Casco Viejo real estate is a niche market indeed, and this interview with field expert Patrizia Pinzon of Arco Properties can help educate future investors on what to expect.
Los Cuatro Tulipanes: How has the Casco Viejo real estate scene changed over the past year?
Patrizia Pinzon: In general, over the past 5 years the real estate scene in Casco has increased exponentially. However, the past year has been interesting in that, for the first time, we’ve seen lots of projects going on at the same time. Many developers are presenting projects, hotels, residential complexes: it’s the first year we’ve seen a boom of building action and a flurry of new businesses opening.
LCT: What kind of investor profile tends to fit best in Casco investment positions and who is having the most success?
PP: For us, it’s someone who has seen a neighborhood change and understands the process. In our experience, individual foreigners looking to build something on their own tend to be less successful. The process seems to be just too complicated, they get tired, and a lot of times they’re trying to do it from abroad. There are, of course, the language barriers as well.
For us, the happiest people are those who go with restored apartments (most commonly) on pre-sales. The value of these properties goes up by the time they occupy their units and they come out happy that they got in early. Americans are #1 buyer in many ways, but a big chunk are Europeans as well. Panamanians are most often the ones developing (and selling in a lot of cases). The rest of Latin America (void a couple of Columbian developers) is not so represented in Casco. The few Colombians that are here, seem to get it because they’ve seen Cartegena: they’re able to visualize the potential.
LCT: What is the biggest hitch first-time buyers run into with Casco Viejo real estate?
PP: Definitely, the biggest hitch is in understanding the process. We spend a lot of time explaining this process (whether you’re buying renovated real estate or not) and how things work to our clients because it’s a long course of action, specially for unrenovated property (upwards of 2 years). Designing contracts, making offers, what to do with a piece of real estate once it’s yours…these kinds of things are a mystery to first-timers.
LCT: How does Casco Viejo real estate most differ from real estate elsewhere in Panama?
PP: The difference is simple: it’s the fact that what we have here is a limited edition: just like a good art piece. The rest that you’ll see on Avenida Balboa and Punta Pacifica and Costa del Este is duplicable. The Casco, well, you simply cannot replicate it.
LCT: Would you sell a piece of Casco Viejo real estate to just anyone willing to pay? Or do you tend to hold certain standards?
(At this point in the interview, the receptionist at Arco came wandering by wearing a telephone headset with blinking blue lights and I told her she looked like a character from Star Trek. She clarified, “more like Power Rangers”).
PP: I definitely hold certain standards. I realize this (Casco Antiguo) product isn’t right for everyone and in many ways the success of Casco comes from the success of the people in it (whether developing, living, or renting). The success comes from being happy with what exists. Everyone has to do their part and if they’re not going to do their part (meaning solely speculate, which by the way is against the law) I won’t sell them anything. Further, the wrong kind of buyer won’t create a value for me, their neighbors, or my other clients. That type of person we don’t sell to and yes, we have turned away such people in the past.
LCT: What’s the secret to the evolution of Casco Viejo; in order to keep a balance of renovation and old-world charm?
PP: Balance is difficult to achieve as things are becoming so expensive. I would say that if everyone puts their own grain into social responsibility, there are many things that can be done that’d have that progressive effect on the society. Supporting Fundacion Calicanto, for example, in the training they do with women and children. There are so many things that contribute to this neighborhood and it takes HUGE social awareness to make it a better place for everyone.
LCT: Boxers or briefs?
PP: Boxers or briefs…what is that?
LCT: Anyways, regarding safety in the Casco, what advice do you give investors regarding violence and petty crime?
PP: I tend to be 100% honest. It’s better than many other areas of Panama (and the world) but you have to use common sense. Of course, it depends on the street, but I tend to be very up front and tell clients that, hey, your street has a gang on it. I equally though like to point out gangs that have gone through programs-and then suggest that perhaps you’d like to contribute to this program. If the investor is far away (in, say Chorrillo), there are gangs and there is activity and it depends very much on the nature of said investment. The scene in Santa Ana was the same as Plaza Bolivar (now what many locals consider their favorite plaza) back in 1997. Things change.
LCT: What’s the average cost/m2 of Casco Viejo real estate these days in, say, three different investment hot spots?
PP: Well, for restored apartments, the going rate is $2,300- $2,500/m2. We even have one oceanfront project that’s priced at $3,000/m2. If we’re talking about un-restored, it really depends, but $1,200/m2 is about average. If we’re talking far outside the quarter, you can find stuff for $300-$400/m2. We’ve been scouting buildings there to build social housing. The areas where you can find these properties are rough now and social housing is the right product for it.
LCT: How do you estimate price/m2 will increase one year from now? How about five years from now?
PP: Well, back in 2005 the most expensive apartment was $1,250/m2 (in reality ranging from $1,100-$1,250) and now we have five hotels coming in (four of which are confirmed). In five years, I have to believe it would surpass Cartegena which is upwards of $5,000/m2
LCT: What’s the hottest piece of Casco Viejo real estate you have on file right now?
PP: Renovated, I’d say La Merced on Plaza Hererra which are apartments with views to plaza and causeway priced at $2,300/m2. Un-renovated, probably this one building of a friend who’s grandma died on 10th street, called Dona Marina (it costs $500,000). It’s a spectacular building (300m2-3 floors) with views of causeway and Paitilla. But as you can imagine, tons of people are fighting over it.
LCT: What’s the best Casco Viejo real estate opportunity you’ve had to turn down?
PP: (Chuckle) In this business, you see properties that you want sooo badly but you can’t have them. Personally I wanted to buy an apt in Benedeti (top floor unit, looking to Avenida Central) but I SOLD IT!
LCT: What’s one little-known fact about Casco Viejo?
PP: The beaches are good. You can actually sit on the beach on a Sunday (at low tide) and enjoy it. We’ve done it a couple of times.
LCT: Do you go in the water?
Patrizia Pinzon represents Arco Properties, and can be reached at 211-2548 or firstname.lastname@example.org