Unlocking Caribbean Capital in 2025

The Caribbean has long been recognized as a region of opportunity and risk, particularly for real estate development, luxury hotels, and infrastructure. In 2025, unlocking Caribbean capital has never been more vital, especially in a world where sustainability and economic resilience are at the forefront of investment strategies. ?This article summarizes our recent ULI panel discussion, Unlocking Caribbean Capital in 2025 with a special focus on the key factors driving Caribbean capital in 2025, such as impact investing, real estate development finance, and alternative capital. Through insights from leading industry experts and developers, this post will provide actionable strategies to succeed in this dynamic market.

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Why Caribbean Capital Matters for Investors in 2025

The Caribbean region has historically offered numerous benefits to investors, especially in real estate and hospitality. The region’s proximity to the U.S. makes it an attractive location for North American investors, while its growing infrastructure and availability of government incentives position it as a hub for impactful investments. With a focus on sustainable projects, the region is increasingly becoming an attractive destination for developers and investors interested in long-term financial growth and positive community impact.

For those unfamiliar with the term, impact investing refers to investments that not only offer financial returns but also generate measurable positive impacts in the community or environment. In the Caribbean, this means developing projects that are both economically viable and environmentally resilient.

Current Lending Environment in the Caribbean

The lending environment in the Caribbean has evolved significantly over the past few years. As Isabel de Caires de Caires, ?Director, Investment Banking at CIBC Caribbean CIBC Caribbean points out, while capital was initially difficult to access post-COVID, there is now a substantial market for sustainable real estate transactions.

“In the last four years, we arranged nearly $700 million in financings, all of which were oversubscribed, “she notes.

Lending rates for real estate developments have been relatively high due to a range of factors, including inflation and the global pandemic. "Interest rates have dropped from a peak and The Secured Overnight Financing Rate (SOFR) is approximately +4 today,” Isabel explains. ?Moreover, the equity contribution required from developers has been adjusting downwards. "The debt-to-equity ratio today is around 60%," she adds. For developers, understanding the nuances of these changing requirements is crucial to securing financing in the current climate.

The Role of Alternative Finance in Caribbean Development

Alternative Caribbean finance has played a crucial role in facilitating the growth of the region’s real estate sector, particularly for developers and investors who might struggle with traditional bank loans. According to Heath Melton from Juniper Capital, the company has found success in alternative financing models, especially when developing their luxury resorts. “We’ve been able to raise capital using a mix of equity, EB5, pre-sales, and tax-backed incentives,” Melton explains. For example, Juniper Capital raised approximately $185 million for its luxury resort in Puerto Rico called Moncayo Puerto Rico by tapping into government-backed tax incentives like Act 74 and Act 60 (previously 20/22), which reduced initial capital expenditures.

In addition, David Cummings in the Webinar outlines the flexibility of funds from alternative lenders, “At Sygnus Group we can offer mezzanine financing, profit-sharing agreements, and joint ventures, which help unlock value in properties that might otherwise remain undeveloped."

The Value of Impact Investing in Caribbean Real Estate

With the rise of climate change awareness, impact investing has become a major trend in Caribbean real estate development. Investors are increasingly looking for projects that prioritize sustainability, resilience, and community impact. As Isabel de Caires notes, “Our firm has developed a framework around ESG and sustainable financing,” which is now a critical factor in underwriting decisions. Real estate projects with a focus on renewable energy, energy-efficient construction, agriculture and climate resilience are not only more attractive to investors but can also provide long-term savings in operational costs, especially in regions prone to natural disasters.

Impact investments are particularly significant in the Caribbean due to the region's vulnerability to climate-related risks. Building resilient infrastructure that can withstand hurricanes, flooding, and other extreme weather events is not just a good practice—it is becoming essential for securing capital in today’s marketplace. Moreover, sustainable projects can lower operational costs, reduce insurance premiums, and increase the property’s value, thus generating higher returns for investors.

“Luxury is shifting. It’s no longer about the bling, but about the experience,” says David Cummings, explaining the shift in demand toward sustainable and eco-friendly projects. "A well-designed, sustainable property attracts discerning travelers, and that drives up ADR (average daily rates).”

Overcoming the Challenges of Developing in the Caribbean

While the Caribbean offers immense potential, it’s not without its challenges. Local market conditions, government regulations, and financing complexities can make it difficult for developers to succeed. For instance, Heath Melton shared insights into how his team overcame logistical challenges in Puerto Rico’s east side by leveraging tax incentives and creating strategic partnerships with locals.

“The key to success in more remote areas of the Caribbean is building strong partnerships, understanding local dynamics, and leveraging government incentives,” he says. By collaborating with experienced local teams and utilizing regional funding initiatives, developers can secure the resources needed to overcome barriers and bring their projects to life.

Conclusion : Future Trends and Opportunities in Caribbean Real Estate

Looking ahead to 2025, the Caribbean’s real estate market shows no signs of slowing down. Developers and investors are keen to tap into the region's immense potential, particularly in sectors such as luxury tourism, residential communities, and sustainable infrastructure.

Moreover, the Caribbean’s unique combination of emerging markets and stable investment environments offers opportunities for both seasoned investors and newcomers. As Isabel de Caires Carre emphasizes, "The demand in the Caribbean is sustained, especially post-COVID, and this has created a wealth of opportunities for developers and investors alike."

For investors focused on long-term growth, 2025 presents a critical year to unlock the full potential of Caribbean capital through impact investing, sustainable real estate development, and alternative finance.

About the Author

Adam Greenfader is the Chairman of AG&T, a premier real estate development and advisory firm headquartered in Miami, Florida. Since 1993, AG&T has specialized in creating exceptional hospitality, residential, and resort developments throughout the Caribbean and Central America. Since 1993, Adam has played an integral role in over 55 high-profile projects valued at approximately $1.5 billion and spans key markets such as Puerto Rico, Sint Maarten, Jamaica, USVI, Costa Rica, and Mexico. The company's core services include Hospitality Development, Investment Sales, and Capital Advisory (Equity | Debt). Adam is a highly sought-after speaker and prolific writer. His recent work includes the soon to be re-released 2025 edition of “Why Puerto Rico Now: A Masterplan for Resurgence, Resiliency, and Long-Term Economic Growth,” that encapsulates his vision for a vibrant, forward-thinking future for the Caribbean region. www.agandt.com

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