Panama Is Finally Having Its “Moment”. That Could Change Latin American Real Estate And Hospitality Forever

Real Estate

It’s high tide at 5:00 am and in the steely twilight the Caracoles Islands are fully submerged six feet underwater.

By sunrise two hours later, they slowly begin emerging into narrow 40’ wide stripes of bright white sand in the middle of a cerulean blue Pacific Ocean and stay that way for two hours—before just as quickly being engulfed back underwater again.

“It’s been this way for thousands of years,” our boat captain intones in Spanish, idling in reverse to slip us off the stern for breakfast on the beach.

“One hour it’s ocean. The next it’s land. This place has always wanted to be both.”

Ask any Panamanian and they’ll likely agree that’s a pretty apt description of this sub-tropical Central American country barely the size of South Carolina and just 110 miles at its widest point. Panama’s highest peak is an 11,000’+ rumbling, active volcano. It’s also the only place on earth where you can see both the Atlantic and Pacific Oceans at the same time.

Ask anyone outside of the country what they think of “Panama”, however, and you’re likely to get an entirely different set of descriptors, like “tax haven”, the “canal”, or “Noriega” (the former military dictator who ruled the country during the 1980s and died in 2017).

Every country in the world suffers from an identity crisis. What nations “think” of themselves is frequently at odds with how they’re perceived from the outside in. In this regard, few countries are more mis-construed—or more perfectly poised for a 2.0 re-invention—than Panama.

Panama’s tides on the Pacific side rise and fall on average between 22’ – 24’ daily, which puts them on par with some of the widest swings in the world. One moment, the waves are pushing shells up on the beach. Six hours later, they’re breaking a quarter mile offshore.

That means even the toniest waterfront mansions on Contadora Island—a 340-acre vortex of the country’s richest and most powerful in the Pearl Islands archipelago—don’t have docks or boat lifts, because no one wants to risk scratching their multi-million dollar yachts.

So, most of Contadora’s hundred or so elite families with homes here fly in on their private helicopters or planes instead, even though the island is only 50 miles southeast of Panama City. At the end of the runway, their property managers typically line up in golf carts every Friday afternoon to pick them up and whisk them off to their compounds along with their nannies and chefs.

For the rest of the weekend, they swim, sail, sunbathe, fish, and host cocktail and dinner parties for one another surrounded by old growth jungle and humpback whales as the patriarchs and matriarchs of Panama stay glued to their phones and keep the country running.

If you could somehow fuse Aspen, Palm Beach, and the Hamptons together and stamp it with a Panamanian passport, Isla Contadora is what you’d get when it comes to a Latin American who’s who.

Outside of Panama, however, few people even know this place exists.

Esconced within this rarified sub-tropical paradise you’ll also find an unexpectedly understated place called 4 Elements.

Styled after a traditional Balinese compound designed by Eduardo Quintero of Forzacreativa, 4 Elements is Contadora’s newest boutique hotel property and, since the collapse of the legendary 300-room Hotel Contadora in 2009, the only one on the island that offers a modern, refined hospitality experience.

Based on the concept of Balinese “barefoot luxury”, 4 Elements is carved into a steep half-acre slope of jungle descending into the Pacific Ocean on Contadora’s southwesternmost tip with 500’ of private beach. But, due to the way it’s massaged into the landscape, 4 Elements feels ten times its actual size and a world away from its closest, multi-million dollar neighbors.

It’s four two-story villas which can accommodate up to 26 guests are oriented around a central pool reefed with meditation gardens, traditional Balinese sculptures, and water features that are entirely sourced and pre-fabricated from Bali down to the tile, furnishings, art, and thatch roofing.

As soon as you walk through the front gate, it’s clear that the intention of this place is to transport you half a world away spiritually and experientially—yet still anchor you geographically in one of Latin America’s greatest places.

For a purist who believes that hospitality must borrow from the land and culture from which it springs, the entire premise of 4 Elements at first could seem out of place. Yet, it actually makes perfect sense both geographically and contextually.

