When Jeff Barton left Miami’s thriving real estate business for Panama City in 2006, he was leaving security for opportunity. In Miami he was part of an established team, First Equitable Realty III, where he worked closely with the developer, owners, tenants and a large property management team.
But Panama City beckoned, offering a chance to use his skills in the fastest-growing real estate market in the region. Jeff took over the role of managing sales in the Trump Ocean Club, the first Trump-branded project outside the United States and the most distinctive building in the city. When the global economy collapsed, the Trump also became a source of controversy as the Panama City market felt the impact of the steep drop-off in North America.
Today, as managing director of Punta Pacifica Realty, Jeff is one of the city’s foremost real estate experts, working closely with both institutional and independent investors. He offers unique insights and analysis of the Trump and the waterfront towers of Punta Pacifica, where Punta Pacifica Realty is the largest real estate and property management company.
My family has had a long history of real estate-related businesses. I was exposed to commercial, hotel and residential real estate projects from a young age. It’s hard to put a finger on it. I was always attracted to the business and appreciated the opportunities associated with real estate investments and management.
You went from Miami to Panama City. How did the two markets compare?
My transition from the sophisticated market of Miami to the early stages of a real estate boom in Panama revealed both similarities and contrasts. Both had an international target market of investors looking for a mixture of capital appreciation and rental returns. However, in Miami the market was far more transparent, a quality which was and still is lacking in Panama. That made the learning curve far harder in Panama. It was tough to understand real numbers related to pricing, sales volume and actual supply.
But I recognized immediately that Panama City had all the attributes of Miami, it was simply 10 years or so behind the timeline. I could see the opportunity in Panama City, which was fading in Miami.
What was it like selling the Trump Ocean Club in the boom years?
It was a very active, crazy time with the majority of the sales taking place over the phone during the years before construction. Although many people were not familiar with the Panama market they were familiar with the Trump brand which provided a significant advantage over sales at other pre-construction properties.
It was exciting to see the Trump develop as the icon of the city. It set new pricing levels and standards for quality. It changed the market
The downturn affected markets all over the world and Panama City was no different. Many people were unprepared for the downturn. Fortunately Panama City rebounded much, much quicker than most markets. No one likes to see the value of properties drop in any situation, but those that decided to ride it out are now seeing those values increase again, which is the type of cycle you can expect from a long term investment.
What lessons did you learn from the economic downturn?
There were many lessons. But the most critical I learned was the importance of being sure the funds are available to close a deal, with or without a loan from the bank. Unfortunately, many learned that the hard way when bank lending dried up and that option was no longer available for many buyers who were relying on financing to close.
How would you describe the state of the real estate market in Panama City?
The market is very strong going into 2016, after several years of a plateau. There has been steady activity in recent years, unlike many international markets popular with investors, but now we’re seeing a definite uptick. The increases in prices are resulting from the reduced apartment supply, which has been absorbed during the past three years, when very little new construction came on the market. Plus, there has been a steady influx of buyers from Venezuela, USA, Canada and Colombia, and a new stream of European buyers.
Where are the opportunities for investors?
Finding investment properties that are already providing steady cash flow makes a lot of sense. Any appreciation in prices will only add value. Cash buyers can also find good deals in distressed properties. For the first time in years there are also new preconstruction properties on the market, providing an opportunity for substantial discounts.
What shifts can we expect in the market in the year ahead?
The key factor is supply. Demand is growing, but there supply is shrinking, especially of quality luxury apartments. It’s getting harder and harder to find the top apartments in the best buildings. Which is why top tier building are already seeing the greatest appreciation. That suggests prices are ready to go up.
What do you do for fun in Panama?
I love getting out in sunny Panama — fishing, travel to the islands, exercise on the Cinta Costera, recreational soccer, tennis. Panama City is a great active, vibrant city.