MARKET ANALYSIS - Maravilla Times

Transcription

MARKET ANALYSIS
Maravilla
Todos Santos, Baja California Sur, México
Prepared For:
Equity Directions, Inc. and
Desarrollos Todos Santos S.A. de C.V.
Prepared By:
Norton Consulting, Inc.
11380 Prosperity Farms Rd., Suite 210
Palm Beach Gardens, Florida 33410
Telephone: (561) 840-1990
November 2007
TABLE OF CONTENTS
INTRODUCTION ___________________________________________________________1
PROJECT DESCRIPTION ________________________________________________________2
Current Land Use Plan Elements _____________________________________________________________3
Site Attributes and Constraints_______________________________________________________________5
FINDINGS AND RECOMMENDATIONS _______________________________________9
Analysis and Product Recommendations ______________________________________________________11
Hotel Parcels #1 and #2 and Related Real Estate________________________________________________11
Enchantment and Sunset Hotels_____________________________________________________________14
Oceanview Hillside Villas _________________________________________________________________14
Oceanview Custom Homesites _____________________________________________________________16
Mountain/Valley and Golf View Custom Homesites ____________________________________________17
Valley Floor Products ____________________________________________________________________18
Target Markets__________________________________________________________________________19
Critical Success Factors ____________________________________________________________________19
FACTORS IMPACTING DEVELOPMENT POTENTIAL ______________________________22
Air Access _______________________________________________________________________________22
Passenger Arrival Trends__________________________________________________________________22
US Gateways for Baja California Sur ________________________________________________________23
Highway Improvements____________________________________________________________________24
Demographic Trends ______________________________________________________________________25
Demand Segment _________________________________________________________________________26
Second Home Market______________________________________________________________________27
Existing and Proposed Supply_______________________________________________________________28
Immediate Todos Santos Market Area________________________________________________________28
Migrino Golf Club _______________________________________________________________________28
Sol Pacifico ____________________________________________________________________________28
Cerritos Beach Resort and Spa _____________________________________________________________28
Agave Azul – Tequila Ranch _______________________________________________________________30
Punta Lobos ____________________________________________________________________________30
Cabo and La Paz Market___________________________________________________________________30
Cabo San Lucas - Tourist Corridor - San José del Cabo Area: _____________________________________39
San Jose del Cabo - Lower East Cape Corridor Area ____________________________________________40
Los Cabos East Cape Region_______________________________________________________________41
El Rincon ______________________________________________________________________________41
La Paz ________________________________________________________________________________42
APPENDIX________________________________________________________________43
Market Supply Tables ___________________________________________________________________43
Resort Community Characteristics _______________________________________________________42
Custom Home Lot Characteristics________________________________________________________43
Detached and Semi-attached Built-for-sale Characteristics __________________________________44
Selected Destinations Resorts with Hotel Related Residential________________________________45
Hotel Branded Villas and Condos ________________________________________________________46
Hotel Branded Luxury Residences _______________________________________________________47
Hotel Related Private Residence Clubs (Fractionals) _______________________________________48
Upscale Hotel Summary ________________________________________________________________49
Estimated Occupancy and Average Daily Rate for Selected Five Star Boutique Hotels__________50
Todos Santos Area Projects__________________________________________________________________51
General Project Description________________________________________________________________51
Lot Sales ______________________________________________________________________________52
Built-for-sale Products ____________________________________________________________________53
INTRODUCTION
Norton Consulting was retained by Equity Directions, Inc. to conduct a market study
concerning the development of a site approximately forty-five miles north of Cabo San Lucas
and forty-five miles south of La Paz in Baja California Sur, Mexico. The site is also
approximately two miles south of the charming Todos Santos. The site consists of
approximately 1150 acres (465 hectares). The client group is considering proceeding with
development of a premiere destination resort and residential project. The site is roughly
rectangular, with mountains sloping steeply upward on the north and south sides, bounded to
the west by the Pacific Ocean and to the east by Highway One. The site is very well buffered
from surrounding uses. The hillsides offer exceptional, sweeping ocean views and views to the
eastern mountains beyond the property boundary. The beach and beach access are also of
outstanding quality. Furthermore, additional land immediately adjacent to the north provides
the opportunity for either a small private marina or an area to anchor yachts and boats.
Norton Consulting was asked by the client group to assess site issues from a market
perspective, review access/airlift trends, summarize existing product and pricing trends in the
Baja California Sur region, and identify and profile selected benchmark projects in Baja
California Sur and elsewhere in Mexico and internationally that may provide perspective on
products, pricing and absorption, including luxury ocean-view resort real estate, resort hotels
and amenities. In addition, this report will provide refinements to suggested products, pricing
and absorption, and will create a preliminary gross revenue economic model that includes
logical phasing. The data contained in this report is based on market research that was
conducted in September and October of 2007.
This market study was prepared by Richard L. Norton of Norton Consulting, Inc. The firm
brings to this assignment more than 25 years of experience in resort consulting with particular
emphasis in Mexico, Costa Rica, Central America and the Caribbean. The firm has conducted
more than 15 resort destination studies in Mexico over the past two years. Norton Consulting
brings to this assignment an understanding of Mexico in context with other resort destinations
in Central America and the Caribbean.
Every reasonable effort has been made to ensure that the data contained in this study reflect
the most accurate and timely information possible as of the date the primary research was
collected. This study is based on estimates, assumptions, and other information developed by
Norton Consulting and from its independent research effort and general knowledge of the
industry. No responsibility is assumed for inaccuracies in reporting by its representatives or by
any other data source used in the preparation of this study. No warranty or representation is
made that any of the projected values or results contained in this study will be achieved.
Maravilla Market Analysis (November 2007)
1
PROJECT DESCRIPTION
The Maravilla project consists of approximately 1150 acres (465 hectares). The project is
comprised of two parcels within the joint venture between Equity Directions Inc and the
Arbelardo Rodriguez family. The Rodriguez Property (JV Property) is subject to a 99 year
Joint Venture which was executed in February 1988. The entitlements were approved for the
Equity Directions, Inc. parcel in December 2005. Permits are in place that allow for immediate
development in conjunction with obtaining the entitlements for the JV Property. Land use
(zoning) has been obtained for the entire 1150-acres. Fiber optic cables are in close proximity
to the site (highway). The joint venture is known as Desarrollos Todos Santos, S.A.
The property boundaries are displayed in the following aerial view.
2
Current Land Use Plan Elements
Current land uses are summarized in the following table and shown in the land use plan on the
next page.
Maravilla Land Use Summary
Re: Equity Directions, Inc.
Land Use
Orientation
# of
Keys /
Units
Average
Lot / Parcel
Size
Net Acres
Units /
Keys
Per Net Acre
Comments
Golf Partial Ocean
Golf Partial Ocean
40
85
4.5
14.2
8.8
6.0
Parcel 1
Obstructed Views
Marina Ocean
40
2.6
15.7
Parcel Name /
Sections
Hotel and
Related Residential
Hotel
Enchantment
Villas
Enchantment
Spa At Marina
170 Core Hotel keys
Hotel
Villas
Promontory
Promontory
Premium Ocean View
Premium Ocean View
90
85
6.7
12.0
13.4
7.1
Parcel 2
Stunning Views
Hotel
Villas
Palm Grove
Palm Grove
Palm Trees Wetlands
Palm Trees Wetlands
40
60
20.0
20.0
2.0
3.0
Parcel 2
Short Walk to Beach
Villas
Sunset Hotel
Sunset Hotel
ValleyPartial Ocean Views
ValleyPartial Ocean Views
0
325
4.0
15.0
0.0
21.7
Parcel 2
Valley
595 Hotel Related Villas
Residential Lots
A&D
B,C,F,L,N
E,M
G,H,I,J,K
P,Q,R,T
0,S
Premium Ocean View
Ocean View
Mountain View
Golf View
Golf View
Hacienda Style
28
88
53
86
54
6
0.5
0.5
0.4
0.4
1.0
3.0
2.0
2.0
2.5
2.5
1.0
0.3
Parcel 1
Parcel 1
Parcel 1
Parcel 1
Parcel 2
Parcel 2
315 Lots
Lot A
Lot B
Lot C
Lot D
Golf & Interior
Golf & Interior
Golf & Interior
Golf & Interior
22
63
40
80
4.5
20.1
4.5
20.1
4.8
3.1
8.8
4.0
Parcel 1
Parcel 1
Parcel 2
Parcel 2
205 Golf Villas
Golf Villas
Subtotal Keys
Subtotal Residential Units
Total
170
1115
1285
#DIV/0!
Saleable Ft2
1285
Amenites
Potential 30-slip marina
Two Beach Clubs
Spa and wellness
Fitness and Sports
18-hole signature golf course and clubhouse
Ecologically attractive sweet water wetland and palm oasis
Extensive linear feet of beach - excellent protected bay
Source: Equity Directions Source Documents
3
4
Site Attributes and Constraints
Maravilla’s location and site characteristics offer the developer excellent opportunities to
differentiate Maravilla in important ways from the fine resorts of Los Cabos. These differentiating
factors must be maximized via carefully considered land uses, precise phasing strategies, sharply
focused marketing, distinctive but indigenous product design, and perhaps most importantly,
reasonable pricing. These actions are likely to significantly reduce marketing risk for Maravilla.
The key locational and site factors that distinguish Maravilla from Los Cabos resorts are:
1) A truly oasis setting on an otherwise parched, extremely arid peninsula (Baja California
Sur);
2) The resultant natural vegetation, including a remarkable “forest” of saguaro cacti;
3) An arrival experience (assuming the new highway is built) that far surpasses the drive to
Los Cabos;
4) A spectacular, secluded beach, protected at each end by high hills and a rugged shoreline;
5) Topography which buffers the site from adjacent uses and provides superior residential
vistas;
6) The proximity of a potentially charming artist colony in Todos Santos; and
7) A region of Baja Sur which is relatively free of the poverty, and unspoiled by the graffiti,
trash and “unloved” properties found throughout Los Cabos.
5
The Oasis Setting – Without the introduction of water for irrigation of lush and colorful
landscaping, Los Cabos would be the same dusty scorched terrain it was a century ago. The
availability to Maravilla of water from natural sources is extraordinary and unique to this region.
Sophisticated U.S. buyers visiting the site will immediately recognize this difference, and will want
to see this precious natural resource setting preserved and used wisely as a cornerstone of the
environmental ethos of Maravilla.
Therefore, the developer must protect and celebrate the oasis nature of Maravilla by clustering
residential density nearby trees and plants that have thrived from these natural water sources, but
far enough away to completely preserve the natural oasis setting.
Existing Lush Vegetation - Notwithstanding the foregoing comments, Maravilla certainly should
also introduce additional irrigation water for golf and additional landscaping. Extreme care is
needed, however, so that the introduction of additional water (desalinization) for golf and other
uses is carefully monitored, so that it does not disturb another remarkable site attribute, the “forest”
of saguaro cacti.
The Arrival Experience – When the new highway is completed from north of the Los Cabos
airport straight across Baja Sur to near Todos Santos, the arrival experience into Maravilla will
immediately surpass the drive from the same airport into Los Cabos. The mountainous terrain, long
vistas and vegetation will only add to the sense of arrival at an exclusive, private resort compound
known as Maravilla. In the meantime, improvements to the existing highway between La Paz and
Cabo San Lucas will make the current drive less difficult and more enjoyable.
The Secluded, Pristine Beach – There are, of course, many wonderful beaches in resorts around
the world. This beach certainly is another. However, it is the secluded nature of this beach that
separates it from the miles of beaches that are found in Los Cabos. Its protected edges also allow
safe swimming and snorkeling
A Secluded, Visually Buffered Site – The topography of the site offers yet another advantage
compared to the “one-after-another-resort” feel of the drive through Los Cabos. Maravilla is and will
be an enclave unto itself, unspoiled by adjacent land uses.
6
Hillsides That Offer Superior Residential Development Opportunities – The location of the
hillsides near the ocean provide Maravilla with a rare opportunity to diversify product near the
ocean, while adding exceptional value and important density. These hillsides at the north and
south ends of the property provide spectacular development opportunities for luxury villa hill town
development.
A higher density village component at Maravilla will enhance product absorption and improve
project returns to investors.
The Proximity of Todos Santos – In terms of “urban” experiences, Los Cabos is known for the
“Margaritaville” college party atmosphere of Cabo San Lucas. Unlike the Cancun resorts with the
Mayan ruins relatively nearby, Los Cabos offers cultural or historical experiences for the resort
guest who wants a break from all that the resorts have to offer on site. Maravilla, on the other
hand, is only two miles south of Todos Santos, a unique village on the verge of becoming a
regional, if not national artists destination. The commitment of government funding for highway
construction so trucks can bypass the town will only accelerate the evolution of Todos Santos as
an artist colony destination. Fine art has proven to be a draw for the sophisticated real estate buyer
in many locales around the world. Todos Santos will be no different, and will thus offer a major
cultural alternative to the “party-only” atmosphere of Cabo San Lucas.
An Unspoiled Region of Baja California Sur – Even with massive improvements in Los Cabos
infrastructure, much of the area remains littered with trash, graffiti, broken down vehicles and
buildings that are unpainted or pealing. The Todos Santos region, in contrast, is mostly virgin
7
rolling hills, populated by vast saguaro forests as far as the visitor can see to the north, south and
east, and is bordered on the west by untouched beaches and coastline. Through careful
stewardship of its land, the developers of Maravilla can exploit the visual impact difference the
Maravilla site and surroundings provide in comparison to Los Cabos.
Project Constraints
Access from Los Cabos airport today is difficult, due to the travel time by car, the heavy traffic, road
construction and the resulting dangerous driving conditions between Cabo San Lucas and
Maravilla. As improvements to the existing highway from Cabo San Lucas to Todos Santos and
from La Paz to Todos Santos are completed over the next two years, the drive from the airports will
become safer and easier. However, the ultimate success of Maravilla will depend to a significant
degree on the timing of the completion of the new cross-peninsula highway from just north of the
Los Cabos airport. Also important, but less so, is the new airport under construction north of
Todos Santos for use by private jet aircraft. This latter facility will become more important once
Maravilla is mature. In the meantime, the much larger volume of potential buyers will arrive via the
Los Cabos airport and ground transportation from there to the site.
Availability of services is an important constraint to the pace of absorption at Maravilla. Services
needed for five-star quality but not presently available include:
1. U.S.-standard emergency medical care, including capability airlift of severe cases to the
U.S.;
2. state of the art internet access, telecommunications and business services;
3. water quality equal to or better than the desalinization plant service in the Los Cabos
market;
4. consistent and adequate power sources;
5. adequate skilled labor for construction; and
6. highly-trained, professional housekeeping, concierge, food and beverage, and
children’s adventure staff; and
7. availability of quality employee housing nearby.
Opening with and maintaining a consistently high level of service is the biggest challenge in
virtually every destination resort, even in populated areas where labor and training programs are
plentiful. It is an even bigger challenge in remote resorts. It is challenge that must be overcome if
Maravilla is to reach its quality goals.
Norton Consulting assumes that Maravilla is able to resolve issues regarding the availability and
cost of fresh and irrigation water, and concerning potentially unstable or compaction-resistant soils
(if any).
Maravilla plans to address the medical services constraint by partnering with a US based medical
university that may offer the following types of services:

Executive health screenings, employing cutting edge technology and comprehensive analyses.

