Archive September, 2011

(I) CONDO-HOTEL: Real estate ownership + hotel services!!!

19 September, 2011 No Comments

We are talking about a hotel in which every room belongs to a different owner, but the entire hotel establishment is managed jointly …. also referred to as the perfect second home.

Its operation is similar to the one of a normal hotel with the difference that the rooms are owned by an investor. The investor will be able to enjoy the room for a certain period of time, and the rest of the time it will be exploited by the hotel managing company, producing a nice return to the investor.
This kind of business surged in the 80’s in South Florida, which then spread to other states as New York, Los Angeles, Las Vegas, or golf resorts and mountain resorts such as Aspen in Colorado. After a while, it became a very common figure in other countries such as Panama, Canada, Philippines, and many more.

Many second home owners consider the possibility to rent their home for as long as they don’t use it to take some profits out of it. However, in many cases they are not successful because it is not always easy to find tenants.

In this particular case, the “condo-hotel” investor owns a piece of real estate within a large hotel resort ans is aware that will be able to enjoy it one month out of a year. The remaining 11 months he will not have to pay expenses that a second home usually carries, and will be getting a return for his investment from the management company.

It is obvious that the management company, in order to maximize profitability, will put a restrain on specific dates in which the owner will not be able to use the home, for example in some countries, the months of July and August which are the busiest of the year. This type of investment would be more convenient for people who have flexible schedules, and are able to pick their vacation days with no restrains.

Condo-hotels” are usually located in the best destinations around the globe. C-h are high quality places where every little detail is taken into account, and its clientele is in the upper class. All this leads to a high turnover in room rentals. Thus, when investing in this specific product, it is recommended to do it on a hotel whose management company is prestigious and has good reputation.

It is a relatively new system in Spain, and it seems that in the urban aspect there is legal uncertainty. But in legal terms, the condo-hotel may be regulated within some of these figures: 1 – The hotel’s horizontal division, which would be the most common way to do it. In this case the owner would have the property and a registration notice proving them owners of a room. 2 – It might also be considered as a group of assets, which would mean to buy a % of the entire property without specifically dividing the parts (not the common way). 3 – A corporation, that is to acquire part of the hotel by the purchase of shares. In this corporation, the ownership of the hotel belongs to a company whose investors participate as shareholders.

Regarding the community services that the hotel offers (pools, spa, gym, golf, etc..), they will be available to the owner during his stay, with the possibility to pay them at a discount (depending on the agreement established with the management company).

The managing company is responsible for the rent, as well as for maintenance and repairs of both the property and the common areas. The portion of the income derived from the rental is allocated to finance, if any, repairs or possible damages in the property.

In a later post, I will present you with a list about the strengths and weaknesses of this type of investment, which differ from both timeshare or fractional properties.

NEW BVLGARI 6****** HOTEL IN LONDON!

16 September, 2011 1 Comment

Brick recovery in London? ….. people look for the safest investment, and  the lvxury hotel segment came to mind.

This new bvilding that attempts to arrange a hotel plvs six lvxury apartments, is located in the neighborhood of Knightsbridge, a very exclvsive area in the city of London with amazing views to Hyde Park (nearby Harrods). A few meters away from the hotel, you can find the most expensive apartments from the city, the One Hyde Park complex. The project is lead by Inditex co-founder Rosalia Mera, svpported by other investors such as Prime Capital Investors with an estimated capital outlay close to 350 million €. (Expansión 30/01/11)

The hotel project under the name of the Italian jewelry firm BVLGARI, which currently has hotels in Milan and Bali, will be managed by the Ritz Carlton family, the company that currently manages the other hotels from the chain.

Rosalia Mera has previous experience in the hotel indvstry, with a stake in the Room Mate chain, as well as a number of hotels in the US. In this case, it is a rather conservative project, and a way to diversify her real estate investments. London is also considered to be a stable market, and the hotel would become the first 6****** hotel in the city, which I am sure they will not have too many empty rooms.

The project’s site is where the old Normandie Hotel was established. The investment group bought the site in 2008, but it was not until over half a year ago that the necessary permits and licenses were finally approved.

Its opening is planned to be at the same time as the 2012 London Olympic Games.



(II) Real Estate Investment in Punta del Este – URUGUAY

15 September, 2011 No Comments

Uruguay is a tourist destination where people who went once, usually like to repeat. This makes a positive effect on the return of any real estate investment, especially of vacation properties.

