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."
Risks you should know about
Investing in Venezuela requires conviction, local knowledge, and a clear plan. Here are the real risks of the market, and where each one is heading.
Political risk
The same party that drove mass expropriations during the previous cycle is now the one seeking to attract capital. Unpaid arbitration awards exceed $10 billion and the outcome of the political transition is not yet settled.
The transition is being negotiated under active international mediation. Bilateral investment treaties and international arbitration clauses remain in force, and other Latin American economies have navigated similar transitions and emerged with more stable rules for capital.
Corruption
Venezuela sits in the lower band of the Transparency International index (ranked 178 of 180). In practice, notarial and registry processes carry informal costs well above the legal framework.
Serious operators shield transactions through international escrow, private arbitration, and exit jurisdictions outside the country. These are standard market mechanisms that meaningfully reduce exposure.
Deteriorated infrastructure
The electrical grid operates under severe constraints: active rationing across most of the country and PDVSA pipelines that have not been upgraded in decades. Any asset connected to the public network absorbs these costs.
Since 2023, energy, gas, and water concessions have been opened to private capital, and asset-level self-generation (gas and solar) is now standard practice among international operators. The deficit itself has become a concrete investment opening.
Security
The homicide rate fell from 79-90 per 100,000 inhabitants in 2013-2015 to 26.8 in 2023, a reduction of more than 65%. It still exceeds the regional average for several cities.
The downward trend has been steady since 2016. The main commercial corridors today operate with standard corporate security measures, and multiple productive sectors report continuous business activity without incidents.
Sanctions (OFAC)
Restrictions from the U.S. Office of Foreign Assets Control (OFAC) affect any transaction with a U.S. nexus. Each operation requires a specific compliance assessment.
The regime has progressively eased by sector through general licenses (energy, telecommunications, humanitarian). Investors today operate under structures reviewed by firms specialized in OFAC: it is a technical process, not an insurmountable obstacle.
We say this openly because an informed investor makes better decisions. The risks exist, and so do the tools to navigate them.