Routine and emergency care for guests and residents. Living in a foreign country, many U.S.
citizens seek reassurance of having immediate access to U.S.-based health care.

“Aspen-like” institute offering educational and experiential health and wellness programs and
seminars for guests and residents. The concept of “edu-tainment” to respond to growing
interest of seniors for life-long learning opportunities. In addition to programs for residents and
8
hotel guests, the site could serve to bring in top minds in a variety of fields for “ think tank”
sessions that would foster knowledge exchange in a variety of fields.

Specialized care -- including plastic surgery, dermatological procedures, orthopedic surgery
and care (sports medicine), ophthalmology procedures, etc. – following which patients may
benefit from recuperating in a resort setting.

Showcase for introduction of cutting-edge technologies and practices. This may include recent
and evolving innovations (including imaging technologies, new procedures for colonoscopies,
and as they evolve, regenerative medicine.)
FINDINGS AND RECOMMENDATIONS
Norton Consulting presents the salient findings, analysis and recommendations from the study
process in the following paragraphs.
Site is World Class Quality
As previously mentioned, the Maravilla site has unique site attributes that are the foundation of a
world-class destination. The site also has important differentiating attributes within the Baja
California Sur market.
9
Suggested Refinements to the Land Use Plan
The current land use plan is top heavy with resort products and lots. We suggest:

Convert some of the hillside lot parcels into stunning built-for-sale products (like Villas del
Mar in Los Cabos but less scarring of the landscape).

Assume fewer resort fractionals (only Ritz Carlton has demonstrated success with this
product – let the hotel brand drive this decision!).

Create more branded whole-ownership resort products – larger private branded villas with
hotel services (like Rosewood and Viceroy products at Mayakoba and the Four Seasons
Private Residences at Punta Mita).

Develop two hotels (Not four!) – Hotel Site #1 (The Promontory) and Hotel site #2 (Palm
Grove Oasis) are a given. These two properties should be more than sufficient to support
real estate values, provide potential operator / investors with totally distinct environments /
site locations, and reduce the risk of long-term operating losses from hotel operations.
•
Both world-class hotel sites should have spa / wellness as a component.
•
World-class quality spa and wellness facilities and programs are more important
than golf in attracting future resort guests. The importance of the spa-wellness
component may influence the target list of hotel operators to include Spa-wellness
operators like Miraval and Canyon Ranch.

Maravilla is in the business of selling real estate. Consider resort products as a means to
enhance both real estate values and the pace of absorption.

The golf course remains very important regarding a real estate purchase. Select a
signature golf course architect. Along with the choice of hotel brands, the golf course
signature brand will support real estate values and absorption.
10
Analysis and Product Recommendations
Norton Consulting did not have the luxury of working with a land planner to revise the Maravilla
land use plan. Also, the focus of this analysis and recommendations are on the early phases of
Maravilla. The land plan must be flexible to accommodate changing future market conditions.
Consider the land use product recommendations as general guidelines and suggestions. Land use
issues will need to be further refined in concert with a land planning firm and the client group. The
detailed resort community benchmark tables upon which these recommendations are based are
found in the appendix to this report.
Hotel Parcels #1 and #2 and Related Real Estate
Hotel parcels #1 (Promontory) and #2 (Palm Grove Oasis) are key to creating future real estate
value at Maravilla. For the purpose of this analysis we are assuming that Maravilla is able to
attract internationally recognized brand hotels. We would also include on this list branded spawellness operators such as Canyon Ranch and Miraval. Examples brands include Rosewood,
Viceroy, Auberge, Four Seasons, Ritz Carlton, St. Regis, Aman, Banyan Tree, Raffles, Orient
Express, Mandarin Oriental, Regent and Setai, and are profiled in the appendix to this report.
Regarding Hotel branded real estate, we recommend two types of villa products:
1) Branded Luxury Residences (larger private units similar to Rosewood branded residences
at Mayakoba and Four Seasons private residences at Punta Mita).
2) Branded Private Residence Club (smaller units – operated as either a fractional or as a
whole-ownership units in an optional hotel rental program).
For Hotel #1 (Promontory) we have converted the villa product to upscale luxury units and
decreased the unit count from 85 to 50. We are showing pricing and absorption for these hotel
branded luxury units consistent with, if not somewhat more conservative than the market
benchmarks.
Norton Consulting’s recommendations concerning the Hotel branded luxury residences are
summarized as follows:

To achieve the absorption and pricing, the hotel branded luxury villas must have exceptional
interior finishes and fixtures, infinity edge plunge pools with swim-up bars and Jacuzzis, large
vista indoor-outdoor spaces, preferably with telescoping retractable floor-to-ceiling windows,
outdoor fire pits and BBQ’s, landscaping of at least of the quality of the finer Los Cabos resorts,
etc.

