Inside Veranó’s ‘city house’ concept for Puerto Rico

SAN JUAN, Puerto Rico — Veranó Hotels + Resorts announced last week that it is opening its first hotel, the 40-key Veranó San Juan, next spring. The hotel will be part of a new luxury lifestyle brand and the first of three properties to open in Puerto Rico for the company.

The Veranó San Juan is the company’s “city house”, an adaptive reuse project that is being converted from a 1950s office building and located on Ave Juan Ponce de León, known as the “Park Avenue of the Caribbean.” San Juan-based Veranó is also planning the Veranó Caimito, a “jungle house” property located in a rainforest 30 minutes from San Juan in Caimito and a “beach house”, the Veranó Cabo Rojo, which is located on the southwest corner of Puerto Rico with 2,000 feet of beachfront. The properties are owned by Island Paradise, a qualified opportunity fund, and IP QOZB LLC, which is a tax-incentivized hotel development fund.

Hotel Investment Today talked to John Sears, managing director of Veranó Hotels + Resorts, about the developments and the company’s pipeline. He said Veranó has been developing longer than other brands on the island and has $100 million of investment capital to work with.

“We have a two-year head start on the luxury market in Puerto Rico,” Sears said. “Since we’ve started, Aman, Rosewood, Mandarin Oriental, Discovery Land, Four Seasons and Auberge have announced their new hotels coming to Puerto Rico.”

Veranó has the three hotels in its current pipeline and is in discussions to acquire two more, Sears said. The Veranó Caimito has started the construction/redevelopment phase of the project, while the Veranó Cabo Rojo is still in the architectural/engineering/design phase. Sears said six potential properties that would be under the new brand and managed by Veranó are in the late stages of permitting and financing and are located in Mexico, Italy, Colombia, Ecuador, the Dominican Republic and the Virgin Islands.

Veranó will also operate the properties. Sears said that all three hotels are conversions, which fits into the company’s philosophy.

“We’re preserving what we can on the island and working within existing buildings for adaptive reuse in three different scenarios,” he said. “The city hotel is being converted from a 1950’s office building. The rainforest resort is a conversion of a previous 'no-tel motel' and is surrounded by a rainforest and a prestigious community.  The beach resort is combining two previous adjacent resort properties that were destroyed in the 2017 hurricane (Maria).”

The company is also creating a “Veranó Club House” at its properties, which Sears said will take pressure off room revenues (rates will start at $400+) for the company and also be a reciprocal benefit for members at new locations.