“If you put a pin through the globe at Contadora it would come out on the other side right through Bali,” Richard Kiibler tells me, who’s co-founder of 4 Elements Contadora and President of Six Diamond Resorts International (SDRI) and built the hotel with three Panamanian partners, Emanuel Lyons, Raul Ferrer, and Horacio Valdes.

“Contadora is roughly 8.5 degrees north of the equator and Bali is the same distance south of the equator as well as exactly half-way around the world. So climactically and tropically they’re very similar. The biggest difference is that depending what part of the U.S. you’re flying from the trip to Bali takes over 24 hours with layovers. Panamá is 3 to 6 hours from anywhere in the U.S. So, we knew that if we could offer an authentic, high-end Balinese hospitality experience with the same design, architecture, and service along with Contadora’s beaches, diving, fishing, and exclusivity 25 minutes from Panama City, we’d be building something that you couldn’t find anywhere else in the world.”

At first glance, Kiibler doesn’t come across as your prototypical real estate developer or hospitality entrepreneur—especially in a country like Panama which is better known for slick suits, coiffed hair, and wing tipped shoes when it comes to property moguls, movers, and shakers.

6’ 4”, unfrequently shaven, and usually uniformed in a black t-shirt, jeans, and cowboy boots, he looks more like what you’d get if you cross-bred an Austin tech CEO with an NFL Pro Bowl linebacker.

Yet, it’s precisely Kiibler’s Texas bravado and no-bullshit entrepreneurialism that’s navigated him and his company SDRI into the center of Panama’s about-to-explode global real estate and hospitality market.

That track hasn’t been an easy or overnight one. Playing big ball, game-changing real estate in Panama is hard enough for a well-connected Panamanian. For outsiders like Kiibler it’s more like pushing lava uphill.

For decades, Panama City’s skyline, along with almost every resort or hotel outside of the country’s capitol that’s been built, has been ruled by a small cabal of local families with the political power and financial levers to dictate what gets developed, where, and when—and more importantly what doesn’t. The banks and law firms with whom they’re closely aligned generally follow suit.

As a result, no matter how much Marriott money or Trump exceptionalism you come blowing into town with, if you don’t or can’t play by the rules you’ll inevitably be on the outside looking in.

So, when Kiibler first swaggered his way into town back in 2006 after scouring every other Latin American country from Costa Rica to Chile for the best no-ones-ever-heard-of places to invest, he wasn’t exactly rolled out the red carpet from Panama’s inner real estate circle.

Yet, what Kiibler recognized almost instantly was that Panama would eventually have its “moment”—and more importantly that that tipping point would be worth digging in his boots for, even if it meant the next decade or two would be a Warren Buffet-style waiting game.

So, the slow game is exactly what Kiibler played—meticulously snatching up and cobbling together some of the country’s cherriest oceanfront and private island properties one by one, fighting title disputes, and establishing rights of possession—until he’d built a not-so-small real estate empire that the country’s inner circle couldn’t ignore anymore.

“I first came to Panamá back in 2006 with a small group of investors looking to invest in beachfront properties,” Kiibler recalls of his first early years here. “And after making half dozen trips exploring all over the country, I fell in love with everything Panama had to offer. Costa Rica was already over-priced and over-developed. Land ownership in countries like Nicaragua was complicated and less secure. Mexico has great beaches on both the Caribbean and Pacific sides. But it’s hard to get anything done there because it’s so big and unwieldly. So, Panama was the best of all worlds. Some of the world’s best beaches. A stable currency and democracy. First-world infrastructure. And right at the center between North and South America.”

Fast forward sixteen years and Kiibler’s bet on Panama’s “moment” finally seems to be paying off.

To truly understand 4 Elements and Kiibler’s bigger vision for Panama, however, you first need to understand Isla Contadora. And to understand Contadora, you have to understand the “Pearls”.

Panama’s Pearl Island archipelago consists of roughly 200 islands running north to south down the Gulf of Panama southwest of Panama City on the Pacific side of the country.

The Spanish conquistadors were the first to arrive here in the early 16th century, led by Vasco Nunez de Balboa who learned about the islands from the natives on the mainland, and more importantly, heard about the pearls.

