Río Grande, P.R. — The possibility that Puerto Rico could be selected as the location for a Trump-branded, five-star resort is not so far-fetched. However, it will depend on lining up the right conditions — starting with an improvement in the economy.
Eric Trump, executive vice president at The TrumpOrganization — who was in Puerto Rico Thursday as part of the Puerto Rico Open international golf tournament — said the company has already considered the possibility of opening a luxury hotel property on the island, adding to its expanding hotel portfolio.
“I’d love to and I’ve looked extensively into the San Juan and Condado areas, and it’s a logical fit for us, in time,” said the second son of real estate magnate Donald Trump. “We’re opening a new hotel in Panama later this year and in Toronto next year.”
Trump hotel projects in the works include: Trump Ocean Club International Hotel & Tower in Panama City, Panama; Trump at Cap Cana in the Dominican Republic; Trump International Hotel & Tower in Toronto, Canada; Trump Towers in Istanbul, Sisli; Trump SoHo in New York; and Trump International Hotel and Tower Waikiki Beach Walk.
“It’s definitely on the radar as we have the best partners in the world here. The government has been great and so has [developer] Empresas Díaz,” Trump said.
The local developer is the Trump Organization’s partner in the upscale $600 million Trump International Golf Course and Residences complex in Río Grande.
The residential component of that exclusive project, the Founder’s Residences, consists of 56 apartments valued at about $1 million each. So far, 10 apartments have sold, and there is a possibility that another 16 will be purchased in the near future, said Empresas Díaz Executive Arturo Díaz.
Eventually, the gated neighborhood will also boast 500 luxury homes.
Jorge L. Díaz, executive vice president of Empresas Díaz, said building a five-star hotel such as those built by the Trump Organization in Puerto Rico is a possibility that will depend on how the economy continues to perform.
“Five-star hotels require the economy to go back to its prior status where there was movement, because while the market that a five-star hotel requires is there, it has to be brought to Puerto Rico to ensure success,” said Díaz, noting that there is a plot of land available in the Condado sector that would be a perfect fit for a Trump property.
“The thing also is that this type of development requires a large investment and right now, the government of Puerto Rico has been involved in other projects, such as the six-star property that is coming up in Dorado, and is helping us develop the JW Marriott in Coco Beach,” Díaz said. “However, I think that’s what the future is about, working together to achieve the construction of more hotels in Puerto Rico, which are necessary.”
Economy affects, but hasn’t stalled sales
Despite the economic downturn that has knocked the wind out most economies — hitting Puerto Rico’s especially hard — the 27-year-old executive said the luxury market has been less affected and kept up its lifestyle.
“Anybody in the real estate industry, or any industry, who says the economy hasn’t affected them in some way would probably be foolish or not truthful,” said Trump. “We cater to the high-end market, which purchases luxury and second homes and those people in general are probably less affected by the economy as others.”
Puerto Rico he said, was less affected in comparison to certain markets such as Florida and Arizona, where real estate took a significant hit as a result of the mortgage crisis that drove millions into foreclosure and banks to shut the valve on lending.
“People will pay to live a lifestyle and that’s been proven time and time again and that’s why I think our projects are so successful,” said Trump, noting that at present, the company has successfully sold a number of properties at “record prices,” in markets such as New York.
“There is still that 1 percent of the population that proves that the [real estate] segment is still healthy and doing very well,” he said.
The Río Grande property, he said, has done well because financing is still readily available through local banks that are willing to lend 100 percent of the price of the property. That — coupled with government incentives for which would-be buyers are eligible — has also contributed to sales achieved so far.
“Puerto Rico is one of the easiest places to find financing right now,” he noted. “Real estate really needs to be looked at zip code by zip code.”
Dominican Republic: Different market for different tastes When it comes to the Caribbean, Trump noted that each market is different and caters to different targets. While Puerto Rico draws stateside travelers wanting the security of staying within the U.S. and not needing a passport to travel, the Dominican Republic offers a sense of the exotic.
“Puerto Rico has the advantage that, as part of the U.S., it offers stateside travelers the security of staying within the jurisdiction, which is especially important in a post-9/11 world,” he said. “In Puerto Rico you have amazing culture, amazing food and phenomenal beaches.”
The Dominican Republic, he said, is interesting for many of the same reasons. However, Trump added the neighboring island nation offers value to those people who want to travel outside the United States, and possibly go to a country where they can buy a property.
“Four years ago, in 2006-2007, people looking to buy a property in places such as Miami were getting priced out of the market,” he said. “But, if you spend an extra hour on a plane — if you’re coming from the east coast or the south — you can have three times the assets, with cooks and maids and live a much better lifestyle.”
The first phase of the Cap Cana project has already been completed and represented Trump’s “largest sellout in history, with $368 million in real estate sold in four hours,” the young executive said. “It is an amazing project.”