“I’m not even sure what the correct name is,” said a gentleman from Mexico who was interested in investing in property in Panama.
“I’ve heard it called a condotel, a hotel-condo, and now you just said condo hotel.”
Fortunately, the man was smiling when he asked the question so I smiled back. “I’m pretty sure I’ve used all of those names,” I said as I extended my hand, “but it looks like condo hotel is going to fit for now—at least in Panama. I think people need a little more of an explanation than condotel or contel,” I said, charmed by the handsome businessman.
“Basically it is an upscale residential building, which is legally a condominium, but operated as a hotel. Guests have all the high-end amenities of a hotel, but they are staying in a condo with a full kitchen and laundry. These units are offered for short- and long-term rentals through on-site property management and a front desk.”
Condo Hotels Have Been Around For Decades
“They’ve been around for decades,” I said, “but it was in 2000 when the concept really took off in the South Florida area, especially in Miami. Today they’re very popular around resorts in Orlando, Las Vegas, and Myrtle Beach. Now, Panama, Canada, and Dubai are leading the condo hotel trend.”
I went on to explain that “condo hotels in Orlando might come with a water park and convention facilities, where others in Las Vegas might have a casino and high-end dining. It depends on why people are coming to the area,” I explained.
“Why are they coming to Panama?” asked my client who had earlier told me his name was Santiago, but that I should call him Santi.
“There are several reasons,” I explained to Santi. “We have a real demand for these properties. One reason is over the last ten years, Panama City has emerged as the business capital for multinational companies doing business in Central and South America. Executives who come here for business, start by checking into the Westin. Many stay for months or even years, and eventually want a more normal lifestyle. A kitchen, a place to leave their toothbrush.” Santi shook his head in agreement.
“I certainly know how hotel living gets old pretty quickly,” he said still smiling. “I travel a lot.”
More Comfortable in the Condo
“After they have been coming here, they may be transferred full time and they are comfortable in the condo hotel. Often times the executive elects to take a long-term rental agreement initially and they skip the hotel completely.
Many buildings in Panama flaunt luxury amenities, but the condo-hotels tend to go the extra mile. Many have retail space and high-end restaurants located within the property. Of course, there’s also the pool areas, fitness centers, business centers, and meeting and entertainment areas.”
Santi smiled, but quickly added, “you said there were several reasons the condo hotels are in high demand here. What are some of the other markets attracted to these units.”
Medical Tourism
“To the left of Town Center,” I said, pointing to the upscale retail mall located just across the street, “the construction you see is for the new Johns Hopkins International affiliated hospital.
There will be a medical mall attached to the facility where individuals will come for cutting-edge treatment. Physicians and support staff will have offices, plus shared facilities such as imaging and pharmacy.
People have been coming to Panama to receive treatments for everything from knee replacements to gastric bypass for some time now. Companies have started sending their employees here because the care is rated so highly and the cost is dramatically less. This is actually the second Hopkins hospital in Panama.”
“Medical tourism,” mused Santi. “I guess people who come, travel with family and other support people who need a place to stay and they will want a kitchen.”
“Exactly,” I said. “The patient typically is discharged from the hospital after a few days or the procedure was performed on an out-patient basis,” I said. “They stay, on average a month and they really don’t want to stay in a hotel setting when they are recovering. Executives end up staying a year or even more.”
Only Sold To Investors
Santi began walking around the sales center looking at the various properties currently in development in Costa del Este. “How many of these condo hotels are here,” he questioned.
“There is Generation Tower, which is being sold only to investors and only in units of full floors. That will be right next to the Town Center and the medical mall. Arcadia is another new condo-hotel and it’s generated the most interest of any project here in Costa del Este, in part because of its great location on the park. There may be some staying in Arcadia who are here seeking medical procedures, but we think the audience will mostly be business professionals.”
“Initially condo hotels were marketed as a way to off-set the price of owning a vacation property with hotel amenities. So, people had a nice place to stay when they came to a community they enjoyed and all the other time they rented the place and off-set the cost of ownership,” I said.
“We are seeing a lot of people from the States interested in owning a property, but never using that property personally. They finance the unit with their 401(K) and manage to earn a much higher return on investment than they would traditionally. If you finance with 401(K) money, you can never stay there personally. It’s against the law,” I continued, realizing I was over-explaining as I saw his face say “I’m from Mexico”. I rapidly returned to the local condo hotel options.
Looking Forward To The JW Marriott
“We are really looking forward to that becoming a reality,” I said. “The JW will be located near Town Center and Generation Tower. The Westin Hotel, here in Costa del Este is so often booked, I have to really scramble for some of my clients,” I continued as I pointed out the green and blue glass structure which was the Westin. The area is highly sought, due in part because of it’s green space and wide boulevards.
“Costa del Este is a planned community so we have wide streets and underground wiring. Independent power grids and water systems. Green space is everywhere and valued. Families love the schools and there is so much to do. Traffic can be a problem during rush hour but generally people walk or ride bikes,” I continued my virtual tour as we stood in the sales office that was centrally located with glass windows that looked out and around Costa del Este.
Popular With Expats
“Parkside is currently functioning as a short- and long-term rental complex and is most popular with expat executives and their families. We have a few full-time owners, but generally those owners are companies such as Johnson & Johnson who rotate executives. They all like having the hotel amenities including someone who accepts packages and the dry cleaning.”
I knew my client was interested in Panama City, but I figured it couldn’t hurt to mention: “There’s also a popular beach development in Playa Gorgona, about an hour’s drive from the city. Plenty of expats purchase a unit and rent it out part-time. Or they live there full-time and purchase multiple units for renting, letting the rental income help with the mortgage.”
I Couldn’t Get a Room for Tomorrow
“You’ve given me a lot to think about,” he said slowly. “ I’ll need to see the financials. Do you have time tomorrow?” I nodded a yes. “I managed a room at the Westin for tonight, but they were booked the rest of the week.” As nice as The Westin is in Costa del Este, it’s a popular spot and it’s not always easy to get a room, particularly on short notice. “No problem,” I said quickly. “I’ll have a condo-hotel lined up for you tomorrow. How long are you in town?”
“Long enough to tour the properties and get a feel for why people would want to live here. It seems like a young part of town! It’s making me feel a little old!”
“It’s definitely hip and trendy, but you’ll fit right in. It’s cosmopolitan and it almost vibrates with excitement.”
