H5 A Punta Mita Investment Summary Df 2 09

Investment Summary - Development Opportunity Punta Mita H-5/A

Bahia de Banderas, Nayarit, Mexico

Information is Deemed Reliable, But Not Guaranteed

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I. Maps & Arial Photos

Punta Mita Site Map

H-5/A Development Site

North American Flight Times Regional Map – Nayarit


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Bandaras Bay – Puerto Vallarta to Punta Mita Coastline Map – North of Punta Mita

Arial Photo – Close-up



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Arial Photo – Punta Mita


Aerial Photo – Bandaras Bay


Airport

Downtown Puerto Vallarta


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II. Subject Project Information

General

- H-5/A is one of only a few remaining undeveloped parcels within the gates of Punta Mita. The parcel is south of the Punta Mita Highway in close proximity to the main entrance gate to Punta Mita on the north side of the highway. Primary access to the site will be from a road to be built by DINE that will include a tunnel under the Punta Mita Highway from the north side so that access will be physically inside the main gated entrance to Punta Mita.

- The parcel has approximately 120 meters (390 feet) of frontage on the Pacific Ocean, on

the north side of Banderas Bay.

- The parcel contains approximately 9.186 hectares, or 22.69 acres. Surrounding uses include a vacant development parcel to the east (also within Punta Mita) that was recently acquired by Strategic Hotels; a buffer area to the north (between the property and the Punta Mita Highway) and Banderas Bay to the south. The villages of Emiliano Zapata and El Corral (which are also referred to as “Punta de Mita”) border the property to the west; these parcels are not part of Punta Mita, but are quickly becoming an attractive amenity to the owners and guests of the Punta Mita Resort.

Planned Residential Units – The project has approved plans for the development of sixty-eight residential units, including the following:

- Two luxury oceanfront single family residences, each with approximately 5,400 square feet of air conditioned space plus extensive outdoor living spaces, pools, etc. These homes, at approximate elevations of 6 and 9 meters, will be adjacent to the beach club and other oceanfront amenities that will serve the entire site.

- Eighteen detached ocean-view single-level villas, which will be constructed in two curving rows terraced up the hillside that slopes from the ocean. The first and second rows range in elevation from 9 to 11.5 meters and 14.5 to 16 meters, respectively; accordingly, the second row will be approximately 5 meters (16 feet) higher than the first, preserving the dramatic ocean views from each unit, which stretch from the city of Puerto Vallarta to the east and over the Banderas Bay to distance mountain peaks beyond. The planned units will have 4 bedrooms and 5.5 baths and will contain approximately 4,000 square feet of interior space and 1,800 square feet of exterior patio area. Each unit will also have its own swimming pool and hot tub.

- Forty-eight resort condominiums in six buildings. They are planned to be 3- and 4-bedroom units averaging approximately 3,400 square feet in multi-story buildings. It is planned that a separate amenity area, including a large pool and other associated amenities, will be built to serve this area of the project. Branding – Under a branding and co-development arrangement with Del Mar Development (“Del Mar”) (i) H-5/A will be developed, marketed, and operated as a “Del Mar” community and (ii) Del Mar will participate in certain aspects of the project execution, including sales & marketing and ongoing property management & operations. Del Mar (www.delmardevelopment.net) is widely recognized as a leader in world-class property management and resort residential services, making home ownership in a Del Mar community a consistently high-quality and carefree experience. Based on the absolute highest U.S. standards, their project portfolio is recognized as the resort industry


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“gold standard” for quality of construction, architectural design, craftsmanship and unparalleled property management services and amenities.

Site Plan

Villas Exterior Rendering


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Villa Interior Rendering

Villa Floor Plan


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III. Market Data & Comparable Project Information

The Puerto Vallarta real estate market is extraordinarily diverse, with product offerings at all levels of size, quality, and service. Punta Mita is the undisputed center for luxury real estate in the Puerto Vallarta and Northern Banderas Bay area, with numerous offerings in the multi-million dollar price range.

