Cerritos Beach - Tequila Ranch Update September 2008
Posted by janetkfish at 10/4/2008 12:32 PM 
Categories: Updates,Tequila Ranch,Cerritos,Cabo San Lucas
Categories: Updates,Tequila Ranch,Cerritos,Cabo San Lucas
Welcome to our latest update on Cerritos Beach and Tequila Ranch. I have decided to combine my update so you will first get a general update and then an update specific to each project.
I recently visited Cabo after a long hiatis. Part of the reason that I haven't visited Cabo as regularly as I had been 6 months ago is due primarily to what we are currently experiencing here in the US credit, mortgage and real estate markets. Our recession, down-turn, whatever you would like to call it has effected a number of things. In general the slowdown here has effected many of the investors who were pouring cash into Mexico. While the damage has been somewhat mitigated by the Europeans and Canadians who, thanks to the strength of their dollar continue to invest, primarily investment dollars were coming from the US and as that has dried up, projects have slowed. As I'm sure many of you are painfully aware people are stuck, doing nothing, hanging back, holding on to their cash - waiting. The effect has resulted in a general slowdown in Cabo and other regions of Mexico. I'm hearing estimates of a 20 - 40% slowdown in real estate sales in Cabo. I'll attempt to address how this slowdown could effect our projects with each individual project below.
That's the bad news. The good news is that Mexico continues to grow. The roads and other infrastructure projects are funded and moving forward. The road appears to still be on track for completion in 2 years. The work continues and progress is apparent. The existing condo project on Cerritos Beach is almost sold out with only a handful of condos still available. The first tower is up and should be open early 2009. It's so exciting to see building activity on Cerritos Beach.
Tequila Ranch
The tequila ranch distillery is coming along and current estimates are that is should be open early 2009. Construction has taken longer than we had originally thought, but there's been much progress - the basic structure is complete. 500 barrels of tequila have been delivered and was in the process of being stored on-site while I was there. I was treated to the experience of how you hand make regular tequila into aged anejo. Each individual barrel (actually red wine barrels) will be hand charred before the tequila will be put into the barrels. The tequila will age a year and one day as specified for anejo. Once again a testimonial to Tony's eye to every detail.
Completion of the Tequila Distillery has always been a key component to our marketing of our fractionals at Tequila Ranch. We know that people buy when they are there - as evidenced by almost all of the condos at Sol Pacifico being sold at the beach club on Cerritos. 150 couples touring the Distillery each week is important to our sales strategy. As such we made the decision to delay the construction of our Villas until the Distillery was closer to completion.
I'm a firm believer that things work out as they were meant to. The market has changed considerably since we began this project over a year ago. We feel strongly that we need to be flexible with our product to ensure we have what people want to buy. This is especially important for fractionals as there are a lot more of them to sell. On my recent trip I sat down with Tony and the architects and tweaked the project plan. As most of you know I have never been satisfied with the site map or the floor plans and had yet to find a solution that I could get on board with. We are working with a new group of architects who are fantastic, get it and are easy to work with. Their offices are right across the hall from Tony's office instead of in La Paz where our former architect has his offices. Here is our current concept which we are aggessively moving forward with. We are building a small mexican villiage within the walls of Tequila Ranch. Current working name of resort is The Village at Tequila Ranch (let me know what you think of the name). We have removed the tennis court, two pools, will reconfigure the site map, none of us liked the layout of the roads. Loral, Will and I had personnally purchased a large beach front lot which we have dedicated to the project as the site for an exclusive Beach Club - complete with Palapa bar and grill, large infinity pool, workout area, and all the amenties you'd want at a private beach club. We believe this exclusive amenity will be and excellent incentive for our prospects to buy. We have taken the sizes of the villas down from our original floor plan of 6000 square feet to a more desireable 2,500 - 3,500 square feet. We will offer monthly shares at a price point that will build sales momentum. We will build more villas, the total amount has yet to be determined, the architects are working on that as we speak. I will be back in Cabo early November and hope to share with you more specifics (site map, floor plans, etc.) at that time.
