1. FAMILY OFFICES | DEVELOPMENT
I
n the 1980s, Ken Dart – then president of Dart Container,
the Mason, Michigan-based manufacturer of insulated
foam cups and single-service food and beverage contain-
ers founded by his father – traveled with his family to Grand
Cayman for vacation. The family fell in love with the beauty
and culture of the island, returning regularly and ultimately
purchasing a residence.
While many people would stop there, Dart took his love for
the Cayman Islands a couple of steps further. Realizing the
advantages of operating on the island, he relocated the fam-
ily investment group, Dart Management, there in 1993. In
addition to the beneficial business policies of the Caymans,
he wanted the island to be the center of his global operations
because it serves as a leading financial center and offers politi-
cal and investment stability.
Aroundthesametimeastherelocation,Dartandhisbrother
Robert were criticized for renouncing their US citizenship.
Many saw this as an attempt by the billionaire brothers – Dart
is estimated to have a net worth of $6.6 billion, according to
2013 data from global wealth tracker Wealth-X – to avoid US
taxes. The move drew the ire of the Clinton Administration
and led to the Reed Amendment of 1996, a tightening of US tax
laws for expatriates.
In the meantime, Dart began building a number of busi-
nesses in the Cayman Islands. His investment companies
manage a large and diverse portfolio of assets, and a few of
these investments have become quite high profile, including
investments in the distressed sovereign debt of Brazil in 1994,
Argentina in 2001 and, more recently, Greece. However, the
enterprise that is most likely to offer him a lasting legacy is Dart
Realty, his real estate investment arm in the Caymans.
Man with a plan
Dart Realty grew from the 1995 purchase of the former West
Indian Club on Grand Cayman and 238 acres of adjacent land
stretching from Seven Mile Beach to the North Sound. That
property forms the core of Camana Bay, a massive master-
planned development that has become Dart Realty’s signature
investment.
The idea for Camana Bay came from a number of areas,
including the Dart family’s decision that Grand Cayman was
going to be both their home as well as the global headquarters
of their operations. “One of the keys to the success of that busi-
ness is the ability to attract and retain top talent, so Ken wanted
to create a sense of community, which is why the project was
branded as the Town of Camana Bay as opposed to just the
residential or office district in Cayman,” says Jackie Doak, chief
operating officer of Dart Realty.
The bigger vision behind the Camana Bay project is to
ensure the Cayman Islands’ position as the continued financial
center and destination of choice. To do so required the creation
of a community that offered a certain quality of life – safety,
education and entertainment – that other destinations in the
Caribbean could not match.
That is where the theme of new urbanism, or the ‘walk-
able’ city, came into play. New urbanism, a planning model
made famous by developments like Seaside and Celebration
in Florida and heralded by sustainability advocates, focuses
It takes a village
Dart Realty has found success – and a long-term investment model – with a
massive master-planned development in the Cayman Islands. By Erik Kolb
Camana Bay: Dart’s signature investment
50 PERE | JUN 2015

2. communities around a lively town center with a mix of com-
mercial, residential, retail and public spaces. New urbanism
communities are designed to encourage walking and bicycling
instead of driving and foster a sense of community.
“A lot of thought went into comfort, particularly for a desti-
nation that is consistently in the 80s in terms of temperature,”
says Doak. “As a result, the planning involved incorporating
perforations into the buildings to let the breeze through, vari-
ous water features to cool areas down and tree-lined streets.
This was done so people would want to walk around the town
rather than go from one air-conditioned spot to another by
car.”
New urbanism is new to the Caribbean, and Camana Bay is
the first project in the region to employ the concept. “In terms
of quality of life, you have large international firms with several
hundred employees on Grand Cayman and, at Camana Bay,
they can work then go downstairs for lunch, go shopping or
meet up with the family,” says Doak. “This type of amenity-
rich, mixed-use community is novel in the Caribbean, where
business parks and residential clusters typically are separate.”