Each villa should have unobstructed views of the ocean and floor of the resort. Site planning
should provide for access via golf cart only, leaving automobiles in tucked-away parking below
and allowing views to be enhanced without the need for large retaining walls. Butlers assigned
to individual units (when occupied, a la the One and Only at Palmilla) should be available at
any time to shuttle luggage, provide fresh fruit, deliver catered meals, etc.
Please note that the pricing and absorption recommendations shown below assume the resort is
fully developed and operational. Early in the life of the resort, sales should offer substantially lower
pricing, and the developer should not assume that absorption will be as brisk as indicated in the
following table.
11
Hotel Branded Luxury Residential
Re: Maravilla
Norton Consulting Refinements to Existing Plan
Predominant
Product Type
Location
Current Plan
Number
of Units
Density per
Gross Acre
Unit
Types
Bedrooms
Unit Size
Range Ft2
Range
$ Per Ft2
Highest
$ Per Ft2
Price
Range
Annual
Absorption
3.0 - 4.0
Detached Villas
3-5
3500 - 4500
$600
$750
$2.1 - $2.7M
10 - 15
4.0 - 5.0
Detached Villas
15
5
12
8
3&4
3&4
3&4
3&4
3175 - 4700
3175 - 4700
3650 - 4700
3650 - 4700
$600
$750
$800
$900
$700
$825
$850
$1,000
$2.2 - $2.8 M
$2.9 - $3.0 M
$3.0 - $3.45 M
$3.67 - $4.1 M
10 - 12
3
3
46
4
4
4,195
5,025
$1,000
$850
$1,035
$933
$4.1 M
$5.2 M
4
4,300
$850
$933
Maravilla Recommendations
Hotel # 1
Same
Model / Benchmark Projects
Punta Mita
Four Seasons Hillside Villas
Phase I (2004)
Phase II (2005)
Phase III (2006)
Phase IV (2007)
FS Private Villas Reserve
FS Private Villas Reserve
Mayakoba (Mayan Riviera)
Rosewood Collectors Villas
50
32
3.0 - 4.0
Detached Villas
$4.2 M
10 - 15
(10 in Phase 1)
Source: Norton Consulting, Inc. (November 2007)
12
For Hotel #2 (Palm Grove Oasis) we have taken into consideration the lower density preferences of
the upscale hotel market and have decreased the densities from 60 to 50 (the unit count will need
to be finalized with a land planner). We are showing pricing and absorption for these hotel
branded units consistent if not somewhat more conservative than the market benchmarks. With
the appropriate operator, these may be operated as a private residence club (fractional).
Also, the buyer of this type of unit could elect to place the unit in the hotel’s rental pool thus could
provide an additional incentive for purchase (coverage of some carrying costs through rental
income).
To facilitate rental, each unit should provide at least one lock-off. The lock-offs should be sized and
amenitized to the standard of a Ritz Carlton or Four Seasons one-bedroom suite. Site planning
should provide for access via golf cart only, leaving automobiles at the hotel concierge parking.
Butlers assigned to individual units (when occupied, a la the One and Only at Palmilla) will be
available at any time to shuttle luggage, provide fresh fruit, deliver catered meals, etc.
Hotel Branded Residential
Re: Maravilla
Predominant
Product Type
Location
Current Plan
Number
of Units
Density per
Gross Acre
Unit
Types
Bedrooms
Unit Size
Range Ft2
Range
$ Per Ft2
Highest
$ Per Ft2
Price
Range
Annual
Absorption
50
5.0 - 7.0
Bungalows
1,2 & 3
1250 - 2200
400 - $600
$750
$650K - 1.2 M
15 - 20
32
5.0 - 7.0
Bungalows
1 and 2
$500 - $600
$900
$625 K - $1.2 M
15 - 20
Maravilla Recommendations
Hotel # 2
Same
Compset Whole Ownership
Dominican Republic
Roco Ki - Westin Jungle Lux Bungalows
1250 - 1894
Simliar orientation - off the beach - wetland
Source: Norton Consulting, Inc; October 2007
13
Enchantment and Sunset Hotels
We recommend not developing hotels on these sites.
Because the Enchantment hotel site is located in a bottom of a hillside draw and does not have
exceptional views from natural grade, this may be a location where 3 or 4-story condominium
product could be developed at some future point in time. The height of the condominium would not
be a market or price deterrent for luxury hillside products because the hillside products are much
higher and views would not be impeded.
We recommend delaying the planning of this Enchantment site until the resort development is well
underway and actual market preferences have been established.
The Sunset Hotel site is another location that needs further analysis. Both the proposed condos
and hotel seem out-of-place at this location. We recommend delaying planning of this site until the
resort is well underway and actual market preferences have been established.
Oceanview Hillside Villas
The current Maravilla Land Use Plan does not take sufficient economic advantage of the stunning
hillside views. We suggest converting lot sections C,D,E,F & N to higher but tasteful density. The
product models would be similar to Las Casitas, Terrazas and Haciendas at Villas del Mar. These
would be built-for-sale products at top-end price points (for Maravilla). These units should be built
only from pre-sales, except for representative built and fully furnished models.
This product could become the signature residential experience for Maravilla.
We also suggest converting what is referred to as the Marina Spa units and what is referred to as
Hotel Site Alternative #2 into similar luxury built-for-sale casita / villa products.
These products may range in density from 4 to 7 units per net developable acre; the higher
densities on the Marina and the Hotel Site Alternative #2 and the lower density being on the
hillsides.
The overall pricing is about 60 percent of the Villas del Mar benchmark and similar to the Club
Villas at Querencia. Anticipated absorption for this product is 20 – 25 unit per year. These pricing
and absorption recommendations assume that an international hotel brand is in place and has
elevated the awareness and image of Maravilla.
On the following page, Norton Consulting’s recommendations concerning the Hotel branded luxury
residences are summarized.
To achieve the absorption and pricing, the Oceanview Hillside Villas must have exceptional interior
finishes and fixtures, infinity edge plunge pools with swim-up bars and Jacuzzis, large vista indooroutdoor spaces, preferably with telescoping retractable floor-to-ceiling windows, outdoor fire pits
and BBQ’s, landscaping of at least of the quality of the finer Los Cabos resorts, etc. Each villa
should have unobstructed views of the ocean and floor of the resort.
14
Marina and Oceanview Hillside Villas
Re: Maravilla
Predominant
Product Type
Location
Current Plan
Number
of Units
Density per
Gross Acre
Unit
Types
Hillside Villas / Casitas
Sections C,D,E,F,N
75 - 100
4.0
1 and 2 story
(Replace lots)
and Hotel #2 Site
30 - 40
Section B - Marina
16
121 - 156
Bedrooms
3-5
Unit Size
Range Ft2
Range
$ Per Ft2
Highest
$ Per Ft2
Price
Range
2750 - 4000
$500 to $600
$700
$1.4 - $2.0 M
Annual
Absorption
Villas - some duplex
20 - 25
7.0
Cascading Villas
Semi-attached
4 -5
3-5
3500 - 4500
$600 - 700
$750
$1.8 - $2.8 M
Villas del Mar
Las Casitas
63
1 and 2 story
Las Terrazas
14
Villas - some duplex
Las Entradas
26
Las Haciendas
Club Villas - Querencia
12
115
4.0 - 5.0
24
4.0 - 5.0
1 - story Villa
3-4
2200 - 4250
$745 - $900
$1,330
$2.5 - $4.1 M
3500 - 4000
$675 - $800
$980
$2.5 - $3.9 M
3000 - 3200
$767 - $900
$980
$2.3 - $3.1 M
4500 - 5300
$1000 - $1200
$1,400
$5.6 - $7.6 M
$400 - $500
$600
$1.7 - $2.1 M
3300 - 4200
25 - 35
20 - 25
15
Oceanview Custom Homesites
By creating some hillside villa development opportunities we have decreased the number of custom
homesites with direct ocean views. These remain stunning properties and because they are lots,
can be offered early in the development cycle as part of a founder’s program. We have priced these
lots similarly to Puerto Los Cabos and Querencia knowing that once the hotels and amenities are
built the lots will jump in price. Although we show the lot prices at super upscale Cabo communities
(El Dorado, Villas del Mar and Chileno Bay), we do not envision Maravilla achieving the Los Cabos
Super Upscale lot pricing (at least not early in the development cycle). Note that Norton
Consulting’s average lot price is below what is in the Maravilla proforma. We believe the shortfall
will be more than made-up with the addition of the higher density hillside villas.
We recommend creating a custom homebuilder program. Custom oceanview homes would include
a mix of 3-, 4- and 5-bedroom detached residences ranging from 4,000 to 10,000 ft.2 in 1.5 or two
stories, all direct ocean views. Oceanview custom homes would be developed relative to the other
product types within Maravilla. As such, these custom homes should be priced very aggressively,
and probably not offered prior to the end of the first operating year of the first resort hotel.
Ocean View Lots
Re: Maravilla
Number of
Lots
Orientation
Community Type
Maravilla - Current Plan
180
Direct Ocean View
Lot Size
Acres
0.4 - 1.0
Predominant
Lot Price Range
Highest Price
Annual
Absorption
$617K - $939 K
$1.5 Million
TBD
$1.0 Million
15 - 20
Benchmarks
See below
Average: 800,000
Norton Consulting Recommendations:
120
$350K to $800K
Average $525 K
Comp Set 1/
Super Upscale - Cabo
Planned Resort Communities - Cabo
Best Benchmark!
La Paz / Todos Santos
Direct Ocean / Most Have Golf
0.5 - 1.0
$3 to $5 Million
$6.5 Million
10 - 15
Villas del Mar, El Dorado, Chileno Bay
Direct Ocean / Most Have Golf
0.4 - 0.8
$250K - $975K
Average: $550K
1.3 Million
10 - 15
Puerto Los Cabos, Querencia and Punta Ballena
Direct Ocean / No Golf
0.25 - 0.5
$135K to $250K
$250K
20 - 30
Tequila Ranch; Pedregal La Paz
Norton Consulting Comments and Refinements:
1) Maravilla lot sizes are consistent with the market
2) Lot Pricing: Direct Ocean View lots are priced above the market - even in context with existing wel amenitzied communities in Cabo (Puerto Los Cabos, Querencia and Punta Ballena
3) Recommend decreasing OceanView lots from 191 to 118 and creating a upscale villa parcel in some of the lot areas - similar to Villas del Mar.
4) Recommend converting lot sections: C,D,E,F & N to hillside villas - built-for-sale product - little higher density.
1/ See Custom Home Lot Characteristics in the Appendix
16
Mountain/Valley and Golf View Custom Homesites
Although not ocean view, these lots command better than average views. The coastal mountains
and valley landscape are very impressive. These custom home lots represent an early price-point
buy and later, a trade-up opportunity. We recommend decreasing the average size of these lots
(slightly). The pricing is similar to similar to interior “view” lots at Puerto Los Cabos and Querencia.
These areas may need to be studied further with regard to increasing yield but not sacrificing
lifestyle and a “reasonable” entry level price point.
The following table reviews our recommendations:
Mountain, Golf & Interior View Lots
Re: Maravilla
Number
of Lots
Community Type
Maravilla - Current Plan
SubTotal
Norton Consulting Recommendations:
Orientation
Lot Size
Acres
Predominant
Lot Price Range
Highest Price
Annual
Absorption Benchmarks
181
Gof / Interior
0.4 - 0.5
$250K - $500 K
$500 K
38
Golf / Interior
3.0
$385 - $431 K
$431 K
TBD
$150K to $250K
$275 K
20 - 25
See below
219
220
0.3 - 0.5
Average $200 K
Planned Resort Communities - Cabo
Best Comp
La Paz / Todos Santos
Golf / Interior
0.4 - 0.8
$75K - $200K
$250 K
20 - 30
Puerto Los Cabos and Querencia
Interior
0.25 - 0.5
Less than $75 K
NA
20 - 30
Tequila Ranch; Pedregal La Paz
Norton Consulting Comments and Refinements:
1) Maravilla interior golf view lot sizes are consistent with the market
2) Lot Pricing: Golf / Interior View lots are priced above the market - even in context with existing well amenitzied communities in Cabo (Puerto Los Cabos and Querencia)
3) Recommend decreasing Golf / Interior view lots from 219 to 150 and creating some built for-sale-villas pad - low denisty but BFS products.
1/ See Custom Home Lot Characteristics in the Appendix
17
Valley Floor Products
Except in proximity to the golf clubhouse, the valley floor golf condos do not appear to be consistent
with the upscale nature of this development. The challenge is that much of the gross revenue in the
proforma is generated from selling these valley floor golf condos as fractionals. We do not like this
strategy for the valley floor products and believe that it runs the risk of endangering the values of the
overall development.
Here are some preliminary product ideas for future phases that may need to be fleshed out in
greater detail with the land planning consultant and the client team.
Ecological Clusters. Assuming that any issues with the federal zone can be overcome, these
could be designed as a combination of one-, two- and three-story structures, located near but out of
the wetlands areas of the palm forest near the ocean. The design of these units should maximize
indoor-outdoor connections, to give the feeling of living in the tree canopy and experiencing its
special brand of wildlife. Ecological Cluster units should be sized to be about 25% smaller than
Oceanview Hillside villas, and priced significantly lower as well. This product will thus offer an
important diversification of price points for early buyers. The Ecological Cluster project should be
separately amenitized within its own enclave, including pool, Jacuzzi and perhaps even tennis,
provided that the latter activity is sited to minimize noise and light pollution.
Golf Villas (in proximity to the clubhouse) should include three to five bedrooms and range in size
from 2,200 to 3,000 ft.2. If Maravilla is to distinguish itself from other resorts in BCS, residential
development along the golf course must not be visible to the golfer or detract from the golf
experience in any way. Therefore, the developer should expect the number of Golf Villa sites (and
units) to be far fewer than might typically be found on a high-end resort course in the U.S.
Maravilla Haciendas, if properly sited and programmed, could be the most elegant of all the
Maravilla residential products. With the emphasis again on ecological excellence rather than density,
Maravilla Haciendas could be located adjacent to wetlands and other permanent open space on 1-2
acre homesites, so that each hacienda feels far more spacious and private. The minimum hacienda
