Why the Caribbean Now?: Nine reasons capital Is still flowing to the Islands
By Adam Greenfader | Chairman, AG\&T
Over the past 90 days, I’ve had the opportunity to speak at several investor and developer conferences from ALIS CALA Miami to Uncorrelated in Los Angeles to San Juan. At each event—whether in sidebars or from the main stage—the same question kept surfacing:
“Is now the right time to for new hospitality developments across the Caribbean?”
With global market volatility—particularly the uncertainty surroundingU.S. tariffs and trade disputes—many investors are looking fornew regions that offer stability, resiliency, and outsized returns.In finance terms, they’re looking forALPHA—returns that exceed the benchmark, adjusted for risk. Here are nine key takeaways on why the Caribbean is attracting smart capital and development.
1. A Region Built on Resilience
The Caribbean has weathered climate shocks, political upheaval, and migration challenges for decades. But never wars or major political upheavals. This resiliency makes the region one of the few that continues to function during times of global stress.When disaster strikes, Caribbean nations don’t fold—they rebuild.
Example: After Hurricane Irma devastated Sint Maarten in 2017, the island quickly mobilized to rebuild its critical infrastructure, including Princess Juliana International Airport—one of the busiest in the region with over 1.5 million passengers projected for 2025. Within just a few years, Sint Maarten reemerged as a premier destination for luxury travel, super-yacht tourism, and cruise ships (2+ million). Hospitality projects likeVie L’Venare creating new five star luxury residences and hotels on island.
Vie L’Ven Sint Maarten’s New Five Star Resort and Residences at Indigo Bay
2. Nearshoring and Reshoring Make the Caribbean Strategic
With global supply chains under pressure, the U.S. and other nations are looking torepatriate or regionalize manufacturing and logistics.The Caribbean—particularlyU.S. territorieslike Puerto Rico and the U.S. Virgin Islands—is positioned to capture this demand.
Example: Puerto Rico has seen a surge inpharmaceutical and medical device manufacturersreturning to the island, driven byAct 60 tax incentivesand the security ofU.S. regulatory oversight. Major players such asAmgen,AbbVie,Medtronic,Pfizer, andJohnson & Johnsonhave all expanded or reaffirmed their presence on the island. Puerto Rico now manufacturesmore pharmaceuticals by dollar value than any U.S. state, making it a strategic hub for nearshoring critical supply chains in the life sciences sector.
Puerto Rico a Top U.S. Pharma Manufacturer
3. Uncorrelated Growth because of Geographic Independence
Unlike the mainland U.S. or Europe, the Caribbean’s economic cycles often move independently. ThisUNCORRELATEDfundamental can provide valuable diversification for portfolios seeking to hedge geographic or sector risk.
Example: During the 2008 global financial crisis, tourism in the Dominican Republic, Aruba, and Jamaica remained stable due to diversified feeder markets outside of North America.
Sandals Resorts Jamaica – Overwater Bungalows
4. Barriers to Entry = Higher Returns
The Caribbean’s complexity—multiple currencies, legal systems, and cultural norms—can scare off short-term investors. But for seasoned developers with patience and a long-term lens, these barriers create market inefficiencies that translate tosignificantly higher margins with similar risk profiles.
Example: ThePark Hyatt St. Kitts, developed under complex coastal and environmental zoning regulations, took nearly a decade from conception to completion. Opened in 2017, it became one of the Caribbean’s premier luxury destinations. In 2021, the hotel was sold to an international hospitality investor at a reported2.5x+ multiple, illustrating how patience and strategic planning in the Caribbean can yield strong returns despite regulatory complexity.
Park Hyatt St. Kitts Christophe Harbour
5. Tax Incentives Improve Returns & Reduce Risk
Many Caribbean jurisdictions offer aggressive tax credits, abatements, and development incentives designed to attract foreign investors and hospitality developers. These programs not only boost project IRRs but also reduce downside risk. Puerto Rico: UnderAct 60, tourism and hospitality projects can qualify forup to 90% exemptionson real estate income, dividends, and long-term capital gains. Developers can also access50% tax creditson eligible tourism-related investments.
Example: TheDistrito T-Mobile, a $175 million entertainment district in San Juan, utilized Act 60 benefits to attract both equity capital and anchor hospitality tenants like Aloft Hotel and Caribbean Cinemas.
DISTRITO T-Mobile in San Juan, Puerto Rico
U.S. Virgin Islands: Through theEconomic Development Commission (EDC), qualified tourism businesses receive90% corporate income tax exemptions,100% exemptions on gross receipts tax, andreduced customs duties.
Example: The luxuryRitz-Carlton St. Thomasrenovation benefited from EDC-backed incentives, helping to finance a post-hurricane rebuild and elevate the property to five-star status.
The Ritz-Carlton, St. Thomas, USVI
6. Citizenship by Investment (CBI) Programs Propel Buyer Demand
Islands like St. Kitts & Nevis, Dominica, and Antigua offer CBI programs that allow individuals to obtain citizenship through real estate investment. This opens up new demand pipelines from international investors looking to gain access to tax-advantaged or visa-free travel.
