Investment Report
O-Barrio Trend & Lifestyle Residences
Obarrio, Panama City
Mixed Use Complex in Panama City
Total Estimated ROI
94.29% in 2032
General Description
Location:
60th Street East, Obarrio, Panama City.
Start of Construction: 2023
Project Description:
Mixed use, 50-story building in Obarrio. Airbnb-Ready, 6 different models of apartments with LockOff options for short-term rentals, coworking center, gym, complete social areas, rental pool, property admin, resident’s app and free transportation for guests and residents.
Full floors for sale to investors.
Structure of the report
To be able to analyze this kind of investment in a proper manner, we must take into consideration several factors. Each one of them will have possitve or negative impact on the outcome of the report. This factors are:
Project Summary
Background and current market state
Investment Model
Forecast Validation
Outcome of the Report
Keep Reading! We are talking about a lot of money.
Not everyone is a fan of reading, but in this case its important. Understanding this information can earn you a lot of money.
Section 1
Project Summary
O-Barrio Trend & Lifestyle Residences is a mixed-use development located in Obarrio, Panama City. It is the first of its kind in Panama City, and manages to combine the comfort of an exclusive residential complex with the dynamism and image of the big cities. All in an imposing 50-story tower.
The building, in addition to the residential areas, will offer its visitors a restaurant area on the ground floor, a Concierge service, free transportation for residents and guests, coworking, a gym, a sports lounge, a boxing ring, a jogging track, an impressive rooftop with pool on the 50th floor and numerous other attractions.
The building complies with all the provisions to obtain the Airbnb-Ready permit, so all the units can be rented in the short, medium and long term, either individually by the owner, or within the Rental Pool managed by Quality Property. Management.
Location
Obarrio, PanamaCity
Part of Bella Vista, Obarrio is a very active commercial area, home to shopping malls such as the exclusive SOHO Mall, with renowned designer fashion brands. Among the high-rise hotels and modern skyscrapers that fill the area is the iconic screw-shaped F&F Tower (Revolution Tower). Dining options include high-end international restaurants, pizzerias and burger joints, and there are plenty of cocktail bars, pubs, and chic casinos.
What makes it different?
By being a project focused on large investors instead of individual investors or residents, it allows making highly profitable financial decisions regarding the property, even if they are unconventional measures for the Panamanian market.
The short-term rental model will always produce returns that are considerably higher than the returns from conventional rentals alone, and additionally, its business model consists of creating a valuable asset that produces passive income, to be sold as a whole in the future. This guarantees a HIGHLY LUCRATIVE exit for all those involved.
Section 2
Background and current market state
Palace of the Bay, the first large scale skyscraper announced during the 2008 real estate boom.
2008 Real Estate Boom
The real estate boom in Panama began around 2004, but it really took off to levels never seen before during 2008. At this time, 2 economic factors of great importance occurred that allowed us to highlight the main added value of Panama as an investment destination: Its economic stability.
During 2008, the world economy suffered the scourge of the global financial crisis, initiated by the collapse of subprime mortgages in the United States. This collapse in the real estate market dragged with it all the world’s stock exchanges and global financial markets, and investors who were in the world’s main markets found in Panama a safe and stable place to protect and grow their money. even in that economic mayhem. The arrival of American and European capital was combined with the first wave of Venezuelan immigrants to the country.
These 2 factors helped raise the price per m2 of properties in the city from USD 300 per m2 in 2004 to USD 6,500 per m2 in some luxury projects in the city.
These prices stayed high for about 5 years and then began to normalize around 2013.
Current Situation
The real estate market begins its recovery.
During the real estate boom of 2008-2013, a significant inventory of homes was built that far exceeded the existing demand for them, which caused the considerable collapse that we all witnessed. Analysts said that, if the property purchase rate that existed at the time was maintained, low prices could be expected for around 7-8 years until the market could handle the oversupply.
After the pandemic, strong signs of recovery are beginning to appear in the markets and amid the palpable instability of the large economies, the eyes of the world are once again looking at Panama.
Average Current ROI
According to the data sample, the average profitability of a high-level real estate property in Panama, under the conventional long-term rental modality, is around 5.8%.
It is important to note that these prices do not necessarily reflect furnished and equipped properties, as would be the case with othe project, nor are found in buildings with as many additional amenities and services as O-Barrio Trend & Lifestyle Residences.
