There’s a quiet strategy playing out behind the scenes of some of today’s most compelling hospitality developments — and most individual investors never hear about it until it’s too late.
Institutional buyers are quietly stepping in at the pre-construction phase of branded residential and condo-hotel projects. Their timing isn’t just strategic — it’s transformative.
Why Pre-Construction is the Institutional Sweet Spot
Developers at the earliest stages of construction often face capital pressure to secure financing, meet lender milestones, or unlock the next phase of building. This is the window where large buyers — particularly those willing to purchase multiple units or even an entire building — gain the strongest negotiating power.
These early-stage deals often include:
• Preferred pricing at the absolute floor of the pricing stack
• Customizable terms, including extended payment schedules
• Developer incentives like rental guarantees, yield protection, or brand-led buyback options
• Access to inventory that may never hit the open market
As the project nears completion, pricing typically escalates. Once it opens — especially if brand affiliation and performance metrics are strong — the value curve steps up again.
For institutions with patient capital, this timeline offers significant upside with comparatively lower acquisition costs.
A Recent Example in the Caribbean
Recently, a European investment fund acquired an entire building within a Caribbean condo-hotel development — a move that not only secured long-term rental and appreciation potential, but also gave the developer the financial capability to break ground. While the deal remains confidential, it reflects a broader trend:
Smart capital is stepping in early — not late — in hospitality real estate cycles.
At LHA, we helped advise on this transaction and are increasingly seeing funds expressing interest in similar plays: boutique hospitality developments in high-demand lifestyle markets, where residential offerings are branded, serviced, and positioned for long-term income and resale upside
How LHA Supports These Transactions
LHA acts as a discreet conduit between developers and serious investors. Because of our deep involvement with hospitality-led real estate — both on the development and operator sides — we’re often engaged early, before projects go to market.
Our role includes:
• Curating opportunities where pricing and scale make institutional sense
• Advising on deal terms, brand alignment, and projected performance
• Offering insight into comparable projects and past exit scenarios
• Supporting negotiation to balance investor protections with developer
Final Thought: This Window Doesn’t Stay Open
Once a project is financed and construction is underway, the urgency shifts. Pricing tightens. Terms standardize. And the negotiation window closes.
For investors willing to look before the ribbon-cutting, there are major advantages — not just in price, but in control, customization, and long-term positioning.
Interested in learning more about how these deals are structured or what’s currently available? Reach out to the LHA team for discreet, curated introductions to projects in the U.S., Caribbean, and Canada.
For additional articles on luxury hospitality and real estate, visit the LHA Library here.