Example: TheSix Senses La Sagesseresort in Grenada is another standout project developed under the country’sCitizenship by Investment (CBI) Program. Positioned as an ultra-luxury eco-resort, the development attracted high-net-worth individuals fromEurope, Asia, and the Middle East, many of whom sought Grenadian citizenship for global mobility and access to the U.S. E-2 visa treaty benefits. The project leveraged CBI funds to finance key phases of development, creating local jobs and supporting sustainable tourism. It showcases how strategic use of CBI capital can accelerate project timelines while deepening international investor engagement
7. Next-Gen Capital Reshapes Caribbean Investment
Historically, the Caribbean has been under-capitalized, with limited access to institutional equity and bank lending. That’s changing in 2025.New sources of private debt, ESG funds, green bonds, and blockchain-backed capitalare beginning to flow into the region.
Example: Sygnus Capital Ltd., a leading Caribbean alternative asset manager, is raising the Caribbean Community Resilience Fund (CCRF) to invest in medium-sized firms and climate-resilient projects across the Caribbean basin. With a combined equity and debt fund target of US$100–$135 million, CCRF focuses on sectors critical to economic and climate resilience, including renewable energy, transportation, blue economy, ICT, financial services, agriculture, and sustainable housing. Backed by a US$10 million equity commitment from IDB Invest—half of which comes from the UK Sustainable Infrastructure Program—CCRF aims to strengthen regional climate adaptation and mitigation.
Farm to Table Investments
8. Reputational Risk Keeps Defaults Low
The Caribbean operates much like a tightly knit business ecosystem. In many countries across the region, the same groups of developers, banks, and public officials have worked together for decades.This interconnectedness fosters a culture of transparency, reputation-based accountability, and long-term relationships.Because reputational risk carries significant weight in such a small market, stakeholders are incentivized to act responsibly, deliver results, and avoid litigation or public failure. As a result, projects in the Caribbean often exhibithigher performance, more collaboration between public and private sectors, and better alignment of interests across the capital stack.
Example:A regional hotel lender recently shared that their Caribbean portfolio of hospitality loans—spanning six countries—had a non-performing loan (NPL) rate of just 3.2% over five years.In contrast, the lender’s comparable U.S.-based hospitality loans during the same period showed an average NPL rate of 4.0%. The lender attributed the Caribbean’s stronger loan performance to personal relationships with borrowers, repeated partnerships with experienced developers, and more consistent communication with local authorities, which helped resolve permitting and construction challenges quickly.
9. Impact Investing with Measurable Results
Unlike investments in mature markets—where ESG commitments can sometimes be reduced to compliance exercises or marketing narratives—impact investing in the Caribbean is deeply tangible and immediately visible. In this region, capital has a direct and measurable effect on people’s lives and the environment. A single investment can create hundreds of jobs, stimulate local supply chains, and provide access to essential services such as clean energy, affordable housing, and climate-resilient infrastructure. It can preserve coastal ecosystems, protect biodiversity, and support sustainable agriculture.
Example:April Industries Group, based in Puerto Rico, pioneered the island’s affordable housing sector. Recognizing that housing is only one piece of the equation, the company was the first in Puerto Rico to integrate social workers and psychologists directly into its residential projects.They also innovated with farm to table agriculture. This innovation has had a profound impact—offering residents access to mental health services, family counseling, crisis intervention, all within their own communities. Their model is now seen as a best practice for other developers and public-private partnerships across the Caribbean.
Final Thought: Capital Is Looking to the Caribbean
As developers and investors look to deploy capital amid rising volatility,the Caribbean offers a unique opportunity to generate ALPHA—both financially and socially. It’s a market whereresilience meets return, and whereimpact and profitabilityare not mutually exclusive.
Want to connect with the leading minds in Caribbean hospitality capital and development?
At AG&T, we specialize in connecting transformational real estate developments in the Caribbean and Latin America with forward-thinking capital from around the world. With over $1.5 billion in advisory experience across 55+ projects, our team brings deep regional expertise, institutional relationships, and a long-term vision for sustainable growth. We work closely with developers, family offices, private equity firms, and multilateral institutions to structure projects that generate alpha, achieve climate resilience, and deliver measurable impact. Whether it’s navigating complex entitlements, unlocking tax incentives, or sourcing alternative capital—AG&T is your strategic partner at every stage of the investment lifecycle.
If you’re looking to deploy capital in high-growth, resilient markets—or seeking the right funding mix for your next Caribbean venture—Direct Message Adam Greenfader here on Linkedin.
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Originally published on LinkedIn on May 29, 2025.
Adam Greenfader is Chairman of AG&T, a Caribbean real estate capital advisory firm with more than three decades of experience structuring and executing real estate development projects across the Caribbean and Latin America, with over two billion USD in aggregate value.