Uruguay finds itself in a full expansion that has allowed, after a period of growth, to achieve economic stability. It focuses on low public spending policies, competitive tax rates, in addition to an improved tax collection, and a relatively open trade regime.

Besides the economic stability and the country’s strong legal system, the Uruguayan government has an open attitude towards foreign direct investment (FDI), by eliminating unnecessary paperwork such as previous registrations and authorizations, as well as restrictions that discriminate against local or foreign investors. This allows foreign capital to have no restrains in case they desired to participate in local companies. The legal and mercantile procedures to establish a corporation in Uruguay are simple, and the initial capital invested can benefit from tax exemptions, or VAT.

Punta del Este is emerging as one of the best business opportunities in the country. It is the most attractive real estate investment due to its location, like a “VIP real estate destination”. Despite Montevideo, Punta del Este has registered the highest number of transactions of second hand/vacation homes, whose main buyers come from Brazil, Argentina, United States or Europe, with an increasing number of Uruguayans as  their society gains purchasing power.

This part of the country offers virgin landscapes, combines nature and a very well designed modern city, with  its commercial and residential neighborhoods while respecting the area’s coastline natural beauty, which enables you to enjoy countless “first line views to the beach”, adding value to the property. Usually, properties acquired in Punta del Este are occupied most of the time, fostered by a climate that has an average temperature of 30 º C in January, which compared to Barcelona or Madrid, is “a bit warmer”.

As a relevant fact, I would like to highlight some investment figures that attempt to develop different markets with less conventional structures. They base their functioning in ways that are more secure in contrast to the potential risks, promoting a more efficient development:

* Building Trust at cost, which would be associated to the market of residential housing.

* Condo Hotels, associated to the development of second homes in tourist areas and for selling purposes.

In a future post I will make a deep analysis of these figures that are increasingly becoming more powerful in this housing market.

(I) Real Estate Investment in Punta del Este – URUGUAY

15 September, 2011 No Comments

If you are interested in brand new real estate such as homes, flats or other new properties around the world, check out the international portal www.obranueva-newhomes.com. You will be able to contact directly developers and promoters who offer these properties in each particular country. It is a simple and easy way to get to know the international market.

In this case, it’s a narrow strip of land that divides the waters of “el Rio de la Plata” and the Atlantic Ocean. Thus, its extensive crystalline water coasts.

Uruguay is among the international tourist destinations that offer the possibility to take a summer vacation in January.

Let me mention the reasons for which one should consider investing in Real Estate in this area of the world:

1 – Political stability: Uruguay is considered the most peaceful country is South America, followed by Costa Rica.

2-New constructions are luxurious, with great designs, and integrated in the landscape. Punta del Este has made an effort to achieve a sustainable development, with growth that respects the environment.

3-Paradisiac beaches, lacunas, wildlife, and caves, are what surrounds the peninsula (so appreciated around the world).

4 – Here you can acquire a home and a higher standard of living at a considerably lower price than in Europe.

5 – Real estate is expected to increase significantly in value

6 – As a foreigner, when buying a property, you will be treated equally in terms of taxation.

BLACK SEA GARDENS RESORT in BULGARIA, A FOSTER + PARTNERS PROJECT

13 September, 2011 No Comments

SUSTAINABLE ARCHITECTURE PROJECT
Norman Foster Black Sea Resort master plan

Among the impressive collection of projects that Norman Foster’s studio has designed, we find this master plan for the development of a tourist complex in the coast of Bulgaria’s Black Sea. This project tries to minimize the impact on the environment, and its possible gas emissions.

It will be located near the Bulgarian town of Byala divided in five neighborhoods that make up the complex that will be located on top of small hills covered with forest. The neighborhoods are: Sky Village, Wilderness Village, Meadow Village, Cape Village, and Sea Village, all of them by the sea. Its streets will be filled with trees and vegetation, but cars will not be allowed to circulate which is one of the ways to avoid gases. Residents will have to leave their car in underground garages located at the entrance of each of the neighborhoods, and in order to move around there will be electric shuttles or the possibility to have electric carts, and bicycles. The project was designed so that the entire community, 15,400 residents, could live the entire year and enjoy the area’s great climate.

This project is currently on standby as the developer Madara Bulgarian Property Fund ltd. (a company that was listed on the London Stock Exchange ) needs to find partners / investors to help them finance a portion of this development in order to finish it.