Sale volume and pricing within Punta Mita have shown strong positive trends as the community continues to mature. Reported sales (as reported by DINE, excluding re-sales and development parcels) were approximately $104.1 million in 2007 versus $79.6 million in 2006, with average unit prices of $2.08 million and $1.33 million, respectively. Quarter over quarter results show similar trends, with sales of $19.6 million in Q4 2007 versus $16.7 million in Q4 2006. Year-to-date sales information for 2008 will be available during the site visit.

The following information, which has been assembled primarily by the existing ownership group, summarizes pricing and sales activity in the current developer and resale offerings within Punta Mita and beyond. The information was compiled primarily via multiple tours of the area, from information provided by the two main luxury real estate brokerages operating in and around Punta Mita (La Punta Realty - www.lapuntarealty.com, and the Punta Mita Discovery Center - www.puntamita.com.mx), and various real estate and project websites. As with any market in Mexico, information is challenging to validate, and requires substantial efforts to amass and verify. Note: This information was last updated in early-2008.

This information has been supplemented by an appraisal / market study that was completed in March 2008, which was previously provided to PDI.

Primary Competitive Developments

Four Seasons Villas – The Four Season’s whole ownership product is located on the hillside west and north from the main Four Seasons hotel. They generally have good ocean views, but are not within easy walking distance of the hotel or beach. The units are detached homes ranging in size from 3,650 to 4,743 square feet of interior space and 6,475 to 7,996 square feet of total indoor/outdoor living area. The quality of construction is good and each has a small pool and a separate hot tub. There are a total of 53 villas planned, and the final phase of 12 units is currently being developed. The project has averaged about 10 to 12 sales per year. Current furnished pricing is $3.6 to $4.075 million ($860 - $1,000 per square foot). Units initially offered in 2004 started at $1.8 million. There were also four oceanfront villas originally sold as part of the resort called the Signature Estates.

Four Seasons Fractional Units – The Four Season fractional units adjoin the hotel. The first phase, which consisted of nine units, was completed in January 2007. The second phase of 15 units, which is currently being sold, is scheduled for completion in December 2008. A total of 35 units are planned, with more to be built on the La Solana parcel, which the Four Seasons developer purchased for $51 million approximately 2 years ago.

Pricing is reportedly being increased for the next phase, which will be marketed at $500,000 per share ($1,750 per square foot) for the 4 bedroom units and average $280,000 per share ($1,320 per square foot) for the two and three bedroom units. The

http://www.lapuntarealty.com/

http://www.puntamita.com.mx/


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use pattern being sold is a 1/12 interest with 21 reserved days and an additional 7 days of use possible. The quality of construction is good, but not exceptional for Punta Mita. They are stacked units in three story buildings. Many units have ocean views, but the buildings are back somewhat from the beach.

St. Regis For-Sale Product - The St. Regis hotel is under construction. The Discovery Center has indicated that the St. Regis will most likely offer an initial release of 15 to 20 whole ownership or fractional units, with later offerings to bring the total number of residential units to around 65. However, residential development would only come after the hotel has been completed and under operation. When completed, the St. Regis will offer 120 hotel rooms/suites, a 10,000 square foot spa and fitness center, two restaurants, and a beach club. The hotel is expected to open in 2008. The best information available has indicated the following program for the St. Regis for-sale product:

Whole Ownership Villas Size: 4 to 5 bedroom, 4,200 to 4,700 interior square feet Price: $5,500,000 to $6,500,000 Price per square foot: $1,310 - $1,380 Furnishing Package: $200,000 - $250,000 Premium Membership Included ($75,000 value) Anticipated Absorption: 2 years Fractional Size: Average 2,000 interior square feet Price: Average $240,000 per share Share: 1/15 Total Price per Villa: $3,600,000 Price per square foot: $1,250-$1,650 Anticipated Absorption: 120 per year / 5 years

Secondary Competitive Projects Within Punta Mita

La Punta Estates – This 29-lot oceanfront subdivision has seen resale lots in the range of $4.5-$7.5 million (1.04 to 1.34 acres). There have been no recent home sales, but lot re-sales have all been about 80 percent above original pricing in 2004.