Available Alternatives
There are 2 types of real estate investment that can obtain large theoretical returns of over 10%, well above the conventional industry average. These are low-cost room rentals in popular areas of the city and investment in flexible properties that are authorized to carry out short-term rentals in a legal and regulated manner. Both, if carried out correctly, can produce high returns.
Cheap Room Rentals in popular areas
Luxury projects under short-term rental modality
Benefits of Investing in Panama
Investing in real estate in Panama is one of the safest decisions, as long as you get involved in a project that has a realistic chance of generating high returns. Here are some of the most important factors to consider:
Dollarized Economy
Vibrant Banking Sector
Friendly Tax Code
Crisis-Resistant Economy
Stable Social Economy
Section 3
Investment Model
In simple words, the business consists of 3 main stages.
O-Barrio Trend & Lifestyle Residences Construction
Once the goal of selling complete floors among investors is reached, the construction of the project will begin. This should start in mid-2023 and should end by the end of 2026.
Administration of the complex until income stabilizes
This stage should last 5 years. All investors will receive the profits corresponding to the rentals of their units while we take care of reaching a point of predictability in the income generated by O-Barrio Trend & Lifestyle Residences
Sale of the entire complex to a REIT or Investment Fund
After 5 years, with stable income, the entire property will be sold to a REIT or foreign investment fund as a rental property. This will produce a considerable profit for all involved.
Investment Structure
Payment Schedule
Profit Summary
Final amount based on a 2.5% yearly increase in value since the purchase date.
Total Investment
USD 1,847,515.70
Rental Income
USD 870,523.02
Resale Income
USD 2,719,031.48
Final Profit
USD 1,742,038.80
Price per SQM Comparison
Average price per SQM
When we analyze comparable properties in similar areas of the city, we find that luxury apartments for sale today have an average sale price of around USD 3,138.29 X M2
USD 3,138.29
Average SQM in TOC
We must look at buildings that have management services and legal authorization for short-term rental, such as the TOC, formerly Trump Tower. In this building, prices go up to USD 4250.75
USD 4,250.75
Average price in O-Barrio
The O-Barrio project has a price per m2 between USD 2,830.16 and USD 3,177.01, within the range of prices for conventional luxury apartments, but considerably below similar options such as TOC.
25.26%
Under Market Price
Section 4
Forecast Validation
As good as the numbers look, it is essential to verify their veracity before making any type of decision. In this case, let’s see how luxury properties with comparable characteristics behave on platforms such as Airbnb.
1 Bedroom Apartments
Average Avenida Balboa
USD 118.48
Average Punta Pacífica
USD 132.17
Average Marbella
USD 107.56
Average O-Barrio 2 bedroom
USD 84.86
2 Bedroom Apartments
Average Avenida Balboa
USD 134.90
Average Punta Pacífica
USD 165.20
Average Marbella
USD 137.56
Average San Francisco
USD 121.00
Summary
After analyzing all the numbers linked to the project, our final recommendation is to analyze the possibility of investing, either individually acquiring at least one full floor or signing up for a collective purchase. The real estate market offers mostly stability and security in investments, since no matter what happens, the physical asset continues to exist. However, it is not common to find projects that offer, in a reasonable and credible way, such a high return on investment in such a short time.
You will then be able to see the summary of the numbers.
Investment Performance
Total Rent Profit
USD 870,523.02
This is the estimated total income from the rental of the 11 units included in the full floor, in the period of 5 years of operation expected before the resale of the entire project. This amount already includes deductions and costs.
This amount in itself already represents an ROI of 47.11% on the total investment amount.
Total
USD 870,523.02
Total profit from rents during the first 5 years.
ROI:
Resale Price
USD 2,719,031.48
Estimated resale value of the apartment acquired after 5 years of operation
Total Initial Investment
USD 1,847,515.70
Total investment cost. Includes the purchase of a full floor and all the necessary equipment (Appliances, furniture, decoration).
Total Profit For The Investor
USD 1,742,038.80
After final resale. It is obtained from the sum of the rents collected during 5 years and the increase in value after the final sale.
Total ROI
94.29%
Disclaimer
The results of the report are not responsability of Ceetio nor any other involved party. They don’t reflect personal nor particular agendas. They are the result of a detailed analysis of available data, both statistical and legal, and previous experiences in the industry. All this information can be verified and comes from public sources available to anyone.
The assessments on this report are recomendations. Therefore, feel freely to take them into account or not.
Trust But Verify!
Like the popular says goes, trust but verify. If you can the code or press it, you’ll access some of the data we gathered to build this investment report.
All the information in this report, bar our personal texts with the owner, come from public information available to anyone.
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