So, as pirates like Henry Morgan and conquistadors are wont to do, Balboa and several other Spanish explorers sacked the place, eventually settling Contadora—which translates in Spanish to the “counting house”—where all of the pearls they goaded from the locals were measured and tallied before shipping them back to Spain. (Two pearls from the Pearl Islands are now infamous, including the Peregrine Pearl which was owned by Elizabeth Taylor and the Star of London which is in Queen Elizabeth’s crown)

After the pearls ran out, Contadora became a Johnny Depp, Pirates of The Caribbean-style hide-out for another few centuries from which buccaneers could hole up, pillage, and plunder before they took off back home around Cape Horn to Europe, further contributing to the island’s theatrical mystique.

Then in the 1960s, after another century of remaining sparsely inhabited, a politically connected Panamanian man named Gabriel Lewis Galindo was introduced to Contadora on a fishing trip that would change everything.

Within a few months of his first visit, Lewis decided to buy the island in its entirety and eventually installed all of the original infrastructure to make it habitable, including building all of the roads, an airport, and the water and electricity systems that are still in place today. He also built a sprawling compound on the island’s south side with more than a mile of waterfront that his grandchildren still own.

Soon afterwards, as word of Contadora started to leak out, Lewis began parceling the island into lots to sell to his friends who were also politically connected, who in turn built their own mansions here who told their friends, and so forth.

Today, Contadora and its thirteen pristine beaches, idyllic climate, and rugged, rolling mix of jungle, cliffs, and teal and turquoise waters remains the playground of Panama’s elite just as it was founded by Lewis 60 years ago.

Circumnavigating the island in a golf cart takes around 25 minutes, alternately swerving between brand new Hollywood Hills styled multi-million dollar mansions and the more modest homes that were originally built back in the 1970s and 80s.

“This is the house where Jimmy Carter and (Panamanian Chief of Government) Torrijos signed the Panama Canal Treaty back in 1977,” Adriene Reeve tells me, slowing our golf cart down and waving to the right as she’s giving me a tour of the island. Reeve is 4 Elements’ General Manager, a former professional fisherman from Fort Lauderdale, and widely considered to be Contadora’s de facto “mayor” having lived here for more than 30 years.

A little farther up the road she waves right again. “That’s where the Panama Papers lawyer lived . . . The owners of Copa Airlines (Panama’s national airline) live here . . . And that was the Shah’s house,” she continues, pointing to the compound where King Mohammad Reza Pahlavi of Iran briefly lived in exile after the 1979 Iranian revolution. Other famous residents of Contadora have included Prince Albert of Monaco, Filipe Gonzalez, Christian Dior, a former president of Spain, and several other Panamanian ex-presidents.

“We had a lot of interesting neighbors here over the years,” says Reeve. Wink.

Of all Contadora’s landmarks, however, none is more steeped in infamy and history than the Hotel Contadora, which for more than four decades was arguably one of the world’s most famous hotels.

In its heyday Hotel Contadora was basically Beverly Hills Hotel South, hosting A-listers like Julio Iglesias, Patti Hearst, Jimmy Buffet, and John F. Kennedy Jr., as well as John Wayne, Joe DiMaggio, and Ernest Hemingway who came for the deep-sea fishing.

Two seasons of the hit TV show “Survivor” as well as multiple seasons of “The Raft” have also been filmed around Contadora and in the Pearl Islands.

Since the Hotel Contadora closed more than a decade ago and fell into disrepair (it’s since last year been rumored to be getting breathed new life as a luxury hotel by a major Panamanian development group), Contadora has remained secluded and kept itself under the radar, even as more and more millionaire and billionaire Latin American families have discovered the island and quietly erected the next sprawling waterfront compound.

Which is precisely what Kiibler and his partners saw in Contadora when they first began building 4 Elements back in 2018.

“When I first came here 10 years ago to go fishing, the first thing I thought was that this place is so much like St. Barths,” says Kiibler. “Others have compared it to Panamá’s Hamptons or Fisher Island in Miami. The roads were in incredible shape, the infrastructure was first class, and everything was well-manicured. And then when I learned about this history of the place, it was hard to believe that there wasn’t a great place to stay—and that’s when we realized that it would be the perfect place to launch something here one day. After the Hotel Contadora closed there was basically no other high-end hotel on the island.”