Ranchos Estates – The Ranchos Estates is comprised of twenty, two-acre beachfront lots. All 20 lots have been sold and one resale took place in 2007 for $5.5 million for one-half of an original lot. The homes developed in this area are spectacular, featuring unique architecture and enjoying private access to very nice beaches. The development is not directly connected with the rest of Punta Mita, and therefore enjoys an even greater sense of seclusion than found elsewhere in the already very private Punta Mita. Pricing for re-sale homes in this area is considerably stronger than other areas in Punta Mita, reaching $7.5 million.

Lagos del Mar – Located on the golf course and generally less than one acre in size, Lagos del Mar offers ocean view lots, but no beachfront access. The beaches in the immediate vicinity are also a bit more pebbled than found elsewhere within Punta Mita. Like the Ranchos Estates, most of the homes developed to date are unique and of the highest quality. The lack of beachfront is reflected in the pricing compared to the Ranchos Estates, with re-sales between $2.8 million and $3.9 million.


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Kupuri – Kupuri is a collection of 30 residential lots located on the north side of Punta Mita. Pricing for the lots was reported to be between $2.25 million and $7.8 million. Beachfront, ocean-view, and hillside lots are being marketed, with each unit having its own private beach cabana. A Punta Mita Residents’ Beach Club is under construction on an adjacent parcel.

El Encanto – El Encanto is a collection of single family homes and fourplexes, offering ocean views but no beachfront access, as the development is separated from the beach by a golf fairway. Overall, the design and finishes of the units are above average, but not rising to the level of detail found in other projects in the area. There have been both villas and condominiums offered for sale.

Hacienda de Mita - Hacienda de Mita is a large multi-story condominium development with beach front and hillside locations. It will contain a total of 100 units and is reported to be about 70 percent sold out. The remaining unsold units are on the hillside away from the ocean. The exterior design and finishes are below the level of quality and appeal of most of Punta Mita. The unit interiors are of good quality, but not exceptional. The units in the front of the buildings have good ocean views, and there is a beach with a series of swimming pools overlooking it.

Porta Fortuna – The Porta Fortuna site (approximately 14 acres) is an oceanfront parcel with little or no beach to speak of, and was originally purchased for $21 million. This project recently started construction. The parcel has frontage on, and views across, Banderas Bay, but its beach is quite rocky. The site adjoins the new golf course under construction. The development will include a beach club, a planned dock and a spa. It will contain approximately 60 units consisting of 7 beachfront units, 6 ocean-view units (2nd row), 14 duplex units (3rd row) and 33 condominiums. The condominiums will be in five buildings at the back of the parcel.

Parcel H-5/B – This parcel was recently acquired for $53 million by Strategic Hotels and Resorts, owner of the Four Seasons Resort and the La Solana parcel; reportedly, this transaction closed despite substantially higher offers for the site due to the relationship between DINE and Strategic Hotels. It is approved for a 140 room hotel, 30 fractional units (sales cannot start until March 2010), 30 single-family homes and 80 condominiums. The parcel contains 23 hectares, or about 57 acres. This parcel borders H-5/A to the east.

Outside the Gates – The Greater Puerto Vallarta Real Estate Market

Downtown Puerto Vallarta – There are not many concentrated areas of high quality real estate development in the downtown Puerto Vallarta area; the notable exception is the Concha Chinas area, which is located on the hillsides above town. A typical four bedroom villa sells in the $2.5 - $3.5 million range.