So I know you are all asking, how does this impact me? First I absolutely believe we are working on a product that will sell in the current market place and that is our first priority. Our goal is to produce the most desireable product for the greatest market value vs have a product that doesn't sell. With fractional sales momentum is key so we need to launch with a product that stimulates sales. While we don't have a definitive answer for you yet, we are talking about such solutions as giving our investors additional monthly shares which will keep them whole. Most of our investors are going to flip their shares before taking title which gives us much more flexibility. I feel fortunate that we are able to be flexible in our offering during a time where markets are so tumultous.
As a result of this synergy of thinking, I am even more excited than ever about our product and project now. I feel confident we are on-track. I am back to my 4 - 6 week visits to keep the project moving forward. So look forward to more frequent updates.
Cerritos Beach - La Amanezca
I have continued to work with Larry Henry, our design architect and the architects on the ground in Cabo to make progress on the condos, hotel, restaurants, spa, conference center, pool, lobby and all the other wonderful structures that make up La Amanezca. On my recent trip we revisited the overall plan and have taken down the size of the hotel to be truly a boutique hotel for prospective buyers. Along with everyone in real estate these days we are responding to the inactivity in the market. I don't have to tell anyone that people are on the sidelines waiting for something to happen. Some are waiting for the election to be over, the buyout to go into effect, the real estate market to bottom out and start its upturn. Money is tight and every location in the world is affected. Luckily for us, Mexico is less affected than most places so once the logjam of money frees up, we will continue to see impressive growth. Don't get me wrong, Mexico is still growing, it's just seen the rate of sales in real estate slow. Our target market has always been US buyers and right now most of our prospects are sidelined. So as we continue to pursue our permits and entitlements, we are trying to time the market and determine the best time to launch La Amanezca. Right now our current target is late spring/summer 2009 if the real estate market in the US has started to recover. We own the land and have funded the architecture and permitting so we are in good shape to move forward once we have entitlements. Stay tuned for my next update in November.
Janet on behalf of Janet, Loral and Will
I recently visited Cabo after a long hiatis. Part of the reason that I haven't visited Cabo as regularly as I had been 6 months ago is due primarily to what we are currently experiencing here in the US credit, mortgage and real estate markets. Our recession, down-turn, whatever you would like to call it has effected a number of things. In general the slowdown here has effected many of the investors who were pouring cash into Mexico. While the damage has been somewhat mitigated by the Europeans and Canadians who, thanks to the strength of their dollar continue to invest, primarily investment dollars were coming from the US and as that has dried up, projects have slowed. As I'm sure many of you are painfully aware people are stuck, doing nothing, hanging back, holding on to their cash - waiting. The effect has resulted in a general slowdown in Cabo and other regions of Mexico. I'm hearing estimates of a 20 - 40% slowdown in real estate sales in Cabo. I'll attempt to address how this slowdown could effect our projects with each individual project below.
That's the bad news. The good news is that Mexico continues to grow. The roads and other infrastructure projects are funded and moving forward. The road appears to still be on track for completion in 2 years. The work continues and progress is apparent. The existing condo project on Cerritos Beach is almost sold out with only a handful of condos still available. The first tower is up and should be open early 2009. It's so exciting to see building activity on Cerritos Beach.
Tequila Ranch
The tequila ranch distillery is coming along and current estimates are that is should be open early 2009. Construction has taken longer than we had originally thought, but there's been much progress - the basic structure is complete. 500 barrels of tequila have been delivered and was in the process of being stored on-site while I was there. I was treated to the experience of how you hand make regular tequila into aged anejo. Each individual barrel (actually red wine barrels) will be hand charred before the tequila will be put into the barrels. The tequila will age a year and one day as specified for anejo. Once again a testimonial to Tony's eye to every detail.