While Kiibler and his partners were master planning what would eventually evolve into 4 Elements, however, they quickly discovered one of the reasons for that.

Building anything high design and upscale on an island like Contadora isn’t easy. Designer materials are hard to come by, complicated systems like radiant floor heating are difficult to source, and skilled labor to install design elements that make a luxury hotel a luxury hotel like mosaic tile flooring and finely finished woodwork can take years.

To replicate an authentic Balinese compound with all of the specific architectural details that would entail would be even more difficult.

So, Kiibler and his partners decided to do something in Panama that no one had done before: pre-fabricate.

“There were a few different reasons we chose to pre-fabricate 4 Elements,” recalls Kiibler. “First and foremost, after having built on islands outside of Panamá City already we’d learned that labor is everything. If project managers and the people on the job aren’t experienced, installing high level finishes is almost impossible. So, it became clear early on that if we wanted to deliver an exquisite product, we needed to be more innovative and change the way we build entirely.”

That search ultimately led the group back to their pin prick in Bali exactly halfway around the world from Contadora where they discovered a small factory called Natural House Bali.

“NHB (Natural House Bali) had specialized for years in high-end, prefab solutions for resorts in that part of the world where building on tiny islands in the middle of nowhere was common, places like the Maldive Islands,” Kiibler explains. “They convinced us that we could control not only the quality of design in a factory, but also the time of construction. There would also be almost no waste and we were able to assure that all of our materials and timber came from government certified renewable sources which for us was equally important. Part of 4 Elements brand mantra is that we will always deliver the highest quality product while treading as lightly as possible on the planet. So many projects green wash their image as environmental stewards. But we truly take that commitment to heart.”

The end result of the group’s decision to pre-fabricate was being able to build 4 Elements in less than 2 years even during the early days of the pandemic when Panama was almost entirely shut down.

Kiibler and his partners also knew that in addition to 4 Elements’ architecture and interior design, they also had to elevate the guest experience they offered to make the resort feel more like a private, luxury vacation rental than what it would be like just staying at a typical hotel.

That meant having staff at guests’ disposal 24/7, small, invisible touches like welcome cocktails and sunset bonfires every night on the beach, having a private chef on call, and forging partnerships with local boat captains, scuba diving guides, and airlines like Sky Tropic founded by stunt pilot Mark Mizrachi who can fly guests in and out of Contadora based on their schedules, not the other way around.

To understand the potential that Kiibler and his partners initially saw in launching their 4 Elements brand on Contadora, however—and what it could do to nudge the future of hospitality, real estate, and sustainability in Latin America forward—it’s also essential to understand Panama.

Compared to Costa Rica to the north, which has been Central America’s go-to for ex-pats, retirees, and adventure seekers for more than three decades thanks to great marketing, Panama so far has done a C- grade job of telling its own story.

Beyond its beaches and biodiversity, Costa Rica doesn’t have much else to shout from the mountaintops about (no offense; I love Costa Rica). San Jose, its capitol, is historic, safe, and stable; but far from cosmopolitan.

Panama City, on the other hand, looks like Miami when you fly into it. Gleaming, glass high rises scrape at the clouds on the precipice of the Pacific Ocean. Many are banks and global corporate headquarters. Others are international law firms.

The rest sequester Latin America’s rich-and-famous in plush penthouses who’ve made fortunes in Venezuela, Argentina, Peru, Brazil, and Colombia in mining, textiles, and manufacturing, but long ago realized that Panama was the best place to park their money to protect it from the next unstable dictator or currency devaluation in their home countries.

Southeast of downtown, Panama City’s four-centuries old historic district, a.k.a “Casco Antiguo” is one of Latin America’s most exciting, up-and-coming hotspots, having been designated a UNESCO World Heritage Site and recently renovated virtually from the ground up. It’s now the epicenter of Panama’s world-class gastronomy and hospitality scene, teeming with nightclubs, award-winning restaurants, high-end boutiques, and upscale hotels along with Panama’s National Theater and the Presidential Palace.