scope might include four to six bedrooms, a servants’ quarters, and a detached a guest house, for a
total residential buildout of not less than 5,000 ft.2, but not more than 9,000 ft.2, on a site of not less
than two acres. The Maravilla Haciendas are likely to be few in number, should be priced very
aggressively, and sold over the life of the project rather that in an initial offering.
18
Target Markets
•
•
Target Audiences Resort
–
North American (fairly broad geographic distribution with California of most import)
–
Active lifestyle, experience seekers, looking for authenticity (primarily investororiented).
Target Audiences Residential
–
North American upscale households desiring a retirement or second home (35 to 65
year old age range).
Buyer motivations are two-fold: investment and use. Products that appeal most to investors are
branded hotel products and custom home lots. Conversely, products that appeal to users are
private villas and custom homes.
Ideally, Maravilla will have products early in the development cycle that appeal to both investor and
use motivations. We recommend discouraging pure speculators; those whose only desire is to flip a
property for profit within a short period of time. One method of discouraging speculators is prohibition
of re-sales of lots for 18-36 months unless a home is built on that lot. We do not recommend,
however, requiring construction of a home on the property within a certain timeframe. This latter
approach is very difficult to enforce and is objectionable to many potential buyers. Specific
restrictions may vary depending upon the parcel location and the market environment.
Critical Success Factors
Norton Consulting believes that Maravilla has the potential to generate sales prices for finished villas
and homes in the $400 to $800 per ft.2 range, with absorption of up to 50 – 75 units per year.
However, consistent with the foregoing comments, it is essential that Maravilla’s developers/owners
take action to address what Norton Consulting deems to be Critical Success Factors for Maravilla,
including the following:
1)
Undertake whatever measures are necessary to insure that all existing Maravilla landowners
are in complete agreement with regard to the master plan and the development and the
operation of Maravilla, so that the guest experience is “seamless.” Avoid any sense of
separate resorts or seemingly disconnected areas within the resort master plan or operation;
2)
Heavily promote the accelerated construction of the cross-peninsula highway from north of
the Los Cabos airport to just south of the property. When this highway is completed, the
improvement in the arrival experience for the Maravilla visitor will so positively significant that
it will be hard to quantify in comparison to the current arrival experience of driving for almost
two hours through the traffic and visual disruption of Los Cabos. The vastness and beauty (at
least after good rains) of the new arrival route will add to the sense of privacy and exclusivity
of Maravilla. Completion of this highway will cause an immediate acceleration of absorption
as well.
3)
Amenitize the individual for-sale properties with the finest-designed and constructed onsite
features and amenities;
4)
Recruit or retain (and compensate well) a small, highly professional sales team that is
experienced in the Los Cabos luxury market, and that also already has an exceptionally
19
strong “book of business” of wealthy American buyers, buyers who either have already
purchased in Los Cabos or are inclined to do so sometime in the next few years;
5)
Attract to Maravilla very early in the development process an internationally recognized hotel
operator that is committed to providing five-star service, along with an equally-prestigious
wellness and fitness resort operator such as Miraval or Canyon Ranch to operate a wellness,
fitness and spa facility for the benefit of both property owners and outside resort guests.
Locate the spa facility in an area of the property which offers exceptional ecological beauty,
and use that location to create a separate “node” or hub of activity separate from the beach
and other amenities, and yet still in reasonable proximity to the hotels.
6)
Create an elegant, but tasteful in scale entry into Maravilla from the highway. Design the
entry and its monumentation to set the tone, however subtly, of excellence in ecology,
service, master planning and land use;
7)
Create strong and diverse amenities early in the phasing of the project (e.g. kids
camp/pavilion, outstanding golf, spa and fitness, private underground wine lockers and
underground wine cellar;
8)
Create a very high quality concierge service which provides on request the following
services, sometimes for a modest fee-for-use just to cover costs and keep HOA dues to a
minimum:
9)
a.
comfortable on-call owner and guest transportation services between Maravilla and
Todos Santos, Cabo San Lucas and the Los Cabos airport, driven by bi-lingual,
concierge staff that is educated and knowledgeable about the history, current events
of interest and cultural heritage of Baja California Sur;
b.
booking of dinner and other special event and offsite recreational, fishing and touring
reservations;
c.
access to sailing, deep sea fishing and power boating via a negotiated access
agreement with Puerto Los Cabos or another marina;
d.
grocery and other convenience shopping including fresh flowers and fruit in the unit
each time an owner arrives (similar to One and Only hotel guests in Los Cabos);
e.
business office services including faxing, copying, receipt of packages, limited word
processing, etc.;
f.
arranging for housekeeping and catering services for all property owners, and
monitoring the quality of each on behalf of the owners and their guests; and
g.
other special services which owners and their guests may require from time to time,
especially those that normally would be available via the concierge at other very highend Los Cabos properties.
Demonstrate strong emphasis ecological preservation and enhancement, and highlight such
actions in marketing materials and newsletters;
10) Place emphasis on indigenous, very colorful, lush landscaping;
11) Take full advantage of the steep hillsides in site planning, so that the tasteful increased
density where every unit has spectacular views of the ocean and/or the mountains to the
east;
12) Limit individual offerings of each of the product types to twenty or less, allowing for
adjustments in price (hopefully upward) as the project progresses and gains momentum;
20
13) Do not assume that the exceptional price appreciation that has occurred during the last 4-5
years in Los Cabos will translate to equivalent prices at Maravilla. Maravilla is a to-bediscovered and to-be-proven location. Price early offerings lower to promote strong early
absorption and set the stage for subsequent, meaningful, periodic price increases;
14) Market the Maravilla value proposition heavily against Los Cabos, which may already be
significantly overpriced as a result of the remarkable explosion of Los Cabos luxury prices
during the last 3-4 years;
15) Watch closely all future competition from other top developers who may be creating a “better
mousetrap” for release next year or beyond, especially “in-bound” between Maravilla and
Cabo San Lucas; and
16) Consider affiliating Maravilla with other resorts in Mexico and the U.S., providing preferred
access to property owners at all affiliated resorts.
21
FACTORS IMPACTING DEVELOPMENT POTENTIAL
The following issues need to be understood in context with understanding development potential at
the subject property:

Access
o Air passenger arrivals and expansion of Gateway Cities
o Highway access from La Paz and Los Cabos international airports
North American Real Estate Outlook
Target Audiences for Upscale Real Estate
Los Cabos Historical Sales
Existing and Proposed Supply
o Todos Santos Coastal Land Use
o Los Cabos
Existing Project Inventory
Proposed Supply
Air Access
Passenger Arrival Trends
Los Cabos is among the fastest growing tourism destinations in the western hemisphere and is
easily outpacing Puerto Vallarta and Cancun in terms of annual growth rate.
International Air Passenger Arrival Comparisons
Annual Growth Rate 2000 to 2006
Re: Maravilla, Todos Santos
2001
2002
2003
2004
2005
2006
Annual
Growth
Rate
Mexico
Los Cabos
La Paz
Loreto
Puerto Vallarta
Cancun
568.5
9.3
18.6
792.7
2861.0
591.8
7.1
11.9
741.0
2849.4
625.6
6.4
14.7
732.8
3183.5
716.5
8.0
18.8
833.9
3782.3
991.9
10.5
22.9
1055.8
3560.7
1,064.0
9.0
23.8
1124.8
3597.5
13.4%
-0.7%
5.1%
7.3%
4.7%
Central America
Costa Rica
Panama
812.0
518.8
798.5
533.5
927.7
566.0
1,087.9
621.3
1,224.8
661.4
1,227.3
718.1
8.6%
6.7%
Caribbean
Punta Cana, DR
Turks & Caicos
US Virgin Islands
Jamaica
Aruba
Brit. Virgin Islands
Bahamas
Cayman Islands
911.0
165.8
609.6
1,276.5
691.4
295.6
1,522.9
334.1
956.2
155.0
598.0
1,266.4
642.6
275.0
1,402.9
302.8
1,295.8
164.1
618.7
1,350.3
641.9
270.7
1,428.6
293.5
1,344.9
173.1
666.0
1,414.8
728.2
304.5
1,450.0
259.9
1,475.3
170.7
697.0
1,478.7
732.5
334.5
1,514.5
167.8
1,720.9
248.3
671.3
1,678.9
694.3
356.2
1,276.3
267.2
13.6%
8.4%
1.9%
5.6%
0.1%
3.8%
-3.5%
-4.4%
Source: Caribbean Tourism Organization, ICT and SECTUR (June 2007)
22
US Gateways for Baja California Sur
Because Maravilla is halfway between Los Cabos and La Paz, both airports represent viable
gateways. Once the new road from the Los Cabos Airport to Todos Santos is completed, then drive
time from the principal gateway (Los Cabos) will become a minor issue. Los Cabos has ample air
access from every region of the US. La Paz has good connections to Los Angeles and is expected
to expand US gateways in the near future as planned projects in the Las Paz area generate
increased US passenger demand.
Flights To Los Cabos International Airport
# Direct
Weekly Flights
Carrier
Atlanta
7
Delta
Chicago
8
American
Dallas/ Ft. Worth
28
American
Denver
6
2
Frontier Airlines
United
Houston (IAH)
29
Continental
Los Angeles
19
6
14
6
American
Frontier Airlines
Alaska
Mexicana de Aviacion
Minneapolis
8
2
Northwest
Sun Country
Newark
7
Continental
Phoenix
17
US Airways
Sacramento
4
4
American
Frontier Airlines
Salt Lake City
5
Delta Airlines
San Diego
7
7
2
Aeromexico
Alaska
US Airways
San Francisco
7
3
Alaska Airlines
United
San Jose
4
Frontier Airlines
Seattle
7
Alaska Airlines
Total
209
Departure City
Flights To La Paz International Airport
# Direct
Weekly Flights
Carrier
Los Angeles
4
3
Delta
Alaska Airlines
Total
7
Departure City
Source: Official Airline Guide (2007) & Norton Consulting, Inc.
Source: Official Airline Guide (2007) & Norton Consulting, Inc.
23
Mexican National air passenger arrivals from within Mexico are good for both Los Cabos and La
Paz. La Paz is the capital of Baja California Sur.
All Air Passenger Arrival Comparisons
2001
2002
2003
2004
2005
2006
Growth
Rate
2001 - 2006
125.5
568.5
139.3
591.9
166.6
625.6
179.6
716.5
221.8
991.9
274.0
1,064.0
16.9%
13.4%
La Paz
National
International
203.6
9.3
190.9
7.1
191.9
6.4
200.3
8.0
203.5
10.5
202.7
9.0
-0.1%
-0.7%
Loreto
National
International
2.5
18.6
6.3
11.9
9.5
14.7
9.4
18.8
9.5
22.9
6.9
23.8
22.5%
5.1%
Los Cabos
National
International
1
Also includes charter passengers from national and international origins
Source: Sectur & Norton Consulting, Inc. (September 2007)
Highway Improvements
The improvements to the highway (four lanes) from La Paz to Todos Santos are about 50%
complete. Funding is in place for completion of the remaining stretch.
The expansion of the highway (two to four lanes) from Cabo San Lucas to Todos Santos is
underway. This stretch is expected to be completed within the next three years.
Over the near-term highway travelers will continue to experience disruptions. Once the highway is
completed the auto trip from Los Cabos will be equally as scenic but far less dangerous.
The highway initiative having the most potential impact on the future of Maravilla is the proposed toll
road from the international airport at San Jose del Cabo to Todos Santos. This will reduce auto
travel time from nearly two hours to 45 minutes. The development team needs to support all local
and regional efforts to expedite this highway.
24
Demographic Trends
The real estate boom in general and the rapid growth in second home properties have largely been
fueled by favorable demographics as well as favorable interest rates. The following chart shows the
percentage change in population by age segment over five year increments. The black areas show
the baby boomer trends, the gray area the sons and daughters of the baby boomers or “echo
boomers”.
GROWTH OF BABY BOOMERS AND THEIR KIDS
Age Group
1990
1995
2000
2005
2010
2015
2020
10-19
-2.2%
6.0%
6.0%
5.9%
-0.1%
-1.1%
3.0%
20-29
-5.7%
-8.9%
-1.8%
6.3%
6.5%
3.7%
-0.3%
30-39
10.8%
5.8%
-4.2%
-8.5%
-1.6%
5.0%
6.1%
40-49
22.0%
20.3%
10.4%
7.8%
-5.0%
-7.6%
-1.5%
50-59
-1.3%
13.4%
18.6%
24.5%
12.6%
5.4%
-4.9%
60-64
-2.6%
-5.5%
4.7%
22.2%
26.5%
13.9%
11.8%
65+
9.4%
8.2%
2.7%
5.3%
9.2%
15.7%
16.9%
Echo Boom
Baby Boom
Five year change in population by
age cohort
Source: US Census Bureau
Demographic factors:
Baby boomers hitting prime earning years
Passing away of WWII generation that is leaving behind substantial savings and assets to
their baby boom kids
The sons and daughters of Baby Boomers that are creating a demographic “echo” effect.
The implication for Maravilla is that demographic forces should support at least ten years of strong
demand opportunities with the caveat that US economy, capital market issues and world tensions do
not worsen significantly.
25
Demand Segment
A forward looking “Resort Demand” report prepared by American Lives, Inc identified the
expectations and needs of the “hot” demand segment for the 21st century resort. They concluded:
“Experience seeking is the leading edge of the resort market. Its vacationers are somewhat
younger, more active, and demanding. (They) comprise 35.2% of the total existing resort market,
however, they represent the greatest growth potential.”
Destination features that Experience Seekers are looking for:
Not high rises and commercial centers (they could be anywhere)

