According to Bloomberg, Paulson & Co. is in final negotiations to acquire La Concha Resort and the Condado Vanderbilt, neighboring beachfront resorts in the capital city of San Juan, Puerto Rico, according to sources with knowledge of the deal. The deal is reportedly valued at somewhere north of $200 million.
Representatives from Paulson & Co. and Puerto Rico’s Government Development Bank (part owner of the resorts) were contacted by Bloomberg, but declined to comment.
History of the resorts
The two properties involved, the La Concha Resort and the Condado Vanderbilt, underwent a major refurbishing back in 2004, including the construction of towers for condominiums. A report from the Puerto Rico GDB placed a value of the project at around $450 million in October 2009.
However, the reopening of the refurbished properties was delayed due to lack of funding. The Condado Vanderbilt, residing on property owned by Frederick William Vanderbilt in 1919, did reopen in October 2012, but the adjacent residential towers did not. The La Concha reopened in December 2007. The La Concha resort also includes the Casino Del Mar.
The resorts are considered prime property, located on Ashford Avenue in San Juan’s Condado district, a well-heeled district of the island.
Paulson betting big on Puerto Rico
Well-known investor John Paulson, who made billions on his bet on the subprime crisis, is increasing his investments in Puerto Rico. Paulson is following the old adage “buy low” with Puerto Rico, as the commonwealth is currently trying to find a way to deal with a crushing $72 billion debt load.
Although the economy of the island has slumped 14% since 2006, apparently Paulson believes it might be set for a turnaround. Paulson & Co., which acquired a stake in the St. Regis Bahia Beach Resort and the Bahia Beach Resort & Golf Club in September, is planning to invest up to $1 billion in Puerto Rico in 2014 and 2015, according to Puerto Rican officials. Paulson is also a major investor in the island’s biggest bank, Popular Inc.