puerto Rico

 

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. 

Event Ended On: Thursday August 1 2019