Natural locations over highly fabricated locations

Environmental conservation

Indigenous culture

Hiking trails – opportunities to explore both guided and non guided

Accommodations – cabanas and bungalows as opposed to conventional hotels
Destination experiences that Experience Seekers are looking for:
Nature (69%)

Personal and spiritual growth opportunities (65%)

Exotic locations (61%)

Active body sports (48%)
Experience seekers are highly interested in exploring “new” places, they like to do things with their
kids, and thus their resorts must be family friendly. They still like “creature” comforts and are willing
to pay for excellent service.
The core values of the planned developments for the Maravilla project are completely consistent with
the vacation expectations of this emerging US resort market demand segment.
26
Second Home Market
A second home is a discretionary purchase. The factors supporting second home purchase mainly
baby boomers in their prime, continued wealth transfer and low interest rates remain strong.
The problems in the housing market in the US have revolved around speculative purchases, subprime mortgages and a downturn in consumer confidence regarding real estate. Speculators are
now out of the market.
Despite the housing market and credit related problems in the US, demand for second homes
outside of the US remains relatively healthy. We are seeing price stability but a slow-down in overall
sales in coastal Mexico, the Caribbean and Central America.
Also, the resale of existing homes and lots has slowed down in Mexico as North American buyers
are not as active as past years.
Recent consumer surveys of the top two percent of wealthy Americans indicates that purchasing a
second or third home remains an important priority. The challenge in late 2007 is that wealthy
Americans do not feel a strong urgency to purchase that second home because there is so much
supply on the market in North America.
In contrast to North America, Los Cabos and to a lesser extent, Puerto Vallarta, have continued to
show strong sales. We are beginning to see some slow down in late 2007 – but nothing as dramatic
as what is occurring in the US.
Norton Consulting has tracked sales activity at the major planned resort communities in the Cabo
area since 1999. The following sales results do not reflect all of the Cabo market – just the major
planned resort communities. The estimated total value of whole-ownership transactions at the
existing planned resort communities in the Los Cabos area increased from $147 million in 2004 to
$421 million in 2005 to $611 million in 2006, representing an annual growth in sales volume of over
100 percent per year over the period 2004 to 2006.
Los Cabos Market - Real Estate Sales Trends
For Master Planned Communities - Los Cabos Area
Re: Punta Bella
Year
2002
2003
2004
2005
2006
Annual Growth Rate
2002 to 2006
2004 to 2006
2005 to 2006
Developer Sales in Planned Communities
All figures in (000s)
Condos /
Subtotal
Villas /
Homesites
Custom Homes
Apartments Developer
$9,014
$20,350
$15,005
$44,369
$11,964
$32,625
$16,566
$61,155
$14,710
$30,285
$32,157
$77,152
$223,185
$89,624
$31,385
$344,194
$201,428
$155,431
$160,424
$517,283
117.4%
270.0%
-9.7%
66.2%
126.5%
73.4%
80.8%
123.4%
411.1%
84.8%
158.9%
50.3%
Re-sales in Planned Communities
All figures in (000s)
Villas /
Condos /
Homesites Custom Homes Apartments
$6,655
$19,215
$1,200
$5,334
$21,300
$1,200
$7,255
$57,800
$4,900
$6,026
$65,395
$5,495
$23,657
$60,345
$10,000
37.3%
80.6%
292.6%
33.1%
2.2%
-7.7%
69.9%
42.9%
82.0%
Total
Sales
Subtotal
Re-sales
$27,070
$27,834
$69,955
$76,916
$94,002
$71,439
$88,989
$147,107
$421,110
$611,285
36.5%
15.9%
22.2%
71.0%
103.8%
45.2%
Source: PGR&D and Norton Consulting, Inc.
We expect a general slow-down in sales activity in the Los Cabos region in 2007 and 2008. The US
economy bears watching as it is expected by many to slip into a recession in 2008.
Although Norton Consulting has some short-term concerns regarding North American second-home
demand and for continued real estate sales growth in the Cabo region, we see demand for second
homes gradually rebounding as the North American buyer confidence improves over the next couple
of years.
27
Existing and Proposed Supply
An overriding variable within the recommendations of this report is the competitive position Maravilla
will actually achieve in a market place (Los Cabos Region) which has many choices today, and
which will have even more choices during Maravilla’s initial and sellout marketing periods. The
likelihood of an increase in future competition requires that the developers of Maravilla place
substantial emphasis on differentiating Maravilla in every way possible from other similar properties
in the marketing and sales process.
In the appendix to this report, Norton Consulting has documented the expected growth in new
projects in the Los Cabos region. Norton Consulting has identified upwards of 20 new projects at
some stage in the development cycle. Most of these projects are found in the region extending from
Cabo San Lucas north to East Cape on the Sea of Cortez.
Immediate Todos Santos Market Area
Within the immediate market area, extending from Rancho Migrino to Todos Santos, there are no
projects on the horizon which are likely to be directly competitive with Maravilla, except perhaps at
the low end of Maravilla’s price ranges. The following is a brief overview of the notable projects in
the Todos Santos area. A summary of Todos Santos area projects is provided in the appendix to
this report. A map key showing project locations is shown in the following page.
Migrino Golf Club
The future project with perhaps the greatest potential for competition is the Migrino Golf Club,
planned on property quite close to Cabo San Lucas. The Migrino site also provides excellence
beachfront opportunities. However, the Migrino project ultimately will be an inferior location to
Maravilla when the new cross-peninsula highway from the Los Cabos Airport to Todos Santos in
completed.
Sol Pacifico
Sol Pacifico is planned to be an oceanfront residential community of four, four-story buildings, each
with 14 units. Of the 56 total units 28 are pre-sold. The project is located at the south end of Playa
Cerritos, approximately ten miles south of Todos Santos. The developer is Tony Cordova. Prices
range from $470,000 to $1.5M, or in the range of $350 to $450 per ft.2. The units are being sold as
whole-ownership, and are being positioned as a higher-end gated residential offering not found
elsewhere between Los Cabos and Todos Santos. Unit sizes range from approximately 1,500 to
3,500 ft.2. Construction, which is to be partially financed via pre-sales, began in the summer of 2007
and scheduled for completion in the fall of 2008.
Cerritos Beach Resort and Spa
This project, being developed by Roger Polluck of Portland, OR, includes 3,000 linear feet of
beachfront on fifty acres on Playa Cerritos, just north of Sol Pacifico. The first phase on 12 acres and
is to include 165 keys, made up of fifty hotel units, 80 two- and three-bedroom bungalow villas and
85 one- to two-bedroom condominiums. Initial pricing and ground breaking are to occur in the next
month. There have been no units or fractions released to the market as of yet. No details of future
phases are yet available, except that a total of three hotels are planned. The first phase hotel is to be
managed “in-house.” There is some indication that the developer may be seeking Wall Street or
other institutional capital prior to embarking on a full development plan.
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Agave Azul – Tequila Ranch
Located just north of Playa Cerritos and the Cerritos Resort and Spa project, Agave Azul, has been
carved out of the rustic lot area known as Tequila Ranch. Plans call for improved lot sales (40 lots),
14-unit condominium project and beach club. Roads in the Tequila Ranch area are, for the most
part, unpaved.
Punta Lobos
Located immediately south of the town of Todos Santos, Punta Lobos is a master-planned
community owned by the prominent Santa Ana family. Rorey King has been handling the marketing
and sales for the family. Punta Lobos is the most upscale of three communities planned on large
contiguous holdings of the Santa Ana family. EDSA and Arthur Hills/Forest are completing the
master plan, with submissions for master plan approvals expected prior to year-end 2007. Punta
Lobos will include more than 1,800 acres and will include a private 18-hole golf course.
This project bears watching. Although the site is not as dramatic as Maravilla, it has the potential to
be a first class beachfront community. The project is also an example of what not to do. Initial
phases of lot sales are being offered on the eastern of the highway – they are very unattractive.
Cabo Upscale Market
In the following paragraphs, Norton Consulting discusses current development activity in the Los
Cabos area of Baja California Sur, beginning with the more expensively priced resort communities. A
map showing the location of these profiled projects is found on the next page.
Los Cabos is a unique, charming and very vibrant real estate market located on a geographically
isolated “island” peninsula. It’s development, location and retail activity distinguish it significantly
from the other most notable Mexican resorts, Puerto Vallarta and Cancun. Los Cabos’ profile and
visibility in U.S. markets has accelerated in the last 4-5 years. Prices have almost doubled in less
than two years, and many wealthy Americans, along with lesser numbers of Canadians and
Mexicans, have purchased second/third/fourth homes in Los Cabos at prices in excess of $1,000 per
sq. ft. in the last twelve months.
The Los Cabos market has several projects that are underway as well as a number of planned and
proposed projects for the near future. The following pages provide a snapshot of existing and
planned Los Cabos developments that have direct or indirect bearing on Maravilla.
Villas de Mar
A key upside benchmark in assessing the market potential for Maravilla is the Villas del Mar
development. Villas del Mar is an impressive sub-development within the Palmilla Resort. It has
enjoyed extraordinary success both in terms of absorption and in setting new upside standards for
prices per ft.2, not just in the Los Cabos market but also in all of Mexico. The Villas del Mar
development benefits from beachfront property, eligibility of its buyers for membership in the Palmilla
27-hole golf club, access to a fine new beach club on the ocean, and access through and a strong
identity within the Palmilla Resort. Landscaping is lush, very colorful and very well maintained in a
beautiful setting. The site plan allows for excellent vistas when driving through the community.
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The Villas del Mar project encompasses 172 total residential units in six product types. Four of those
products are still being offered for sale: Las Terrazas, Las Casitas, Las Entradas and the Haciendas.
Of the 142 units that have been sold to date, approximately 20%, or 28 properties, are on the resale
market. Sales agents indicate that most of these resales represent move-up buyers within Villas del
Mar, but such an assertion has not been confirmed by hard data. Sales prices have been strong
since inception, but absorption has also increased substantially in the last few years. Nevertheless,
traffic appears to have slowed since late spring, somewhat more so than could be explained by
seasonal factors. Following is a summary of each remaining product type within Villas del Mar:
Las Terrazas – Sales of this two-story, 3- and 4-bedroom product began in 2004. Thirteen of the
fourteen have been sold at ft.2 prices from $800 to just under $1,000 for 3,500 to 4,000 ft.2 units
Las Casitas - Las Casitas have varying ocean views, range in size from 3,000 to 4,250 ft.2 and in
price from $800 to more than $1,300 per ft.2 in a few cases ($3.0M to $4.1M), with the higher prices
being achieved more recently. They offer 2, 3 and 4 bedroom floor plans in two-story detached units.
Much of the Casitas product has been on the market in excess of seven months.
Las Entradas – This single-story product provides limited ocean views with units 3,000 to 3,200 ft.2
and four bedrooms. Las Entradas have been selling from $800 to nearly $1,000 per ft.2, or $2.25M
to $3.12M. Twelve units have been developed thus far and all are sold. Fourteen more are planned
for the next phase.
Haciendas – The Haciendas product is closest in proximity to Maravilla of the various Villas del Mar
properties. These homes are larger (4,500 to 5,300 ft.2) and more expensive than the other del Mar
product types, ranging from $1,100 to $1,400 per ft.2 ($6.0M to $7.0M). Of the twelve in the current
phase eight have been sold. Most are under construction.
Custom Homesites - In addition to the above offerings, thirteen homesites above the Haciendas
were offered in mid-June (2007) to existing Villas del Mar owners. Within one week, nine were
under contract at prices ranging from $5.0M to $5.5M. They average just less than one acre. They
overlook the western phases of Villas del Mar and have magnificent ocean views.
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Espiritu - Espiritu is a new phase of development for Villas del Mar Development Company,
ultimately to include more than 100 units. Espiritu will have separate access off the Transpeninsular
Highway near the Palmilla Resort entrance, and therefore will not gain access through Palmilla.
Villas del Mar just released the first phase of Espiritu in mid-June to existing Villas del Mar owners
only. Eighteen Casitas are planned with 4-5 bedrooms, and eighteen Terrazas are also included in
this phase, providing 3-4 bedrooms. Both floor plans are slightly larger than those in the above
phases, and include several enhancements and changes suggested by earlier buyers.
In the first two weeks of sales activity, seven letters of intent have been signed, at prices from $6.2M
to $7M for the Casitas, and $3.9M to $5.0M for the Terrazas. Construction has begun on the first
phase of both unit types and on the entrance into Espiritu from the Transpeninsular Highway. The
first phase units are expected to be offered to the general public very soon.
El Dorado
El Dorado is another benchmark private club community representing the upper end of the market
and including 520 acres. A total of 212 residential units are planned, as follows:
• 41 ocean-front one-quarter to one-third acre homesites, all sold at prices of $8.0M to
$13.0M;
• 12 ocean-front 5,000 ft.2 villas, all sold at an average of $8.5M or $1,700 per building ft.2;
• 26 ocean-view homesites, 21 sold at an average price of $6.1M;
• 82 4,000 ft.2 ocean-view villas, of which 26 have been released and 22 sold, at $3.3M to
$5.0M or an average per ft.2 price of just less than $1,300;
• 36 attached casita/condominium units (see below); and
• 15 mountainside custom lots with ocean views.
At present approximately 50 additional homesites are planned on the north side of the highway.
However, El Dorado literature indicates that the Transpeninsular Highway may be relocated to the
north of the El Dorado golf course at some point in the future, likely resulting in a significant
increase in residential units to be developed within the resort community.
Other amenities include a 45,000-ft.2 beach club, spa, and fitness facility and member locker
rooms, under construction and to be completed in late 2008. However, the lower level including two
pools, a restaurant and a bar will be open by the end of July 2007.
As a Discovery Land project, El Dorado has a substantial loyal following of qualified prospects that
have been purchased in other Discovery Land resorts in the U.S. Half of the 36 planned casitas
have been released, and 16 of those 18 have been sold in three model types, all flats, in three-story
buildings, nine units per building (4 twos, 4 fours and one penthouse in each building), summarized
as follows:
El Dorado Casitas (Three Stories)
A/C Unit Size (Ft.2)
# Bedrooms
Unit Count
Price Per Ft.2
Unit Price
Two
1,900
16
$1200 - $1300
$2.5 to $3.0 M
Four
4,000
16
$1200 - $1300
$5.0 to $5.5 M
Penthouses
7,700
4
$1950
$15 M