A little further outside of town is also the Smithsonian Tropical Research Institute (STRI), which is one of the world’s leading tropical scientific institutions, along with the multi-colored, Frank Gehry-designed Biomuseo, or biodiversity museum.

None of this re-development or financial success has been accidental—which is why Kiibler knew instinctively that Panama’s current “moment” was always inevitable and that his long game eventually would pay off.

“Panama’s pitch is actually really simple,” he tells me. “It’s the only country in Latin America with first world infrastructure, investment security, world class hospitals and healthcare systems, jungles, fishing, and diving that rival anything in Costa Rica or Mexico, easy access from everywhere in the U.S., and multiple flights daily to nearly the entire world. When you add all of that up, there’s no other place like it in the world that hasn’t been discovered yet.”

There are two reasons for this.

The first is the Panama Canal, which the U.S. built and ran for almost a century, along with the military presence to protect it.

The Panama Canal connects the Atlantic and Pacific Oceans at the country’s narrowest point and supports fully 2/3s of all global trade which transits daily through its locks, including the largest supermax tankers in the world thanks to a second canal expansion that was completed in 2016.

This gives Panama outsized geo-political power asymmetrical to its size and population, similar to Japan or Singapore when it comes to manufacturing or international banking. It also means that despite the U.S. formally relinquishing control of the canal back to Panama on December 31st, 1999, America still exerts enormous influence on the country politically and militarily, including the right to retake control of the canal in the event of any threats to its neutrality, like say a Russian nuclear submarine menacing global supply chains at either end.

The second reason for Panama’s stability and success is that the country’s official currency is the U.S. dollar, not simply “pegged” to it like other global currencies that create the appearance of financial stability, but inevitably can’t prevent a run on the banks if there’s a shock to the system.

Long-term that’s lent two critical assets to Panama’s development compared with neighboring Central American and Caribbean countries.

Where there is financial stability in emerging markets, multinational corporations tend to follow. So, it shouldn’t come as a surprise to anyone who’s paying attention that most of the world’s largest companies like Halliburton (energy), Mexico’s Cemex (the world’s largest cement producer), Copa Airlines (Latin America’s largest airline), Proctor & Gamble and Hyundai have found Panama to be a corporate panacea, offering a high quality of life, low taxes, and a central, strategic location with direct access to Latin America’s 400 million consumers.

Panama’s financial stability and first-world infrastructure have also made it a haven for capital flight from other Latin American countries, which in turn has fueled a series of development booms over the past two decades that’s poised Panama City and islands like Contadora and Bocas del Toro to become some of the next hottest international real estate markets in the world.

“Most of Latin America has become or remains unstable politically and financially,” explains Kiibler, “So Panama truly is a beacon for people to invest, buy properties, and open dollar-based bank accounts. That investment has been steady over the past decade or so. But since the recent elections in Brazil and Colombia, it’s accelerating—especially because Miami which has always been the go-to place where Latin Americans have sheltered their wealth has become too expensive. Panamá has reached a tipping point in spite of itself. Costa Rica is a nice place to visit and it’s very well promoted, but it’s got nothing on Panama. So slowly, little by little Panamá is finally getting the recognition it deserves.”

All of which begs the most obvious question: given the totality of Panama’s natural, financial, and geo-political resources, why hasn’t the country’s “moment” happened sooner?

Part of the answer, says Kiibler, is historical lethargy which at times has veered on national apathy. Neighboring countries like Nicaragua, Costa Rica, Belize, and Colombia that don’t have a canal, a thriving banking industry, and embedded U.S. political and financial security have no other choice but to pull themselves up by their own bootstraps and promote tourism.

Panama, on the other hand, for decades has been fine just “as it is”. While the rest of Latin America has struggled with instability, Panama’s been the continent’s perennial locus of normalcy where not much changes.

What that’s meant over multiple, successive presidential administrations are incompetence and missed opportunities when it comes to timing and leveraging the country’s innate assets into more growth, diversification, and stability.

None of this, however, has stopped Kiibler or 4 Elements so far from exceeding all expectations in terms of bookings, occupancy, and reviews—which for Kiibler has established critical proof of concept for the brand and the potential of Panama’s hospitality industry.