Completion of the Tequila Distillery has always been a key component to our marketing of our fractionals at Tequila Ranch. We know that people buy when they are there - as evidenced by almost all of the condos at Sol Pacifico being sold at the beach club on Cerritos. 150 couples touring the Distillery each week is important to our sales strategy. As such we made the decision to delay the construction of our Villas until the Distillery was closer to completion.
I'm a firm believer that things work out as they were meant to. The market has changed considerably since we began this project over a year ago. We feel strongly that we need to be flexible with our product to ensure we have what people want to buy. This is especially important for fractionals as there are a lot more of them to sell. On my recent trip I sat down with Tony and the architects and tweaked the project plan. As most of you know I have never been satisfied with the site map or the floor plans and had yet to find a solution that I could get on board with. We are working with a new group of architects who are fantastic, get it and are easy to work with. Their offices are right across the hall from Tony's office instead of in La Paz where our former architect has his offices. Here is our current concept which we are aggessively moving forward with. We are building a small mexican villiage within the walls of Tequila Ranch. Current working name of resort is The Village at Tequila Ranch (let me know what you think of the name). We have removed the tennis court, two pools, will reconfigure the site map, none of us liked the layout of the roads. Loral, Will and I had personnally purchased a large beach front lot which we have dedicated to the project as the site for an exclusive Beach Club - complete with Palapa bar and grill, large infinity pool, workout area, and all the amenties you'd want at a private beach club. We believe this exclusive amenity will be and excellent incentive for our prospects to buy. We have taken the sizes of the villas down from our original floor plan of 6000 square feet to a more desireable 2,500 - 3,500 square feet. We will offer monthly shares at a price point that will build sales momentum. We will build more villas, the total amount has yet to be determined, the architects are working on that as we speak. I will be back in Cabo early November and hope to share with you more specifics (site map, floor plans, etc.) at that time.
So I know you are all asking, how does this impact me? First I absolutely believe we are working on a product that will sell in the current market place and that is our first priority. Our goal is to produce the most desireable product for the greatest market value vs have a product that doesn't sell. With fractional sales momentum is key so we need to launch with a product that stimulates sales. While we don't have a definitive answer for you yet, we are talking about such solutions as giving our investors additional monthly shares which will keep them whole. Most of our investors are going to flip their shares before taking title which gives us much more flexibility. I feel fortunate that we are able to be flexible in our offering during a time where markets are so tumultous.
As a result of this synergy of thinking, I am even more excited than ever about our product and project now. I feel confident we are on-track. I am back to my 4 - 6 week visits to keep the project moving forward. So look forward to more frequent updates.
Cerritos Beach - La Amanezca
I have continued to work with Larry Henry, our design architect and the architects on the ground in Cabo to make progress on the condos, hotel, restaurants, spa, conference center, pool, lobby and all the other wonderful structures that make up La Amanezca. On my recent trip we revisited the overall plan and have taken down the size of the hotel to be truly a boutique hotel for prospective buyers. Along with everyone in real estate these days we are responding to the inactivity in the market. I don't have to tell anyone that people are on the sidelines waiting for something to happen. Some are waiting for the election to be over, the buyout to go into effect, the real estate market to bottom out and start its upturn. Money is tight and every location in the world is affected. Luckily for us, Mexico is less affected than most places so once the logjam of money frees up, we will continue to see impressive growth. Don't get me wrong, Mexico is still growing, it's just seen the rate of sales in real estate slow. Our target market has always been US buyers and right now most of our prospects are sidelined. So as we continue to pursue our permits and entitlements, we are trying to time the market and determine the best time to launch La Amanezca. Right now our current target is late spring/summer 2009 if the real estate market in the US has started to recover. We own the land and have funded the architecture and permitting so we are in good shape to move forward once we have entitlements. Stay tuned for my next update in November.
Janet on behalf of Janet, Loral and Will
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