Total
36
Source: Norton Consulting, Inc.
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Chileno Bay
The entire project is 1,260 acres, also a private resort community, including 2.5 miles of coastline, a
portion of which is guarded by a natural reef that provides quiet water for snorkeling and swimming.
The master plan is programmed to contain 650 to 850 residential units at build-out, 36 holes of Fazio
private golf, two beach clubs, a 70 to 75-slip marina, and a luxury spa and wellness center and miles
of pedestrian and biking paths.
The developer (Jeld-Wen from Oregon is the managing partner) is relocating the Transpeninsular
Highway inland at its expense to pick up an additional 110 acres for future phase development
between the new Transpeninsular Highway alignment and the ocean.
We understand that Discovery Land is under contract or is close to entering into a contract to either
purchase the entire Chileno Bay project or enter into some form of joint venture as the managing
partner.
Phase One includes the following:
•
16 ocean-front homesites, of which 15 have sold for $8M - $10M;
•
11 two level villas on the point just east of the old hotel, 4,000 to 4,500 ft.2, 4-5 bedrooms, 7
have sold for $8M on the front row and for $5.25 M in the second row ($1,300 to $1,800 per ft.2);
•
37 ocean view haciendas, 29 sold at prices from $3.5M to $5.5M ($875 - $1,100 per ft.2), one
level with 4,500-5,500 ft.2 and 4-5 bedrooms on ½ to 1/3 acre lots including two master suites,
pool and spa, outdoor kitchen (optional), fire pit, and swim up bar.
Haciendas Cabo San Lucas
Hacienda Cabo San Lucas represents a relevant benchmark for Maravilla in terms of project scale,
scope and onsite amenities. Located on 22 acres of beachfront in Cabo San Lucas, it is a much
more urban setting than Maravilla, containing 16 Beachfront Villas (all sold) averaging 3,425 ft.2 with
another 945 ft.2 of outdoor space, and 93 in a several five-story buildings. The development team of
Koll, Del Mar and Starwood Capital brings strong credibility to this project. A 22-acre beachfront site
is complemented by a quarter-mile of swimmable beach, one of the best in Los Cabos. Proximity to
Cabo San Lucas nightlife differentiates Haciendas from other higher-end resorts in the Los Cabos
market, as does the higher density, concierge services and other elements of a luxury-hotel feel.
Of the total of 109 units in Phase One, 90% or approximately 98 are under contract. Site work for
Phase One is underway, with delivery of the finished units anticipated by the end of 2008 or early
2009. No decision has been made yet on the configuration or pricing for the remaining phase. No
resales are permitted until the sale of the unit under construction is closed.
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A summary of Beachfront Villas and Resort Residences is as follows:
# Bedrooms
A/C Unit Size (Ft.2)
Outdoor (Ft.2)
One
Two
Three
Four
Penthouses
Beachfront Villas
Total
890-1,170
1,750-1775
2,090-2,390
3,550 630-930
3,550 630-930
3,425 945
185-195
600-735
640-740
Unit Count
12
22
41
6
12
16
109
Pricing
See below.
Contract prices per ft.2 range from $775 to $1,460, and cluster in the $1,300 - $1,400 range. Unit
prices vary from a low of $726,000 for the one bedroom to $5M for the Beachfront Villas. Snell Real
Estate indicates that more than 95% of sales to date have been generated through the local
brokerage community rather than via independent leads of the third-party launch company.
Punta Ballena
Located three miles east of Cabo San Lucas, Maravillana’s private 174-acre project includes
Esperanza, an Auberge resort and spa, a residents beach club, two miles of walking paths, and
tennis. The master plan also contemplates a golf training facility with driving range, putting course
and chipping area and a cultural center. Maravillana offers three product types, as described below:
Las Residencias – The last six of 52 homesites have sold within the last several months at an
average price of $700,000. Six completed homes are listed for resale at an average price of $3.6M.
Las Residencias are 3,100 ft.2, and have sold over time at prices ranging from $1.6M to $2.6M, or
$515 to $840 per sq.ft. The Las Residencias were put on the market initially in 2001.
Las Villas include two product types, Las Arenas (oceanfront) and Las Conchas (behind the front
row). Of the nine oceanfront Las Arenas units, eight sold initially at an average price of $2.3M. The
developer recently increased the asking price on the remaining lot (including a build-to-suit home)
from $7M to $8.5M. Two additional Las Arenas homes are on the resale market for $6.3M and
$7.5M respectively, with one resale having just sold for $6.5M.
Of the 21 Las Conchas villas, only two remain unsold. Three have sold since early June 2007. Las
Conchas homes have four bedrooms, average 3,100 ft.2 and sold from $1.6M to $2.6M initially. Two
recent resales have achieved prices of $3.1M and $4.02M.
Las Estrellas are 54 condominium units in seven buildings of three- and four-story flats, located
adjacent to and up the hill from Las Villas. Three of the buildings housing 24 units are complete
(Buildings B, D and E). There are four unsold units left from the 24 units built in the first three
buildings. Building E was purchased in total by Exclusive Resorts.
The remaining four buildings are under construction. Building C is closest to being finished,
containing all four-bedroom units. This building has been on the market for more than four months
and there have been no sales thus far. Pricing is consistent with previously completed four-bedroom
units.
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Las Estellas units range in size from 2,950 ft.2 to 3,300 ft.2 and offer three or four bedrooms. Prices
have varied between $1.5M and $2.2M, or from $508 to $667 per ft.2. There is one resale in Building
D priced at $2.3M. A review of current listings shows that actual sales contract prices is from 12% to
18% below asking prices for the Las Estrellas units. There have not been significant price increases
in the Las Estrellas product in the last year. The sales team does anticipate some price increases in
Building B when completed, but modest in comparison to current pricing at other Los Cabos ocean
resorts.
Querencia
Querencia is a private community of 850 acres located to the north of the Transpeninsular Highway.
It opened in 2000. The development includes a private Fazio golf course, a Club Village at the top of
the property featuring a 30,000 ft.2 clubhouse with three dining facilities and a bar, men’s and
women’s spas, business center, 75’ lap pool, fitness center, kids pavilion, sports courts and tennis
courts.
Querencia has purchased an additional 900 acres which wrap around the existing property to the
north and west, abutting the Palmilla development to the west. The designer of the second golf
course should be announced soon, although there are no immediate plans to begin construction of
the second course.
Querencia has also purchased property across the Transpeninsular Highway on the beach, and
plans to open a phase-one private beach club (cabanas and limited F&B only) in the fall of 2007.
Future plans call swimming pools and other amenities, with access to the beach club via a tunnel
under the Transpeninsular Highway.
Querencia offers a number of product types. Las Cabanas are 14 condominiums adjacent to the
clubhouse providing 2,800 ft.2 of A/C space and another 700 ft.2 outdoors, four per building in twostory flat configurations. Sales started in 2006. Las Cabanas units are completed to the shell, so that
the buyer can choose specific finishes for the interior. Seven of the 14 are sold at prices ranging
from $1.2M to $1.55M, or $425 to $550 per ft.2.
Of a total of 39 Club Villas at Querencia, 25 have been released for sale and 22 have sold. Club
Villas are one level, single-family detached homes, either 3,300 ft.2 with three bedrooms and an
office or 4,200 ft.2 with a second story master bedroom upstairs. The former plan is priced at $2.05M
and the latter at $2.25M. The buyer chooses the building pad, then Querencia builds the home in
fourteen months. A second phase of Club Villas will be offered soon without the office in home
feature. They will overlook the bay and be priced at $2.0M. The timing and size of the second phase
offering is not known at this time.
Also available are developer and resale homesites from one-third to two acres in size, priced from
$700,000 to $2M and averaging $1.2M. A total of 112 lots have been developed to date, and 97
have sold.
Montage Resort/Vista Serena
Vista Serena is located between the master-planned resort of Cabo del Sol and the private resort of
the Chileno Bay Club, on a land parcel of approximately 1,300 acres and 2 kilometers of beachfront.
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With very successful locations in Laguna Beach and others on the way including Beverly Hills,
Montage Hotels and Resorts is well funded with very strong leadership. Montage is likely to
represent strong future competition at the higher end of the price spectrum in Las Cabos.
Construction on the first phase of the 1,300-acre parcel has just begun. The former Twin Dolphin
Hotel was converted to rubble in early July, and site work will begin soon on a new 130- to 150-key
luxury Montage Hotel. Montage will also be moving the Transpeninsular Highway about one-half
mile north to tie into the realignment currently under construction on the Chileno Bay property.
In addition to the Montage Hotel, the first phase of development will include a Fred Couples 18-hole
championship golf course and golf club, 109 private residences (detached villas) and a beach club
intended to be for the use of residents apart from hotel guests. The 109 residences will range in size
from 3,500 to 5,000 ft.2 and will be priced in the vicinity of $1,700 per ft.2, or from $5.9M to $8.5M.
Future phases are planned to include a second major high-end hotel.
Puerto Los Cabos
This relatively new player in the Los Cabos market includes 2,000 acres and three miles of beautiful
ocean frontage just east of San Jose del Cabo. FONATUR has contributed approximately 620 acres
of oceanfront property to the development, which also includes a 420-yacht marina under
construction, two golf courses (one private by Greg Norman and one resort course designed by
Nicklaus), and other amenities including retail, beach clubs and museums. Access at present is very
unattractive via commercial districts of San Jose del Cabo.
Lot prices with ocean views are listed presently between $750,000 to $1.6M. Interior views range in
price from $625,000 to $850,000. Most of these ocean view lots are slightly larger than one-half
acre. There is one oceanfront lot (0.8 acre) on the market for $6.2M.
Capella Pedregal
Capella Pedregal consists of 24 mountainside and oceanfront acres on the Pacific side of Cabo San
Lucas, with access via a privately owned 300-meter tunnel through the mountain that separates the
town of Cabo from the Pacific Ocean. The Capella name is new brand launched in October 2005 by
The West Paces Hotel Group, founded by Horst Schulze of Ritz-Carlton fame.
Amenities will include a 66-room luxury resort with a mix of guest rooms, suites, beach casitas, as
well as a 10,000-ft.2 mountaintop spa.
For sale residential products will include 31 units of one-eighth fractional ownership and 20 private
whole-ownership Capella Casonas. The Casonas will have mountainside panoramic views of the
Pacific, the Cabo Marina and Cabo San Lucas. Owners will enjoy all the services and amenities also
offered to hotel guests and fractional owners. The homes will include three and four bedrooms, with
3,000 ft.2 in A/C and another 750 ft.2 in outdoor patio, plunge pool, hot tub, outdoor fireplace/fire pit,
and outdoor food preparation and dining. The first eight private homes are expected to be complete
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on October 2007, and the Capella Resort and Spa and fractionals are scheduled for completion in
December.
Cabo San Lucas - Todos Santos Western Corridor Area:
This is the region that bears most watching for Maravilla.
Diamante Cabo San Lucas
The Diamante Cabo San Lucas development is in its earliest stage with a land extension of 1,680.32
acres and 1.24 miles of beachfront located along the Pacific Ocean coastline, west from Cabo San
Lucas, neighbor to Cabo Pacifica. Its developer is Ken Jaudi, a businessman from Connecticut, and
although no specific information has been released regarding their plans for development, its is
known that will include an 18-hole golf course, hotels and real estate inventory. This site was
acquired in January 2006.
San Cristobal Resort Project
Development is also in the earliest stage of on a parcel of 852.51 acres and 1.03 miles of
beachfront located along the western Cabo San Lucas shoreline, neighbor to Diamante Cabo San
Lucas. Albert Arthur Maes, a French businessman and developer, owns the project along with
different businesses including the Logan Hotels & Resorts group. This master-planned community
has plans to develop an 18-hole golf course, 4 to 5 resort hotels and a variety of real estate
products. Recent talks have been held with Hyatt, Mandarin Oriental and Logan Hotels & Resorts in
order to define their potential participation in this project. This site was acquired in July 2006.
El Ranch San Cristobal
This future master-planned community is a new venture by The Playa Grande-Solmar Group, one of
the most successful local time-share developers, on 864.87 acres including about 1.24 miles of
beach front along the Pacific Ocean coastline next to the San Cristobal Resort & Golf.
Plans for expansion include the construction of an 18-hole golf course along with two new timeshare resorts. Preliminary development plans include a clubhouse, spa and high-end residences.
They also plan to sell homesites.
Demasias de San Cristobal Project
The 371-acre site is currently owned by a development firm from Mexico City. With one mile
beachfront, the preliminary master plan includes: 300 residential home sites, 300 hotel rooms, 300
condominium units, a beach club, green areas and a "desert park". However, current talks with the
Spanish development firm The Excellence Group could greatly modify the master plan's layout.
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Cabo Callisto
This project has been conceived by a European developer. It includes with a territorial extension of
622 acres and approximately one mile of beachfront along the Pacific Ocean coastline. Development
plans include either the construction of a couple of I8-hole golf courses or a single 27-hole golf
course to be designed by Palmer, Player or Greg Norman. One or two hotels are projected to be
developed along with 150 to 200, 1-acre to 1.2-acre "ranchitos" estates. Likewise, residential
communities are being considered along with a small private marina. This parcel is adjacent to the
northwest of the Demasias de San Cristobal parcel.
Cala de Ulloa
Cala de Ulloa is a 617.74-acre resort development with 1.37 miles of oceanfront that will include a
luxurious boutique hotel, a championship golf course and real estate inventory. These developers
are of Mexican origin with previous experience in Los Cabos.
Although the town of Todos Santos is located in the Municipality of La Paz, it is more directly linked
to Los Cabos due to its proximity and tourism orientation.
Cabo San Lucas - Tourist Corridor - San José del Cabo Area:
Cabo San Lucas Bay Project
Even though some squatters occupied this site since December 2005, it is most likely they will settle
this situation and fully recover this property throughout 2007, a 271-acre parcel with 1.24 miles (2
kms.) of beach front along the Cabo San Lucas Bay, next to the Cabo San Lucas city limits. The
legal owners have, among other businesses, a strong commercial and resort development firm
based in Mexico City. Preliminary plans for development include the construction of an I8-hole golf
course, a high-end hotel facility and diverse real estate products.
El Tule Development Project
A 705.5-acre ocean view parcel (285.52 hectares) was recently (2006) acquired by Los Cabos