“Early on in the first few months after we opened in 2021 our guests were predominantly Panamanians and we had a lot of empty rooms mostly due to the lingering lockdowns from Covid,” Emanuel Lyons recalls. “But within a few months, we started to see a real international crowd beginning to roll in and we were turning people away. We’ve now had guests from every county in the Americas and Europe and Asia as well. The biggest growth we’ve begun to see however is coming from the U.S. The impressive part is we’ve done nothing at all to market 4 Elements other than our own Instagram page organically. It’s been a word-of-mouth campaign thus far so we’ve decided to continue to let the resort speak for itself.”

Thanks to the group’s success on Contadora and the roll out of several other upmarket hotels like Bocas Bali and Hyatt’s La Compania in Casco Antiguo, 4 Elements and Panama’s “moment” have also finally caught Wall Street’s attention. So, if you believe that “if you build it they will come” applies as much to capital as it does to real estate, Panama’s tipping point is approaching far faster than anyone anticipated.

“I’ve visited countless islands and beaches all over the Caribbean and down the Gulf of Mexico and Panama is unlike anything I’ve ever experienced,” says John Lowry, founder and CEO of Spartan Capital, a leading Manhattan-based investment bank that’s funding 4 Elements’ next 100-room project in Bocas del Toro on Panama’s Caribbean side that will also include a branded residential real estate component.

“The diversity of the terrain and jungles. The white beaches and crystal, clear blue waters. The scuba diving, the trophy sport fishing, the whale watching, and kayaking. The history of pearl diving, pirates, and people like the Rockfellers, John Wayne, the Kennedys, Ernest Hemingway, Marilyn Monroe, and Joe Dimaggio all coming here over the years. The canal. All of these things don’t converge anywhere else in the world. And the fact that Panama’s still relatively ‘undiscovered’ today has the potential to change everything when it comes to tourism, hospitality, and real estate in Latin America.”

Which begs the next most obvious question: what next? If Panama’s “moment” has truly arrived and a new generation of boutique hotels and real estate developments like 4 Elements are its future, what does that mean for the country?

First and foremost, says 4 Elements Co-Founder Raul Ferrer and Senior Vice President of SDRI, jobs—and not just short-term ones in construction. Tourism is Costa Rica’s largest contributor to the country’s GDP. Panama could replicate that model without blinking. Long-term jobs as its hospitality sectors grow would also lead to a more stable tax base and a diversification of the economy beyond just offshore banking and the canal.

It would also shine the spotlight on Panama as one of the world’s next best places to retire, which is one of the most sought-after titles that countries like Portugal and Costa Rica fight for every year.

“When people visit a place and fall in love with it, they inevitably want a piece of it,” Kiibler continues. “And eventually they want to become a part of it as they get older. Hospitality feeds real estate in a vortex. Costa Rica mastered this model decades ago. And Panama is on the cusp of doing it as well which is great for the economy and great for the country’s future.”

As for 4 Elements and where SDRI as a company fits into Panama’s new “moment”, Kiibler is bullish that they’ve positioned themselves at the center of a perfect storm.

“Beyond preparing to launch our second 4 Elements in Bocas del Toro we are also planning to launch another hospitality brand called Saxony,” he tells me. “It’s the polar opposite of 4 Elements in terms of service and design. It’s a hybrid between a hostel and a hotel geared at the Millennial market with limited service, but high on amenities.”

As for Panama’s “moment”, says Kiibler, there’s never been a better time for the country to go prime time and give places like Costa Rica a run for their money.

“Panama has continued to quietly evolve and grow over the last 20 years. It’s been a slow grass roots effort. But there’s a tangible mood and feeling that we’re at a tipping point now. The word is out. Shows like ‘Caribbean Life’, ‘House Hunters International’, and ‘Naked and Afraid’ are constantly filming here. Global hotel brands are taking a hard look at us here. If you compared Panamá to a baseball game, Costa Rica is already in the bottom of the ninth inning. We’re still in the early innings and the sky is the limit.”

Play ball.

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