Despite a US$72 billion debt load and an economy that has shrunk 14% since 2006, billionaire investor John Paulson’s New York City investment firm, Paulson & Co., continues to bet on Puerto Rico with Tuesday’s announced US$260 million acquisition of a majority interest in the Condado Vanderbilt and La Concha Renaissance Hotel and Tower, and the accompanying Condado Vanderbilt condominium towers in San Juan, Puerto Rico.
The deal was made in partnership with local hotel owner-operator International Hospitality Enterprises (IHE) and the price includes the cost to complete construction of the Vanderbilt. The complex, located in the heart of the Condado district in San Juan and comprises 802 hotel rooms, was partially owned by the U.S. territory’s Government Development Bank.
“These two properties are at the epicenter of luxury in San Juan. When completed, the oceanfront, 5- star Vanderbilt will be the most luxurious hotel in San Juan and a global destination spot,” said Paulson, who In September also acquired a US$500 million majority stake in the St. Regis Bahia Beach Resort and the Bahia Beach Resort & Golf Club. “We believe the Puerto Rican economy is at the cusp of recovery and both these hotels will benefit from future growth in Puerto Rico.”
Alberto Baco Bague, the secretary of the Department of Economic Development and Commerce for Puerto Rico, has worked closely to facilitate Paulson & Co.’s investments in Puerto Rico, which are expected to total as much as US$2 billion by the end of 2015. “We look forward to working with Paulson to continue the successful development of these properties and the growth of downtown San Juan,” said Baco. “The announcement adds to the building momentum behind economic development efforts in Puerto Rico. Investors like John Paulson are increasingly looking to Puerto Rico for investment opportunities, attracted by a business-friendly economic climate, a talented workforce and a good quality of life. There is more good news to come.”
Upon completion, the Condado Vanderbilt will contain 319 hotel rooms, including 108 suites, three food and beverage outlets, a spa and fitness center, meeting space, two pool areas and 370 parking spaces.
In unrelated announcement, the Encanto Group said on Tuesday that it would invest US$200 million to develop a beach and marina community on Puerto Rico’s east coast. The firm acquired the Punta Candelero Beach Resort and the Marina at Palmas del Mar, about 45 minutes from San Juan.
The acquisition includes the Solarea Beach Resort luxury condominiums, The Yacht Club Marina and 24 additional acres of waterfront slated for future development.
“Adding high-end properties to Puerto Rico’s hotel mix is an important part of the government’s economic development strategy,” Baco added. “These investments are a major boost for the tourism sector.”