Patrimonio, S.A. de C.Y. a local development firm with headquarters in the Mexican State of Colima.
Los Cabos Patrimonio specializes in middle-income oriented housing projects and before the
acquisition of the parcel above, they took over the Las Villas del Tezal and La Cima housing
developments and are about to break ground in a third venture called Punta Vista.
Since all of the above are middle-income oriented housing projects it may be possible that the
upcoming project for El Tule parcel may be oriented to a higher income target market.
The site is located halfway between Cabo San Lucas and San Jose del Cabo (Transpeninsular
Highway km. 17.5).
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El Tule Development Project 2
A l,497-acre parcel adjacent to the Hacienda Santa Cruz site was purchased by a Mexican
businessman in 2006. The purchasing party, Mr. Copel has a network of "budget" department stores
nationwide. Although its oceanfront is limited, just 16.31 acres with approximately over a 1,000 feet
of beach frontage, it is expected to house high-end facilities.
The remaining land will include an 18-hole golf course, real estate developments and other
amenities.
Hacienda Santa Cruz
A 1,235.48-acre ocean view parcel was recently (2005-2006) acquired by a local development group
that originally came from the Pacific resort of Acapulco. The site is located as well in the El Tule
area, next to the El Tule Development Project 1.
According to one of its representatives the first phase of development was scheduled to break
ground in the first half of 2007 with 120 homes. The homes are expected to have 1,722 ft2 of airconditioned areas on 13,993.20 ft2 homesites. Presales have started from U.S.$295,000 Dollars. No
information was released regarding upcoming amenities, if any. Though, it's been confirmed they
have no plans to develop any golf courses.
San Jose del Cabo - Lower East Cape Corridor Area
This new 14-mile long (+-24-kilometer) "eastern" corridor is now under the process of development
with more forthcoming master-planned resorts, among them:
Punta Gorda Polo & Yacht Resort
Grupo Questro, headed by Mr. Eduardo Sanchez Navarro (master developer of Cabo Real, the Club
Campestre San Jose and Puerto Los Cabos), and Grupo Desk, headed by Alejandro Senderos,
business partner with Sanchez Navarro in the Dreams Los Cabos Hotel (formerly Melia Los Cabos)
as well, have plans to develop a fourth master planned community between Puerto Los Cabos and
the Punta Gorda area.
In a preliminary account, the master plan is projected to include an exclusive boutique hotel, a Jack
Nicklaus 18-hole golf course, golf clubhouse, polo fields, stables, 100-slip private marina, tennis
courts , golf, marina and waterfront condominiums, commercial area, beach club, and ocean view,
ocean front and golf residential home sites.
Even though there are several land issues that the Questro Group has to settle, 2007 is the year
when preliminary research is about to begin in order to define the type of real estate products to be
developed.
Mayan Resorts Los Cabos
Mayan Resorts, one of the most successful Mexican time-share and resort developers with presence
in Cancun, Acapulco, Puerto Vallarta, Nuevo Vallarta, Mazatlan, Puerto Penasco and now Los
Cabos, purchased the Fonatur public golf course in San Jose del Cabo and the last remaining hotel
site in the Fonatur Hotel Zone in April 2004, and more recently a 912-acre parcel with 0.62 miles of
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beachfront, in the region known as EI Zacaton. On-going negotiations are in progress for the
purchase of additional acreage along with the beachfront.
The preliminary master plan includes two 18-hole golf courses, a golf club and lodging facilities to
operate under the time-share concept. No further information has been released yet since a more
detailed master plan stilI is under planning.
Los Cabos East Cape Region
Vispera
The New York City-based Vesta Group purchased a 42.5-acre site in 2003, with a 984.3 linear feet
beach frontage, located between the El Rincon and Las Barracas areas. Plans for development
include a luxury boutique hotel to be owned and operated by Solage Hotels & Resorts, a new brand
from Auberge Resorts, headed by the Auberge partner Tim Hannon and chief executive for Solage.
Preliminary information indicates that the hotel will be complemented with a high-end residence club
that will offer fractional ownership real estate.
Los Frailes Bay / Boca del Salado Project
Steve Bergman, an architect from Santa Barbara, California purchased a 528.8-acre parcel, with
2.17 miles of beach frontage in the East Cape Region, between the Los Frailes Bay and Boca del
Salado areas in 2005. Preliminary information indicates that its master plan includes a luxury hotel,
residential real estate, homes and large estate home sites,
El Rincon
This project encompasses a 3,892-acre site with 4.4 miles of beach frontage and is to be located 45
miles (72.42 kms.) to the northeast of the Los Cabos International Airport.
El Rincon has a preliminary site development plan with an overall design that includes estates and
ranches, single-family homes and villa clusters, golf club, marina lagoon, boutique hotels and spas,
a village, and a regional cultural and performing arts center.
La Ribera Local “Ejido” Project
Mr. Mariano Mariscal Barroso, head of the Mexican development firm Grupo Mar, purchased a
444.8-acre parcel with a 2-mile plus beach frontage, next to the town of La Ribera in February 2006.
Mr. Mariscal was the original mastermind to develop a marina in San Jose del Cabo and the
developer of Lighthouse Point Estates, its first 275-acre community in Punta Arena, in the East Cape
Region. It is expected that preliminary information of its master plan will be released in the first half
of 2007.
41
La Paz
Paraiso del Mar
Currently under development and located in an area known as "El Mogote", right across the La Paz
Bay is Paraiso del Mar. On a parcel of 1,702 acres and nearly 6 miles of beachfront, the master
plan includes three 18-hole golf courses (the first an Arthur Hill design), a country club, a 500-slip
marina, green areas, swimming pools, residential areas, private condominiums, homes, commercial
areas, golf, Tennis, beach and sports clubs, and Spa.
Costa Baja Resort & Marina
This 750-acre master-planned community is well under development in the City of La Paz urban
area with Phase I already near completion. Phase I - The Marina District - is comprised of the Fiesta
Inn, Condos de Playa, Villas de Playa, Pueblo Marinero Condos and the marina village.
Development of Phase II - The Coastal Riviera - is underway. The Vista Mar Residences, The Costa
Baja Golf Club with a Gary Player designed golf course, Costa Baja Beach Club and Espiritu Spa
will be part of this phase as well.
This community is an enterprise of the Parque Reforma development firm, a major real estate
development company in Mexico founded in 1979, with ongoing projects in Mexico City, Acapulco
and Acapulco Diamante.
Since beginning sales in 2003, this 300-hectare project on the waterfront three miles north of
downtown La Paz has realized good success, in spite of a rather mediocre-quality Fiesta Inn (which
has since been upgraded). Heavy investment in a 250-slip marina, sitework, landscaping and builtfor-sale product has aided the pace of absorption. Groundbreaking is set for late November of the
Gary Player-designed championship golf course on the hills overlooking the marina. The developer
plans to design and build homes for sale along the golf fairways. Those homes have not yet been
designed or priced.
The most successful product to date is VistaMar, a villa project adjacent to the marina. Ranging in
price from $500,000 to $1.0M, these units continue to sell in an otherwise slowing market, with 22
closings since June of 2007. A new offering known as Las Colinas is about to begin on the hills
overlooking Vista Mar. Although no marketing materials are yet available and the product is not
officially released, two have pre-sold in the last week. Prices will range from $300,000 to $500,000.
Also planned for opening in late November are a beach club and an amphitheatre facility. Generally
speaking, Costa Baja is experiencing some slowdown in demand from U.S. buyers except from
those located in the Seattle and Vancouver, BC markets.
Bahia de Los Suenos
Bahia de los Suenos is currently under development – and in the process of re-master planning – is
located in the Los Planes neighborhood, one hour south of the State Capital of La Paz. On a parcel
containing more than 4,000 acres and 6.6 miles of beach front, the project will include residential
home sites, private homes, villas and condominiums, 600 estate high-end lots, The Giggling Marlin
beach club (open), 25 private bays, an 18 hole Golf Course under design by Tom Doaks, golf cart
community, and ocean & golf course view properties. Nearby is a 5,000 ft. long paved runway for
medium size aircraft
42
APPENDIX
Market Supply Tables
Resort Community Characteristics
Custom Home Lot Characteristics
Detached and Semi-attached Built-for-sale Characteristics
Selected Destinations Resorts with Hotel Related Residential
Hotel Branded Villas and Condos
Hotel Branded Luxury Residences
Hotel Related Private Residence Clubs (Fractionals)
Upscale Hotel Summary
Estimated Occupancy and Average Daily Rate for Selected Five Star Boutique
Hotels
Todos Santos Regional Projects
General Project Description
Lot Sales
Built-for-sale Products
43
Resort/Community Characteristics
`
Re: Maravilla
Resort Community Market Survey
Resort
Hotel
Brand
Peak
Season
Rates
Hotel
Units
Signature
Golf 1/
Sales
Began
# Resid.
Lots & Units Sold
/ Total Inventory
Acres
Hectares
Gross
Density
Custom
Home Lots
Detached
Built-For-Sale
Attached
Built-For-Sale
Average
Transaction
Value
Super Upscale - Los Cabos
Villas del Mar (Palmilla)
None
Includes Vllas, Casitas, Terrazas, Haciendas and Entradas
Next Phase El Espiritu +/- 100 units
One&Only
next Door
NA
Access to
Palmilla
Nicklaus
1999
142 / 172
NA
NA
5.5
5%
70%
25%
$5,000,000
El Dorado (Cabo Real)
( Discovery Land Compnay)
None
None
NA
Nicklaus
Signature
2005
115 / 212
520
210.5
0.41
39%
44%
17%
$6,250,000
Chileno Bay
(Just purchased by Discovery Land)
None
None
NA
Tom Fazio
Two Courses
2005
51 / 650 to 850
1,260
510.1
0.60
TBD
TBD
TBD
$6,500,000
Vista Serena / Montage
(Former Twin Dolphin)
Montage
Additional Hotel Planned
150 keys
TBD
Fred Couples
2008
TBD
1,300
526.3
TBD
TBD
TBD
TBD
Expect $5 million +
Capella At Pedregal
(Part of Pedregal)
Capella
66 keys
TBD
None
Yacht membership
23
9.3
3.6
0
45%
55%
$3,500,000
23-1300
890
776
9.3 - 526
360.3
314.1
0.4 - 5.0
2.10
2.53
0% -39%
5%
15%
0% - 70%
45%
53%
25% - 55%
25%
32%
$3.5 - $6.5 Million
$5,625,000
$5,313,000
Range:
Median:
Average:
66 - 150
2007
20 villas / 20 sold;
31 condos; 245 Fractions 1/8ths / 75 sold
1999 - 2008
2005
2005
Planned Resort Communities - Los Cabos
Puerto Los Cabos
tbd (4 potential)
TBD
N/A
Nicklaus/Norman
500 slip marina
2004
260 / 1500
2,000
809.7
0.8
75%
0%
25%
$750,000
Querencia
None
None
N/A
Fazio
2001
TBD / 159
840
340.1
TBD
TBD
TBD
TBD
$1,000,000
Palmilla
One & Only
172
$550 - $1,600
Nicklaus
1992
550 / 1300
905
366.4
1.4
33%
33%
33%
$1,800,000
Cabo del Sol
Sheraton
270
$300 - 1200
2; 2 future
1990
300 / 1400
1,800
728.7
0.8
70%
5%
25%
$850,000
Fiesta Americana
288
$329 - $735
Nicklaus/Weiskopf
$675-1,125
No
2000
102 / 300
Punta Ballena
Auberge
Range:
Median:
Average:
57
2/
66 - 150
1999 - 2000
2000
1997
174
70.4
1.7
20%
40%
40%
$2,500,000
174-1800
905
1,144
70 - 366
366.4
463.1
0.8 - 1.7
1.11
1.17
20% -75%
52%
50%
0% - 40%
19%
20%
25% - 40%
29%
31%
$750K-$2.5M
$1,000,000
$1,380,000
Planned Resort Communities - La Paz
Paraiso Del Mar
None
N/A
N/A
Art Hills
2004
551 / 4,000
1,700
688.3
2.4
10%
35%
45%
$425,000
Marina CostaBaja
Fiesta Inn
Looking to re-brand
120
$95 - $165
Gary Player (UC)
250 slip marina
2004
75 / 400
500
202.4
0.8
30%
15%
55%
$475,000
500-1700
1,100
1,100
202-688
445.4
445.4
0.8-2.4
1.58
1.58
10% -30%
20%
20%
15% - 35%
25%
25%
45% - 55%
50%
50%
$425K - $475
$450,000
$450,000
Range:
Median:
Average:
120
120
120
2004
2004
2004
1/ Signature Golf ON PROPERTY
Arthur Hills: Paraiso del Mar
Gary Player: Marina CostaBaja
Jack Nicklaus: Palmilla, Puerto Los Cabos, Cabo del Sol, Club Campestre San Jose & Punta Mita
Greg Norman: Puerto Los Cabos
Tom Weiskopf: Cabo del Sol
2/ 50 villas in fractional and club program added on a space available basis to Auberge inventory
Source: Norton Consulting, Inc. (October 2007)
44
Custom Home Lot Characteristics
Re: MARAVILLA
Characteristics of Selected BCS Resort Communities
Project
Golf Fairway
Year
Sales Began
# Lots
# Sold
Est'd Avg.
Ann.Abs.
2007
13
4
8
Lot Size (Acre)
Low
High
Interior View
Price Range
Low
High
Direct Oceanview
Price Range
Low
High
Direct Oceanfont
Price Range
Low
High
Comments
Super Upscale Los Cabos
Villas del Mar
Ridge lots above Haciendas
0.96
0.96
$5,000,000
$5,500,000
$3,000,000
$6,600,000
El Dorado
Ocean front lots
41
41
35
0.25
0.33
Ocean view lots
2005
26
21
14
0.25
0.33
Future Phase Mountain Lots
15
TBD
TBD
2004
16
15
15
0.75
1.00
2004 - 2007
$2,000,000
$13,000,000
$8,000,000
$10,000,000
Chileno Bay
Ocean front lots
Range
13-41
4 - 41
8 - 35
0.25-0.96
0.33-1.00
$3.0M - $5.0M
$5.5M - $6.6M
$2.0M - $8.0M
$10M - $13M
Median
16
18
15
0.50
0.65
$4,000,000
$6,050,000
$5,000,000
$11,500,000
Average
22
20
18
0.55
0.66
$4,000,000
$6,050,000
$5,000,000
$11,500,000
Selected Planned Resort Communities Los Cabos
Puerto Los Cabos
La Noria
2003
50
50
18
0.21
0.40
$75,000
$150,000
$200,000
$250,000
na
na
Fundadores
2003
230
218
52
0.60
1.12
na
na
$250,000
$975,000
$2,400,000
$3,000,000
El Altillo
2004
78
47
15
0.49
0.83
$150,000
$175,000
$200,000
$600,000
na
na
2001
112
106
40
0.50
1.25
$150,000
$175,000
$300,000
$1,200,000
2000
52
52
26
0.32
0.45
$600,000
$1,300,000
$2,000,000
$2,400,000
2000 - 2005
$2.4M - $3M
Querencia
SFR Homesites
Punta Ballena
Las Residencias
50-230
47-218
18-52
0.21-0.60
0.4-2.00
$200k - $600k
$250K - $1.3M
$2.0M - $2.4M
Median
Range
78
52
26
0.49
0.83
$250,000
$975,000
$3,700,000
$2,700,000
Average
104
95
30
0.42
0.81
$310,000
$865,000
$4,066,667
$2,700,000
56
40
40
0.25
0.50
$125,000
$165,000
$225,000
$350,000
Lot Community - Todos Santos
Agave Azul / Tequila Ranch
La Paz Area
Pedregal
2006
$95.5 k
2003
48
39
9
0.25
0.3
$143,000
$250,000
2000 - 2005
48 -56
39-40
9 - 40
0.25
0.3-0.5
$135k - $600k
$165K - $250k
$225k
$350k
Median
52
40
25
0.25
0.40
$134,000
$207,500
$225,000
$350,000
Average
52
40
25
0.25
0.40
$134,000
$207,500
$225,000
$350,000
Range
na
$200 k
na
Phase 1
45
Detached and Semi-attached Built-For-Sale Product Characteristics
Re: Maravilla
A/C Space Only
Community
Sales
Commenced Unit Type
Unit
Config.
No.
Orientation Units
No.
Sold
Est.Avg.
Ann.Abs.
Unit Sizes (Ft2)
Low
High
Unit Prices
Low
High
Prices Per Ft2
Low
High
Comments
Villas del Mar
Totals: 172 planned, 142 sold with 20% on resale market.
Las Casitas
2003
2-story
2, 3, & 4 BR
Ocean View
63
42
10
2,200
4,250
$2,500,000
$4,125,000
$745
$1,330
7 months on market
Las Terrazas
2004
2-story
3 & 4 BR
Ocean View
14
13
5
3,500
4,000
$2,550,000
$3,950,000
$675
$980
Las Entradas
2005
1 Story
4 / 4.5
Ocean View
26
12
8
3,000
3,200
$2,300,000
$3,125,000
$767
$980
Las Haciendas
2005
2-story
5 /5
Ocean View
12
8
4
4,500
5,300
$5,600,000
$7,000,000
$1,100
$1,400
Las Casitas
2007
2-story
4-5 BR
Ocean View
18
4
4,500
$6,200,000
$7,000,000
$1,375
$1,550
Del Mar Devt broke ground in Sept 07 on entrance and Espiritu Club.
2007
2-story
3-4 BR
Ocean View
18
3
Pre-cnstrtn
Pre-cnstrtn
2,500
Las Terrazas
3,900
4,500
$3,900,000
Asking
$5,000,000
Asking
$1,000
$1,500
Seven units reserved in one week.
Oceanfront Villas
2006
1 & 2-story
4-5 BR
Ocean Front
12
12
12
Oceanview Villas
2006
1 & 2-story
3,4 BR
Ocean View
82
22
22
Two Story Villas
2006
Two level
Duplex, Triplex
3,4 BR
Ocean View
26
22
Point Villas
2007
1 & 2-story
4&5
Ocean Front
11
7
Haciendas
2007
1 Story
4&5
Ocean View
37
29
2008
1 story
3,4 BR
Ocean View
109
TBD
2006
1-2 story
3,4 BR
Ocean View
20
20
2006
1 & 2-story
3,4 BR
Ocean Front
16
16
11 - 109
3 - 42
19
33
13
16
24
TBD
12 existing, 14 next phase
Espiritu del Mar
El Dorado
5,000
$3,500,000
$8,500,000
$1,700
2005-6 avg closed price = $5.6M
2,500
