Fire Sale

Dear International Living Reader,

Who in the world would want to live on a military base? I know...I thought the same thing.

But then I inspected these properties and found that they are hidden in arguably the most beautiful part of Panama City--very lush and green. The buildings are adjacent to the rain forest, so the grounds are literally framed by the tropics.

Let me back up and explain.

The American military and the Panama Canal workers helped to transform Panama City into a First World city. Now they're gone, but their work remains.

Since their departure, a glut of first-class, First World, built-to-American-standards property has come onto the market--at fire sale prices. I'm speaking specifically of the former U.S. military bases, which, along with the Panama Canal, were turned back over to the Panamanians starting in 1997.

These constitute the best buy in all Panama right now.

You can buy a four-plex apartment building at Fort Clayton, the last of the bases to be handed over, for about $140,000...or a three-bedroom, 1.5-bath townhouse (1,300 square feet) for as little as $38,000.

Some of the buildings are grouped together, but, mostly, it's low density. Most structures are two stories high. Together, these properties are the country's best real estate investment today because:

*** The infrastructure is excellent...top-notch...all built by the U.S. Army.

*** The location is ideal, close to the city and the highway and minutes from the best restaurants and business centers in town.

*** The area is home to the City of Knowledge, the leading center for technology and research in Panama. The government has set up incentives for developing this tech park, including easing and eliminating taxes and issuing special visas for highly skilled immigrant workers. Citibank and Xerox are based here.

*** The city is migrating in this direction. Panamanians want to be near the canal, after being kept away from it for so many years. In their minds, the most valued and prized real estate in the entire country is now available to them.

When Fort Albrook was turned over to the Panamanians in 1997, the area quickly developed and increased in value. One house purchased at Albrook in 1997 for $110,000 sold a year later for $220,000. The owners didn't make a single improvement. I was skeptical and asked to see the closing documents. The story's legit. Another Albrook property was purchased in January 1999 for $145,300 and sold in May, just five months later, for $185,000. Again, without improvements.

On April 6, 2001, a duplex in the Harrick Heights section near the canal administration building with an auction base price of $181,400 sold for $221,100. Less than seven weeks later, the same property was resold via the regular real estate market for $285,000. That's a 30% profit...in less than two months.

While these base properties formerly were sold by auction, today, they're available directly from the government and private owners.

Most interesting to me are the Clayton condos--some might call them townhouses. These are usually four to six to a building, which are clustered three and four together. Admittedly, they may need some work, but they're going for a song.

I don't think you can go wrong with these as an investment. And you can get in for less than $40,000. But even if you're in the market for an apartment or a home for yourself, you could do a lot worse. I've seen some duplexes converted into beautiful single-family homes of 3,000 and 4,000 square feet.

If you're interested, I can put you in touch with one of the government-sanctioned agents. Just send our office a note at Panama@InternationalLiving.com .

Kathleen Peddicord
for International Living in Panama