Cayman’s new hub
Planning for Camana Bay began in 1996, and Dart Realty
invested 10 years in thoughtful design, master planning and
obtaining permits in order to be in a position to finally break
ground on the project in May 2005. Along the way, the proj-
ect grew in scope as the firm acquired more adjoining land,
including 226 acres to the south of the Camana Bay site and
land immediately to the north, bringing the development’s
total area to more than 600 acres.
Development of Camana Bay started with the Cayman
International School, which was a very small existing school
that has since grown to 550 students. As a small island with a
small school system, there is a trend in Cayman to send chil-
dren off to boarding school in the UK or Canada when they 12
or 13, particularly among the expatriate community that works
in the local financial services industry.
“When the Camana Bay school was developed to offer nurs-
ery school through 12th grade, it was an amazing option to
those in the expatriate community because it allowed families
tostaytogetherontheislandwhiletheirchildrenreceiveagreat
education,” Doak says. “Having the infrastructure in place to
continually reside there with your family further develops the
island, not to mention Camana Bay itself, as a destination of
choice.”
The school, which is based on the US system and offers the
International Baccalaureate diploma, served to anchor the new
town and later ushered in a host of quality facilities, includ-
ing a soccer pitch, basketball and tennis courts and another 25
meter pool. All are accessible by the larger community, helping
to establish Camana Bay as a central hub.
Camana Bay also had a huge initial surge of commercial
leasing requests, which prompted Dart Realty to go beyond
development of the four main blocks of the proposed town
center and commit to a dedicated commercial building as well.
Responding to market demand, the firm built its first dedicated
office space at 62 Forum Lane on behalf of pioneer tenants EY
and Cayman National Bank, both of which signed up during
the planning phase.
In total, the town center has about 600,000 square feet of
built space, which includes 340,000 square feet of commer-
cial office space, 63 residential apartments and about 180,000
square feet of retail space. The new office going up at 18 Forum
Lane–CamanaBay’sfourthsuchproject–isan85,000-square-
foot building scheduled to open this summer, with PwC as the
anchor tenant.
Interestingly, when vacancy on office space gets down to
a certain level, Dart Realty will kick off a new development
without an anchor. “That is where we are now with 18 Forum
Lane being pre-leased, as we need at least 18 months to plan
and build another property,” says Doak. “We really want to be
able to respond to demand, with 20,000 to 30,000 square feet of
available space at any point in time.”
Ambitious plans
AllfundingforDartRealtycomesfromtheDartfamily.Island-
wide, the firm has invested about $1 billion in land acquisition
and development over the past decade, with Camana Bay cur-
rently representing about $700 million of that total.
In addition, Dart Realty currently is building a 266-room
hotel, which includes 36 investment units and 62 residential
condominiums, on Seven Mile Beach to the north of Camana
Bay. Some $98 million of the $309 million project already
has been invested, and nine levels of the hotel structure are
complete. That property, which will carry the Kimpton flag, is
scheduled to open in late 2016.
Meanwhile, Dart Realty is entering into a new agreement
with the Cayman government to invest another $400 million
over the next five-plus years. The new investment will fund the
next phase of the Camana Bay project, which envisions con-
necting the existing town center to Seven Mile Beach, where
another hotel is planned. That entails building an elevated
platform to cross over two major roads and all required
infrastructure work. As for the hotel, Dart Realty envisions a
five-star branded hotel with condominiums for sale, and it cur-
rently is in the final stages of selecting the brand.
After that, Dart Realty will look to build on the connecting
platform, which Doak envisions as similar to the High Line in
New York. Those projects will be comparable in composition
to the existing town center, with retail, restaurants and other
JUN 2015 | PERE 51

3. amenities on the ground floor and residential or office space
on the second floor. Parking for the expanded section, as well
as the new hotel project, will be located beneath the platform.
Dart Realty also will be building 101 additional condomini-
ums, representing its first for-sale development, to be located
between the school and the existing town center. That project,
which initially calls for one-, two- and three-bedroom units
spread across five buildings, still is in the planning stages,
although an application has been submitted to the Central
Planning Authority.