4,000
$3,300,000
$5,000,000
$1,250
$1,320
Total of 82 to be offered, released only 26 so far .
3,600
5,500
$3,600,000
$6,600,000
$1,000
$2,000
90 total, 26 released , 8 of 9 on ocean. Median price = $1,200/sq.ft.
7
4,000
4,500
$5,250,000
$8,000,000
$1,300
$1,800
Sold units to be delivered in fall of '08.
29
4,000
5,000
$3,500,000
$5,500,000
$875
$1,100
On upper tier above Point Villas.
Pre-cnstrtn
3,500
5,000
$5,250,000
Asking
$8,000,000
Asking
$1,500
$2,000
Some beachfront, amount TBD. Ave. price/ft.2 overall = $1,700.
20
3,000
3,000
$3,300,000
$3,900,000
$1,100
$1,300
3,425
3,425
$4,100,000
$5,500,000
$1,200
$1,460
4 - 29
2200-4500
3000-5500
$2.3M-$5.3M
$3.1M-$8.5M
$675-$1,500
$980-$2000
10
13
3,500
3,356
4,500
4,370
$3,550,000
$3,917,900
$5,500,000
$5,800,000
$1,100
$1,068
$1,430
$1,459
22
22
3,300
2,800
4,200
$1,700,000
$2,100,000
TBD
$400
$600
14 more to be released
Same as Phase I w/o office, overlooking bay.
21
19
5
3,100
3,100
$1,600,000
$3,000,000
$516
$968
Two units left. Back row priced at $2.3M.
21 - 24
24
26
19 - 22
19
19
5-2
13
13
2800-3300
3,200
3,139
3100-4200
4,200
3,890
$1.6M-$1.7M
$1,700,000
$2,406,000
$2.1M-$3.0M
$3,000,000
$3,633,300
$400 - $516
$516
$661
$600-$968
$968
$1,009
Chileno Bay
Vista Serena / Montage
SFR Residences
Capella Pedregal
The Casonas
Haciendas CSL
Beachfront Villas
Range
Median
Average
Pre-Cnstrtn
Under construction. Average price $5M.
Selected Other Planned Resort Communities Los Cabos
Querencia
Club Villas - Phase I
Club Villas - Phase II
2006
2008
1 Story
1 Story
3BR +office
3 BR
Punta Ballena
Villas Las Conchas
2003
1 story
4/4.5
Range
Median
Average
Ocean View
46
Attached Built-For-Sale Product Characteristics
Re: Maravilla
Est
Sales
Community
Unit
Started
Unit Type
2006
Flats
Config.
No.
No.
Ann
Orientation
Units
Sold
Abs.
Ocean View
10
8
8
A/C Space Only
Unit Sizes (Ft2)
Unit Prices
Prices Per Ft2
Low
High
Low
High
Low
High
COMMENTS
1,900
4,000
1,900
4,000
$2,500,000
$5,000,000
$3,000,000
$5,500,000
$1,300
$1,250
$1,575
$1,375
Total of 36 to be offered, three model types, 8
units per building.
7,700
$10,000,000
$15,000,000
$1,300
$1,950
El Dorado
Casitas:
Two BR
Four BR
Penthouse
2 BR
4 BR
Ocean View
3,800 ft2 outdoors
2006
Flats
Resort Residences
2006
Flats
1 - 4 BR
Ocean View
81
70
70
890
3,550
$800,000
$3,780,000
$775
$1,065
Under construction
Penthouse Units
2006
Flats
4 BR
Ocean View
12
12
12
3,330
3,660
$4,300,000
$5,100,000
$1,300
$1,400
Under construction
Range
10 - 81
8 - 70
0-9
890-4000
1900-7700
$800K-$10.0M
$3.0M-$15M
$775-$1300
$1065-$1950
Median
12
12
12
2,615
3,660
$4,300,000
$5,100,000
$1,300
$1,400
Average
34
30
30
2,530
4,162
$4,520,000
$6,476,000
$1,185
$1,473
Haciendas Cabo San Lucas
Selected Other Planned Resort Communities Los Cabos
Querencia
Las Cabanas
2006
2-Story flats
2/2.5 & 3/3
Ocean View
14
7
5
2,800
2,800
$1,200,000
$1,550,000
$429
$554
Buyer picks finishes
2004
3 & 4-Story flats
3/3.5 & 4/4.5
Ocean View
54
24
9
2,954
3,300
$1,100,000
$2,100,000
$400
$636
3 bldgs complete, 4 under construction, 3 not yet
released.
Range
14 - 54
7 - 24
5-9
2800-2954
2800-3300
$1.1M - $1.2 M
$1.5-$2.1M
$400-$429
$554 - $636
Median
34
16
7
2,877
3,050
$1,150,000
$1,825,000
$414
$595
Average
34
16
7
2,877
3,050
$1,150,000
$1,825,000
$414
$595
Punta Ballena
Las Estrellas
Selected La Paz and Loreto Planned Communities
Marina CostaBaja
Pueblo Marinero Condos
Villas de Playa
Condos de Playa
2005
2005
2005
2-Story Flats
1 & 2 Story
1-story
1/1 & 2/2
2/2
1 & 2 BR
Marina-front
Waterfront
Waterfront
48
14
12
48
14
12
18
6
5
975
1,300
1,100
1,420
1,650
1,400
$180,000
$300,000
$400,000
$500,000
$700,000
$800,000
$185
$231
$364
$352
$424
$571
Paraiso del Mar
Las Villas
2004
6-Story Flats
2/2.5 & 3/3.5
Ocean & golf view
396
396
115
1,500
2,900
$229,000
$675,000
$153
$233
Loreto Bay
Village Homes (Phases 1 & 2)
2003
1 & 2 Story
1, 2, 3 & 4
Ocean & Interior
400
400
125
1,184
2,260
$295,000
$1,038,000
$249
$459
Jun-07
Flats
1 /1.5 & 2/2.5
Ocean View
56
22
22
1,462
1,882
$470,000
$775,000
$321
$412
Range
12 - 400
12 - 400
1400-2900
$180K-$470K
$500K - $1 M
$185-$321
$233-$571
Median
52
19
8
1,242
1,766
$297,500
$737,500
$240
$418
Average
154
95
32
1,253
1,919
$312,300
$748,000
$250
$409
Selected Todos Santos Area Communities
Sol Pacifica
Beachfront Condominiums
5 - 125 975 - 1500
Pre-construction reservations
47
Selected Destination Resorts with Hotel Related Residential
RE:Maravilla
Resort/Community Characteristics
Peak
Resort
Hotel
Hotel
Season
Brand
Units
Average
# Resid.
Sales
Lots & Units Sold
Rates
Signature
Golf1
Gross
Custom
Detached
Attached
Began
/ Total Inventory
Trans.
# Acres
Density
Home Lots
Built-For-Sale
Built-For-Sale
Value
153; 120
$850 - $930
1; 2 future
2004
65
TBD
No
2007
80 / 1000
2,250
0.4
tbd
tbd
tbd
$1,800,000
26 / 86
235
0.5
0%
10%
90%
$1,275,000
$950,000
Costa Rica
Peninsula Papagayo
Four Seasons; St Regis
St. Regis Bahia Coyol
St. Regis (Future)
Dominican Republic
Cap Cana
Alta Bella & Ritz-Carlton
350
TBD
1; 2 future
2002
450 / 5,000
2,500
2.0
tbd
tbd
tbd
Casa de Campo
Independent & Four Seasons
450
$353 - $664
4
1972
2,300 / 3,500
2,834
1.2
40%
30%
30%
$800,000
Roco Ki
Westin
151
TBD
1
2005
130 / 447
219
2.0
5%
30%
65%
$1,250,000
1; 2 future
1998
400 / 1000
1,500
0.7
10%
50%
40%
$1,700,000
1; 2 future
2004
TBD
1,580
na
TBD
TBD
TBD
$1,800,000
Mexico
Punta Mita, Puerto Vallarta
MayaKoba, Cancun Area
Four Seasons; St. Regis
Fairmont,Rosewood,
Viceroy, Banyan Tree, Regent
140;120
401;120
$590-$1,285
TBD
Future 400
Range:
65 - 401
1998 - 2007
235 - 2500
0.4- 2.0
0% - 40%
10% - 50%
30% - 90%
$800K - $1.8 M
Median:
120
2004
1580
0.95
8%
30%
53%
$1,275,000
Average:
175
1999
1588
1.14
14%
30%
56%
$1,368,000
Footnotes:
1
Signature Golf (on property):
Jack Nicklaus: Punta Mita
Greg Norman: Mayakoba
Arnold Palmer: Peninsula Papagayo
Source: Norton Consulting, Inc. (September 2007)
48
Hotel Villas and Condos
Re:Maravilla
Development
Units
Bdrms
Units
Sold
12
2
4
Ft 2
$ per
Ft 2
Average
Price
Per Unit
Orientation
Comments
2085
$815
$1,700,000
Hillside Ocean/Jungle Views
Dec 2006 Launch
$1,550,000
Beach Access
Obstructed Ocean Views
Communique Launch
Original Pricing $5000 per Sq.M
Lagoon/Golf
Playground Launch
Original Pricing $6000 per Sq. M
Part of 35 unit phase one offering that
included Beachfront and lagoon with mix
of studios, 1 and 2 bdrm units
Compset
Costa Rica
St Regis Playa Coyol
Dominican Republic
Roco Ki - Westin Jungle Lux Bungalows
12
2
6
1894
$818
Mexico
MayaKoba / Playa del Carmen
Laguna Kai - Rosewood
Viceroy Kor-MayaKoba
30
60
Kor - Playa del Carmen - The Tides
Compset Range
Compset Median
Compset Average
2
30
1250
$700
$925,000
2
2
1825
$800
$1,500,000
Lagoon/Golf
2
Sold out
1861
$700
$1,325,000
Playa del Carmen
1250 - 2085
1861
1783
$700-$818
$800
$767
$925K - $1.7M
$1,500,000
$1,400,000
One block from the beach
70 Stacked Flats in mix of
Studio, 1,2 & 3 BR
Source: Norton Consulting, Inc; October 2007
49
Hotel Branded Residences
Re:Maravilla
Development
Units Bdrms
Units
Sold
Size
Ft 2
Average
$ per
Ft 2.
Price
Per Unit
Orientation
Comments
2
3897
$789
$3,075,000
Ocean/Jungle Views
Dec 2006 Launch
Compset
Costa Rica
St Regis Playa Coyol
5
3
(53 total)
Peninula Papagayo
Four Seasons Papagayo Private Villas
Attached Villas
10
(20 total)
3
10
2750
$909
$2,500,000
Direct Oceanview
Pay FS overhead
Detached Villas
20
(40 total)
3&4
10
4000
$913
$3,650,000
Direct Oceanview
Pay FS overhead
Detached Villas
10
(32 total)
3
7
Reservas
4000
$925
$3,700,000
Lagoon
Now taking reservations
Detached Villas
2750 - 4000
3949
3662
$789 - $925
$911
$884
$2.25M - $3.7M
$3,362,500
$3,231,250
Mexico
Punta Mita
Four Seasons Private Villas (Ph4)
Maykoba
Rosewood Collector Villas (Ph 1)
Compset Range
Compset Median
Compset Average
50
Hotel Related Private Residence Clubs / Fractionals
RE: Maravilla
Unit Sizes
Unit
Community
Unit Prices
Price Per Week
Square Foot
Maintenance Fee
Unit Type
Config.
Orientation
Fractions
Low
High
Low
High
Low
High
Low
High
Low
High
3-Story Flats
2/2 & 3/3
Ocean (off )
One-eigth's
2,400
3,000
$360,000
$360,000
$55,400
$55,400
$120
$150
$6,515
$6,515
1-Story
2/2 & 3/3
Ocean (off )
One-twelth's
1,900
2,400
$160,000
$210,000
$37,000
$48,500
$84
$88
tbd
tbd
3-Story Flats
2/2 & 3/3
Mountain view
One-seventh's
1,720
2,240
$350,000
$475,000
$47,300
$64,200
$204
$212
$14,400
$17,400
Duplexes
2/2.5
Golf view
1/14th
1,670
1,670
----
$165,000
----
$44,600
----
$99
----
$6,000
Ritz-Carlton Club Bachelor Gulch (54 units)
3-Story Flats
2/2 & 3/3
Mountain view
One-twelth's
1,600
2,084
$242,500
$345,000
$56,000
$79,700
$150
$166
$10,000
$11,000
Ritz-Carlton Club & Spa, Jupiter (67 units)
1 & 2-Story Villas
2/2 & 4/3
Golf view
One-twelth's
1,980
2,900
$245,000
$328,000
$56,600
$75,800
$113
$124
$17,050
$18,800
Punta Ballena (Los Cabos, MX)
Esperanza (30 units)
Affiliation: Auberge
Peninsula Papagayo (Costa Rica)
Private Residence Club (20 units)
Affiliation: Four Seasons
Other Four Seasons Properties
Four Seasons Resort Jackson Hole (16 units)
Four Seasons Resort Scottsdale (51 units)
Other Ritz-Carlton Properties
Range
1600-2400
1670-3000
$160K-$360K
$210K-$475K
$37K-$56.6K
$48K-$79.7K
$84-$204
$88-$212
$6.5K-$17K
$6K-$18.8K
Median
70% Flats
1,810
2,320
$245,000
$336,500
$55,400
$59,800
$120
$137
$12,200
$11,000
Average
1,878
2,382
$271,500
$313,833
$50,460
$61,367
$134
$140
$11,991
$11,943
Source: Norton Consulting, Inc. (Late 2006 data)
51
Upscale Hotel Summary
Page 8
RE: Maravilla
Standard Room
Number of
Brand
Four Seasons
Mandarin Oriental
Auberge
Orient Express
St. Regis
Rooms
1
Rate Structure
Peak Season
Off Peak
Suite Rate Structure
Amenities
Peak Season
Off Peak
Villa Rate Structure
Peak Season
1
Resort Name
Resort Location
Off Peak
Peninsula Papagayo
Guanacaste, Costa Rica
153
$850-$930
$395-$585
1&2
$1,800-$2,600
$995-$1,400
---
---
Punta Mita
Puerta Vallarta, MX
140
$590-$1285
$375-$925
1&2
$1,915-$3,460
$1,025-$1,695
$5,950-$12,350
$2,940-$6,400
Emerald Bay
Great Exuma, Bahamas
183
$520 - $1,045
$275-$695
1&2
$1,045-$2,500
$695-$1,450
$6,950
$6,300
Nevis
Nevis, West Indies
196
$695-$1,025
$325-$535
1&2
$1,790-$3,950
$725-$2,750
---
---
Hualalai
Ka'upulehu, Kona
243
$735 - $1,115
$695 - $995
1&2
$1,450 - $2,260
$1,300-$2,000
$9,055
$8,100
Riviera Maya (April 2006)
Mayakoba
128
N/A
N/A
1&2
N/A
N/A
N/A
N/A
Esperanza Resort
Los Cabos, MX
56
$675-$1,225
$475-$1,025
1&3
$4,000-$5,500
$2,500-$3,500
$1,550-$3,500
$1,250-$2,500
Calistoga Ranch
Calistoga, CA
47
$695-$895
$525-$600
1
$975 - $1,325
$725 - $925
$3,200
$1,800
Auberge du Soleil
Napa Valley, CA
50
$625 - $950
$525 - $750
1&3
$1,350-$1900
$1,000-$1,350
$3,500
$3,000
La Samanna
French West Indies
81
$950
$950
1
$1,750-$4,700
$1,750-$4,700
$5,200
$5,200
Maroma Resort
Riviera Maya, MX
58
$570-$925
$480 - $780
1
$1,230-$2,250
$1,035-$1,900
$5,960
$5,000
Monarch Beach Resort & Spa
Dana Point, CA
400
$475-$2,045
$475 - $1,245
1&2
---
---
---
---
Temenos Estates Resort 1/
Anguilla
97
N/A
N/A
1&2
N/A
N/A
N/A
N/A
1/ Planned to open in 2008
Ritz-Carlton
Ritz-Carlton Jamaica
Rose Hall, Jamaica
427
$509-$929
$199-379
1&2
$959-$1149
$429-$709
---
---
Ritz-Carlton San Juan
San Juan, Puerto Rico
416
$619-959
$239-$249
1&3
$1,859-$1,859
$850-$899
---
---
Ritz-Carlton St. Thomas
St. Thomas, Virgin Islands
200
$859-$1,059
$259-$319
1&3
$1,690
$589-$689
---
---
Ritz-Carlton Cancun
Cancun, Mexico
365
$519-$599
$249-$399
1
$709-$939
$419-$629
---
---
Ritz-Carlton Grand Cayman 2/
Grand Cayman, Bahamas
365
$899-$1,599
$249-$449
1&2
$2500-$5500
$800-$2000
N/A
N/A
---
2/ Opened Jan 2006 (incl 72 suites)
Rosewood Resorts
Las Ventanas al Paraiso
Los Cabos, Mexico
61
$700-$1,325
$700-$1,325
1&3
$2,100-$3,600
$2,100-$3,600
---
Caneel Bay
St. John, Virgin Islands
166
$775 - $1,025
$315 - $650
------
---
---
---
---
Little Dix Bay
Virgin Gorda, BVI
98
$895- $1,100
$395 - $725
1
$1,500-$1,950
$825 -$1,025
$1,500 - $5,000
$2,000 - $2,600
Jumby Bay
St. John's, Antigua
50
$875-$975
$775-$875
3
$1350-$2,325
$1,075-$1,950
---
---
Laguna Kai 3/
Riviera Maya, Mexico
120
N/A
N/A
1&2
N/A
N/A
N/A
N/A
3/ Scheduled to open in 2007
One&Only Resorts
Fairmont Hotels &
Resorts
One&Only Palmilla
Los Cabos, Mexico
172
$600 - $1,100
$550 - $1,000
1&2
$1,400-$1,500
$1,300-$1,400
---
---
One&Only Ocean Club
Paradise Island, Bahamas
105
$775-$895
$490 - $600
1&2
$1,330 - $1,435
$875-$1020
$9,000-$10,000
$7500-$8500
Acapulco Princess
Acapulco, Mexico
1,017
$269 - $409
$189 - $319
1&2
$599-$629
$499-$529
---
---
Fairmont Pierre Marques
Acapulco, Mexico
335
$269- $339
$179 - $249
1&2
$329
$269
---
---
Fairmont Mayakoba
Riviera Maya, Mexico
401
$499-$699
$219-$299
1&3
$829-$1699
$499-$1,900
N/A
N/A
Aman Resorts
Amanyara
Providenciales, TCI
40
$1,450-$1,750
$1,000-$1,300
1
N/A
N/A
$5,200-$6,950
$3,600-$4,800
Independent
Parrot Cay
Parrot Cay, TCI
60
$680-$865
$450-$627
1
$1,580
$755-$1,075
$2,670
$1,470-$2,105
*Opening Summer 2008
Cabo San Lucas
61
Turks and Caicos
Grace Bay Beach
$595-$875
$200-$500
1
$1,000-$2,900
$650-$1,400
South Beach
Miami
126
$760-$920
$475-$550
1
$1,680-2,880
$1,050-$1,800
N/A
N/A
Grenadines
156
$815-$1,095
$475-$535
$1,275-$1,420
$720-$810
N/A
N/A
Capella Pedregal *1
Banyan Tree *2
Regent *3
Setai
Canouan Islands
Raffles
Amenities Legend: 1 - On-site spa; 2 - On-site golf; 3 - Access to off-site golf
1/ Pricing illustrated excludes units larger than standard suites
*1 Capella Pedregal, Cabo San Lucas 2008 (Mexico).
*2 Banyan Tree Planned Projects: MayaKoba 2008 (Mexico), Punta Diamante 2008 (Mexico), Chamela 2009 (Mexico), Los Cabos 2009 (Mexico), West Indies 2008 (Barbados).
*3 Regent planned project: Bahia Culebra near Papagayo 2009 (Costa Rica).
52
Estimated Occupancy and ADRs for Selected 5 Star Boutique Hotels
RE: Maravilla
Property (Year Opened)
Las Ventanas (1997)
La Esperanza (2002)
Four Seasons Punta Mita (2000)
Fours Seasons Papagayo (2004)
Location
Los Cabos, Mexico
Los Cabos, Mexico
Punta Mita Mexico
Peninsula Papagayo
Range
Median
Average
Management
Number of
Average
Annual
Rack Rate
2004
Estimated
2005
2006
Company
Rosewood
Auberge
Four Seasons
Four Seasons
Keys
61
56
140
153
Occupancy
88%
80%
90%
84%
Peak Season Off Season
$600 - $1,150 $450 - $900
$750 - $1,225 $375 - $775
$515 - $1200 $484 - $875
$850 - $1200 $425 - $785
ADR
$875
$606
$535
-----
ADR
$1,050
na
na
$515
ADR
$1,075
na
$600
$615
50 - 196
101
103
80%-90%
86%
86%
$535 - $875
$606
$672
$515-1,050
$783
$783
$600 - $1075
$615
$763
$515-$1225
$375-$900
53
General Description
Re: Maravilla - Todos Santos
Map Key
Development Name
Number of
Units Planned
Development
Size
Date
Sales Begun
Product Types
Planned Amenities
1
Sol Pacifico-Cerritos Beach
56
NA
2007
Beachfront Condominiums
Beach Club, Fitness Center, Pool, Swim-up Bar, Restaura
2
Los Cerritos Beach Resort & Spa
165
6.6 Acres
2008
Villas, Condominiums (Fractionals), Hotels
Pools, Beach Club, Restaurants, Fitness Center, Spa, Su
3
Agave Azul - Tequila Ranch
60 lots
50 Acres
2007
Oceanview Lots
Restaurant, Pools, Tequila Distillery, Beach Club
14 Condos
3
Tequila Gardens
5
Punta Lobos
Condos in Fractionals
62 lots
NA
2007
Mountain View Lots
Gardens (no beach access)
470 custom home
1,800 Acres
2007
SFR Oceanfront Homsites
Golf course, Boutique Hotel, Spa/Wellnes Center, Fitness
lots residences
54
Custom Home Lots
RE: Maravillas - Todos Santos
Map Key
Development
Orientation
# Lots
3
Oceanview
60
3
Tequila Gardens
Mountain View
62
#
Units Sold
Lot Size SF
Lot Price
40
21,780
$165,000 - $250,000
42
4,350
21,780
$40,000
$150,000
Comments
55
Built-For-Sale Products
RE: Maravillas - Todos Santos
Map Key
1
2
Development
Product Type
Sol Pacifico - Cerritos
Condominiums
Los Cerritos Beach Resort & Spa
Bungalow Villas
Condo Hotel Units
Condo Units
Villas
Unit Type
Orientation
# Units
Units Sold
56
28
Unit Size
Unit Price
Price / SF
1,462
1,882
3,458
$470,000
$755,000
$1,500,000
$321
$401
$434
TBD
N/A
1 BR
2 BR
3 BR Penthouse
Oceanview
Oceanview
Oceanview
2 & 3 BR
1 BR
1 and 2 BR
Oceanview
Oceanview
Oceanview
30
50
85
Not Begun Sales
Not Begun Sales
Not Begun Sales
4 BR
Oceanview
14
14
5,500
If sold as 1/12th fractions
3
5
Punta Lobos
Phase I
Single Family Residences
N/A
Hillside
250
20
800
1,200
$150,000
$205,000
$188
$171
Phase II
Single Family Residences
N/A
Interior
220
8
1,200
1,800
$170,000
$270,000
$142
$150
Comments
Developer Tony Cordova
624-145-2167
$400,000
Ranch Santa Ana Golf Club will
be locatedin this area.
56