T3 Advisors
Why Venezuela?
Venezuela is experiencing one of the largest commercial asset dislocations in the Western Hemisphere. For some investors, that represents an unacceptable risk. For others, a once-in-a-generation window of opportunity. This page presents the data so you can decide.
An economy that contracted 80% and is beginning to recover
Between 2013 and 2021, Venezuela suffered the worst peacetime economic contraction in modern history. GDP fell approximately 80%. Industrial production collapsed. Private construction contracted 98% from its peak.
Recovery began in 2022 (+3% GDP) and accelerated in 2024 (+5%), driven by increases in oil production and an industrial rebound of 16.8%. Manufacturing output reached 47.8% of installed capacity in the fourth quarter of 2024, its highest level since 2015 -- though that means more than half of industrial capacity remains idle.
Venezuela is undergoing an institutional and economic transition. In January 2026, a new Hydrocarbons Law enabled international arbitration and private operational control in the oil industry. These regulatory changes, together with sustained signals of openness to foreign capital, create the most favorable environment for private investment since the oil nationalization of 1976.
The economy operates de facto in dollars. Over 80% of commercial transactions are denominated in USD. For investors, this simplifies entry: you buy in dollars, you operate in dollars.
Timeline
2013–2021
80% GDP contraction — the worst peacetime decline in modern history
2019
De facto dollarization — 80%+ of commercial transactions in USD
2022–2024
Gradual recovery: +5% GDP, 16.8% industrial rebound
January 2026
New Hydrocarbons Law, institutional transition and signs of economic opening
Assets at a fraction of their value
The former president of Venezuela's Real Estate Chamber put it this way: "If it costs between $1,000 and $1,500 to replace a square meter and it sells for $200-$300, it's selling at 20-30% of replacement value."
New construction is economically irrational at current prices: the cost of building ($1,000-$1,500/m² residential, $1,500-$2,500/m² commercial) exceeds market price by 3 to 5 times. This creates a natural price floor: new supply cannot compete until prices rise significantly.
| Asset type | Caracas ($/m²) | Bogota | Santo Domingo | Panama City |
|---|---|---|---|---|
| Premium office | $500 – $1,500 | $1,800 – $2,500 | $2,000 – $3,000 | $4,300 |
| Mid-range office | $200 – $500 | $1,200 – $1,800 | $1,500 – $2,000 | $2,000 – $3,000 |
| Prime retail | $500 – $1,200 | $1,500 – $2,500 | $2,000+ | $3,000+ |
| Industrial | $100 – $300 | $800 – $1,200 | — | $1,000 – $1,500 |
Sources: CBRE MarketView, El País, local market analysis. Caracas ranges reflect recent transactions and active market listings.
Historical precedents
Four markets went through comparable crises and then recovered. None is identical to Venezuela, but the patterns are instructive.
Argentina (post-2001)
GDP fell 20% in three years. The peso collapsed from 1:1 to 3.9:1 against the dollar. Real estate prices in Buenos Aires dropped 30-40% in dollar terms. The recovery was sustained: 9% annual growth for five consecutive years. Those who bought during 2002-2003 captured total returns of 16-20% annually over a decade.
Colombia (post-peace agreement, 2016)
Medellin recorded zero years of decline between 2002 and 2024, with 7-8% annual appreciation accelerating to 10-12% in 2023-2024. Crime dropped 80%. By 2024, one in four properties sold was acquired by foreign buyers.
Myanmar (2011 opening)
Land prices tripled or quadrupled in Yangon suburbs in six months. Office rents reached Manhattan levels. But Myanmar is also the cautionary tale: by 2017-2018, rents fell 70% due to oversupply and political setbacks. The lesson: timing matters.
Kurdistan (post-2003)
$20 billion was invested from 2006 onward, with $11.1 billion in housing alone. Prices multiplied fivefold in five years. Brands like Sheraton and Hilton entered the market. Kurdistan started from a worse base than Venezuela.
“An investor can't just fly to Caracas and start knocking on doors.”
— Robert Koenigsberger, founder of Gramercy Funds ($7 billion in assets under management), January 2026
Goldman Sachs, UBS, and Gramercy Funds have published dedicated analyses on Venezuela since January 2026, describing the market as a "tipping point" and "land of opportunity."
What can go wrong
Investing in Venezuela requires conviction, local knowledge, and risk tolerance. Any informed investment decision requires understanding these factors.
Political risk
The same party that expropriated over 1,400 companies now claims to welcome investors. Unpaid arbitration awards exceed $10 billion. The political transition is ongoing and its outcome is uncertain.
Corruption
Venezuela ranks 178 out of 180 on the Transparency International index (score: 10/100). Property registries charge up to 40% of the sale value instead of the legally mandated 2%.
Deteriorated infrastructure
Approximately 200 power outages daily. Electricity rationing in 22 of 23 states. PDVSA pipelines not updated in 50 years.
Security
The homicide rate is 26.8 per 100,000 inhabitants (2023), a significant improvement from peaks of 79-90 per 100,000 in 2013-2015, but still elevated by regional standards.
Sanctions (OFAC)
U.S. Office of Foreign Assets Control restrictions affect transactions with a U.S. nexus. Each transaction requires a case-by-case compliance assessment.
We say this openly because we believe an informed investor is a better partner than one who discovers the problems after the fact.