A group of 30 diasporans has come together to purchase a stale listing property in Negril, Westmoreland. Now, they are actively seeking similar real estate opportunities for vacation homes or Airbnb rentals.

Coral Sea Cliff, a hotel in Negril, Westmoreland, that has been on the market for at least five years, was the group’s first purchase. Building on the success of that deal, the group is now in talks to acquire three more boutique hotel properties.

The deals are being coordinated by real estate finance professional Delano Dowdie.

“People are loving this initiative and all that’s happening is that they are talking to other people, friends and family that missed out on this opportunity. And so we are looking at three other properties in Negril to purchase, two of which are in close proximity to the first property,” he told the
Jamaica Observer.

Dowdie, who resides in New York, US, was one of several diasporans who travelled to Jamaica last year to attend ThropX Investment Conference, an annual event that takes place in Negril, Jamaica, targeting individuals interested in investing in Jamaica and those considering moving to the country. The conference features panellists from a wide range of industries, including finance, real estate, tourism, and agriculture.

“As part of the event, a realtor brought a couple of us to the property and she pitched an idea that we all buy it. When she said that, I started thinking about different scenarios of how to structure it financially and legally and so I said to her that could work, we could actually do it like a co-op, where you don’t own the building but you own shares in the building,” Dowdie said.

“That’s the first structure I thought of, but as I thought it through, it evolved into a full strata development where people had a title and control over their unit,” he continued.

Coral Sea Cliff, located on West End Road in Negril, is a two-acre oceanfront boutique property that overlooks Negril’s famed west coast. The property features 30 rooms, sea access a few steps away, splash pools, and rock formations that create natural mini pools when the sea water rises. These small basins are said to be rich in minerals from the build-up of salt deposits over time.

The property was priced at US$3 million.

“Before we left the property, I had a bunch of people saying they wanted in on the idea and by the weekend I was touring the property with a contractor and maybe 25 people who had committed to being part of the venture.

“It was a coordinated purchase essentially,” Dowdie told the Business Observer. The coordinated purchase meant that each individual only needed to come up with roughly US$150,000 to cover the cost of their condominium, in addition to any legal and administrative fees alongside the initial renovation budget.

“So in addition to the US$3 million that we spent to acquire the property, you are looking at another US$1 million to get our desired result which is to have 30 condominiums with high-end finishes. But how its structured, we are not going to be doing that deep renovation as a group, each individual gets to decide when they want to take on that level of renovation at their own time, just the basics are facilitated at group level,” Dowdie said.

Business in the hospitality sector has been on the rise post-COVID, but some boutique hotels continue to see low bookings as a result of rising interest rates. The high interest rates are impacting all areas of the industry — from the supply of capital available to investors to the amount of disposable income guests have available to spend in hotels.

Meanwhile, higher mortgage and rent costs caused by climbing interest rates will also impact the operational end of the chain, with squeezed staff seeking higher rates of pay.

Dowdie reckons that this has, in part, led to more hotel properties being listed for sale. It has created an opportunity for diasporans who have long yearned to own a piece of Jamaica to execute that dream at a fraction of the cost.

“I have found that there are a lot of hotels like this where the owner is just burnt out and ready to count their losses and just move on. And so, this is one of several that we are going after,” Dowdie told the Business Observer.

Individual titles for Coral Sea Cliff Hotel were issued earlier this month, and the hotel has been rebranded ‘The West Condominiums’ to reflect the new business model.

The next step is to renovate the entire property, for which Dowdie had budgeted an additional US$30,000, or 10 per cent of the purchase cost, in the individual purchase contracts. Renovation work on the property is expected to be completed by October.

Thereafter, some property owners will seek to recoup some of their expenses through the listing of their properties on Airbnb platforms. Others are opting to keep their condominium solely for private use during visits to Jamaica.

“For those who decide to rent, we are going to be tapping into the natural beauty of Jamaica and the properties. Think seaside garden and oasis, that’s what we will be putting out there,” Dowdie said.