Fifteen or twenty years ago, many property owners in Santo Domingo, Santiago, or Punta Cana were proud of their newly inaugurated towers and plazas. They were modern buildings with luxury finishes, ample parking, and top-tier corporate clients. They were, quite literally, the jewels of the market. However, the story has changed. What was once Class A may now be Class B, or even C, and what was once a benchmark of prestige, design, location, and presence now risks becoming a "zombie" asset: well-located, but empty and generating no income.
This phenomenon is not unique to the Dominican Republic. In Miami, Madrid, and Panama, the same pattern is repeated: those who don't adapt are left behind. Competition is no longer just about location; now energy efficiency, environmental certification, integrated technology, design, amenities, parking, and even the overall experience of a lobby upon entering all matter.
When tenants leave
Many landlords have experienced this firsthand. A tenant who has lived in a building for years suddenly announces they are moving. It's not a whim: it's the sum of details that make all the difference. The parking that was once sufficient is no longer enough; before, there was one parking space for every 40-50 square meters, and now there's at least one space for every 30 square meters. The lobby, which was once impressive, now looks outdated, and remodeling entrances has extended leases to up to five years. The infrastructure is obsolete, with slow elevators, limited wiring, and air conditioning that consumes more than it should. The facades lack a modern urban presence. Even the area's congestion and unsustainable traffic play a role: companies that valued being in certain areas now prefer more agile hubs with access to public transportation and more parking.
There are local cases that clearly illustrate the situation. A building in Piantini, after losing its anchor tenant, remained vacant for several years because the owner refused to invest in modernization. Eventually, it had to be sold to a real estate investment fund that did see the opportunity to reposition it. In contrast, another tower in Naco decided to renovate its lobby, improve the climate control, and modernize its electrical systems. The result: it retained its multinational tenants and extended contracts without having to lower rates.
Deciding whether to invest or sell
At this point, the owner faces a dilemma: do I invest in the property to become competitive again, or do I sell it before it loses more value? The answer depends on the current market cycle.
In expansion phases, like those Santo Domingo is experiencing today, new buildings and green certifications are the first option, and old ones only survive if they are modernized.
In maturation phases, older properties must compete on price or renovations.
And during adjustment phases, when vacancies rise, Class B and C offices become attractive precisely because of their lower cost. Understanding which cycle your city is in is key to making the right decision.
Real estate "botox"
To illustrate, let's consider a simple comparison. Real estate, like people, goes through phases. A 25-year-old woman is content with her natural freshness, full of collagen and youth; but upon reaching 50, it's time to invest in staying relevant: healthy eating, hydration, seven hours of sleep, weight training, supplements, and the benefits of dermatological treatments. A "Botox" in the lobby, a few extra hours at the "gym" for energy efficiency, or even a makeover by repositioning the building in a different market segment. What isn't renewed, ages. What invests in its image continues to attract attention… and contracts that reach attractive cap rates.
Strategies that actually work
Some landlords manage to retain key tenants through selective investments: remodeling facades, negotiating parking spaces on nearby lots, modernizing climate control systems, or adding attractive common areas such as cafes, rooftop terraces, meeting rooms, and gyms. Others decide to reposition the asset: offices converted into medical practices, retail spaces in convenient strip malls, apartments, or industrial warehouses in urban logistics hubs. And then there are those who turn vacancy into opportunity by offering move-in ready spaces or dividing areas into smaller modules for startups, coworking spaces, plug-and-play solutions, and mid-sized BPOs.
But it's also important to know when to sell. If the cost of modernization exceeds future profitability, it may be more profitable to sell the asset. In the Dominican market, there are investment funds that specifically seek properties with renovation potential. And there are end users who buy properties because they've grown and want to stop renting.
The role of the real estate advisor
Throughout this process, the specialized real estate advisor is more than just an intermediary. They help the owner diagnose why a tenant left, compare metrics with competitors, design a viable repositioning plan, and connect with architects, engineers, and value-add funds that can execute the strategy.
Conclusion
A building that was once Class A and is now Class B is not a failure: it's an opportunity. With smart investment, strategic repositioning, or a timely sale, an aging property can become competitive and profitable again.
In a market as dynamic as the Dominican Republic, the owners who react in time are the ones who manage to transform the old into the new again.
The opinions expressed in this article are the sole responsibility of its author.