“It is atypical to start with the core versus establishing the
residential first then bringing in the commercial and ameni-
ties,” says Doak. “Because Cayman is such a small island with
a strong global financial services industry, there already was a
well-established residential product. As a
result, we were able to build a world-class
town center first and then attract residents
who want to be part of the live-work-play
atmosphere.”
Beyond that, Dart Realty likely will
continue to build out the residential por-
tion of the project, which includes plans
for single-family homes and a marina vil-
lage on the shores of the North Sound. All
told, its outlook for the next 10 to 15 years
is $1.3 billion in additional investment,
depending upon demand. All of this currently is envisioned as
pure equity investment, although leverage is always an option.
Looking beyond the Cayman Islands
The Dart family has a diverse portfolio of investments through
its family office, which invests in everything but real estate. On
the real estate side, outside of Camana Bay, the family contin-
ues to look at investments strategically, both in the Cayman
Islands and on other islands in the Caribbean. For example,
Dart Realty bought two mixed-use commercial buildings
totaling 13,000 square feet on Bay Street in the Bahamas in
2010, renovating them and leasing them out.
In targeting opportunities outside the Cayman Islands, Dart
Realty would look at a number of factors, including population,
desirability, air transportation, safety, stability of government
and the business climate, according to Doak. However, the big-
gest thing it looks at is the type of investment and the potential
return on that investment, she adds.
Return expectations vary by investment, but Dart Realty
generally is aiming for an unleveraged internal rate of return
of 10 percent or better. “Camana Bay aside, we continually
analyze our investments in terms whether to hold or dispose of
them based on return and how each fits into the overall port-
folio,” Doak says.
For example, Regatta Office Park – Dart Realty’s first acqui-
sition other than the lands it acquired from the Dart family
– was purchased in 2003 and has provided the firm with a good
return for more than 10 years. However, the submarket where
the 150,000-square-foot property is located is becoming more
competitive because the Cayman government built a new office
to house many of its agencies, thereby creating a large availabil-
ity of Class B+ office space. In addition, Regatta is competing
with the allure of Camana Bay.
Family affairs
Based on what has been publicized, it would seem that the Dart
family’s investments in real estate are limited to the Cayman
Islands and a couple of neighboring islands, but that is not the
case. “The Dart family has a global view
and long-term perspective on their invest-
ments and look for attractive real estate
opportunities,” Doak says.
Real estate investments outside the
Cayman Islands are made through vari-
ous other entities of the Dart Group and
typically consist of direct investments in
new developments or acquisitions of exist-
ing properties. Although it hasn’t done so
to date, the group also has the option to
invest through commingled funds and
continues to evaluate opportunities through such vehicles as
they arise, Doak says. The overall group, however, does not
disclose its total investment in real estate.
While the Dart family has been quiet about its real estate
investments elsewhere, it did draw attention for a few large land
deals it struck in Florida in recent years. In September 2011,
it paid $15 million for 5,600 acres of grazing land and orange
groves near Arcadia and, around the same time, it paid $20
million for 2,480 acres that the City of Sarasota had been using
to dispose of reclaimed water. The following April, it paid $37
million to acquire the Grand Cypress Orlando golf resort and
1,200 acres of nearby land. Plans for these large tracts of land
currently are unclear.
Still, the Dart family’s investments in the Cayman Islands
represent the heart and soul of its real estate portfolio, particu-
larly its investment in Camana Bay. In terms of replicating such
a project elsewhere, Dart Realty did evaluate another opportu-
nity on a smaller scale in the Bahamas roughly 20 years ago,
but it decided not to proceed for various reasons.
“There are a lot of factors that go into creating a town versus
an investment in a single property, such as replicating a team
on that island,” Doak says. “It is not out of the question, but we
have not found the right opportunity so far and therefore are
focusing our resources on Camana Bay.”
62 Forum Lane: EY and Cayman National Bank
are tenants
FAMILY OFFICES | DEVELOPMENT
52 PERE | JUN 2015