Puerto Vallarta to Bucerias – The Puerto Vallarta marina area offers several high density condominium tower projects. The product here is very different from, and should not pose a competitive threat to, offerings in and around Punta Mita. Local real estate experts place the price per square foot in the $500 range. Heading north, there is little high quality development until you make the turn off the main highway at Bucerias and start west towards Punta Mita. The only notable development in the area of Bucerias is La Vida, a beachfront development located in the heart of Bucerias.


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La Cruz de Huancaxtle (commonly known as Costa Banderas) - Immediately in the vicinity of the turnoff from the main highway to the road to Punta Mita is the town of La Cruz de Huancaxtle. In addition to a new marina that has been recently completed, this area offers two sizeable projects that are actively under construction, Punta Esmeralda and Brisas Vallarta. Both are relatively high density projects with numerous condos, townhomes and single-family residences, along with a beach club, spa, and dining options.

La Cruz de Huancaxtle to Punta Mita – Along the stretch of the Banderas Bay west of La Cruz de Huancaxtle along the road to Punta Mita, there are several smaller luxury real estate projects offering spacious and often-times magnificent beachfront and ocean view homes and a limited number of development lots. Generally speaking, these communities have been previously developed and now offer only limited resale opportunities.

Real del Mar (www.realdelmarvallarta.com), where Exclusive Resorts owns 21 homes, is set on a steep hillside that affords excellent ocean views and contains a beach club offering food and beverage service, as well as a private beach with two pools, a small fitness center, a spa and concierge services. Pricing is around the $2.5 to $3.5 million range for a typical unit.

Los Veneros (www.losveneros.com.mx), now in development and pre-selling, is located on a wide sandy beach that is popular with the local surf population. Development plan calls for 290 condominiums. Despite the excellent ocean views and prime beachfront location, the high density is out of character with the rest of the immediate area, and pricing is commensurate.

El Banco (www.elbancomexico.com), in development and pre-selling, is one of the highest quality projects outside the gates of Punta Mita. Former Yahoo! CEO Tim Koogle acquired the land and intends to create a low-density, high-quality beachfront development. The site contains an excellent beach, with cliffs and gently sloping land that offers excellent views of the ocean. El Banco has sold 11 beachfront development lots, each sized at approximately two acres, for around $4.0 million each. An additional 13 ocean-view “beach villas” and 26 lakeside casitas will be developed. There is no private golf access for this development.

Punta Vista III - Under construction on a beachfront parcel adjoining H-5/A to the west, but outside of Punta Mita, Punta Vista III is a six-story stacked condominium project in its third phase. The offerings, with their good quality interiors and finishes, have reportedly been well received. They represent the high end of the range of quality for units built in the Punta de Mita village area. Although adjacent to H-5/A, the location is significantly inferior since it is outside of the gates of Punta Mita. The project will contain a total of 22 units. Remaining units are priced in the range of $1,250,000 to $3,500,000 for units ranging from about 2,722 to 6,478 square feet of interior space. Amenities include a large pool area, beachfront gym and spa, and individual garages.

Beyond Punta Mita to the North (known as Riviera Nayarit) – Continuing north are the towns of Sayulita and San Pancho. Sayulita has long been discovered and no longer resembles the sleepy fishing village it once was. An easy 20 minute drive from Punta Mita, Sayulita is popular for surfing and beachcombing, and also offers casual restaurants and bars. A scattering of high-end real estate can be found in the area between Sayulita and San Pancho.

http://www.realdelmarvallarta.com/

http://www.losveneros.com.mx/index.htm

http://www.elbancomexico.com/


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Two kilometers north of Punta Mita is Litibu, a large-scale development planned and under development by FONATUR. Litibu consists of 412 acres situated along two kilometers of beachfront. The current development plan calls for 2,880 hotel rooms and 910 tourist residences, as well as an 18-hole Greg Norman designed golf course. The golf course and infrastructure are under construction. It is rumored that an agreement is in place with Barcelo Hotels and Resorts to develop some or all of the hotel density.

IV. Property Photos


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Date post:	21-Nov-2014
Category:	Real Estate
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