2011 Menu

12 September, 2011 No Comments

It is quite difficult to give advise but it is even harder to predict.

The fact that 2010 was characterized by the wisdom with which real estate investors operated, lead us to think that 2011 could go the same way, especially in the residential sector (heavily influenced by the lack of financing for properties that were not within the bank´s portfolio).

The engine for non-residential real estate transactions during 2011 could be malls and store space, surpassing demand for office space (mainly due to the decrease in rental income and to the turnover of some portfolio´s investors).

Due to the lack of financing many companies cannot continue to develop their regular activity, and their investment side has had to put their Real Estate assets for sale, in many cases through the common “Sale & Leaseback” method, at very attractive prices for external investors.

It is interesting to see that a crisis can also be a source of opportunities. It is especially at the end of it when one can make the best investments…. but the big question is: are we close to the end? To answer this you must pay attention to the moves investors are making.

If we take a look to the moves Amancio Ortega (Zara) is doing, we see that he is closing its SICAVs (variable income Investment Companies) to spend his money on real estate. With this money, the Ortega Family Office “Pontegadea” negotiates the purchase of buildings of financial institutions such as BBVA. This bank previously sold them to real estate fund REEF (owned by Deutsche Bank), in which BBVA went from owner to tenant. Later on, REEF started to sell these assets and, Ortega as well as many other investors, have been taking advantage of the liquidity needs financial institutions are facing, by acquiring quality properties at a discount. Besides the investments Pontegadea was doing in Spain, they are also investing in international destinations such as the US, Mexico, Portugal, France, and Germany. Pontegadea  focuses on commercial and office buildings that have long-term rental contracts, and that are located in the city’s prime location, which is the sector that better withstand the crisis (Expansión, 12/21/10)

Other great fortunes (ie. Isak Andic, owner of fashion brand Mango, who recently bought a building in Paseo de Gracia, 36) are investing in real estate. This type of investors are very well advised, and are able to see great business opportunities in the midst of this profound crisis and a broken housing market.

Read the following phrases that Albert Einstein proposed in order to overcome a crisis,

MUSAC, symbiosis of ARCHITECTURE and ART

8 September, 2011 No Comments

MUSAC is the Museum of Contemporary Art of Castilla and León (2005):

Mies Van der Rohe Prize for Contemporary Architecture (European Union 2007).

This museum located in the city of León is the work of two Spanish architects from Madrid, Emilio Tuñón and Luis Moreno Mansilla, awarded with the 2003 Spanish Architecture prize. After three years of development, they have designed this museum as a large surface for culture, with continuous spaces, but very well diversified. The museum consists of a series of linked but autonomous showrooms, able to display exhibitions of different sizes and characteristics at the same time. Each space opens to different rooms and patios in a way that achieve transversal and diagonal views.

It’s a wide building with irregular floors. The facade is composed of large panels of glass of 42 different colors that with changes of sunlight, make the building look as if it had a changing facade. The outside area, is projected as a concave space that also hosts events and activities.  The interior has a great surface of ​​continuous but different spaces that have plenty of rooms, skylights and patios, as an example of symbiosis between architecture and art.

The interior is built with white concrete walls, trying to be a comfortable space for art. The building’s original and current purpose was to make an exhibition of the art of the XXI century, whose collection consisted of 800 works created by national and international contemporary artists.

In addition to the prize mentioned above, the building has been recognized internationally in other occasions such as

* ON-SITE exposition: New Architecture in Spain, hosted by the MOMA in New York, noted as one of the most important architectural projects of Spain.

* Spanish representation in the Venice Architecture Biennale.

 

New York Museum of America: Monopoly (game) of gold and diamonds.

8 September, 2011 No Comments

A real estate fiction that holds on to the crisis.

This is a version of the popular board game Monopoly created by the jeweler Sidney Mobell in 1988, ordered by toymaker Hasbro, the company that commercializes the game, and that carries a value of $2 million. This version was not marketed, instead was donated to the Smithsonian’s Museum of Natural History, who then lent it to the New York’s Museum of Finance located on Wall Street for a few months, and became the museum’s newest attraction.

No need to explain the dynamics of this game, which we all know and have enjoyed since its inception

The following pieces of the game are made with gold; the board, the street cards, its chips and the dices. The hotels are decorated with sapphires and the houses with rubies on top of the chimneys. The dots on the dices are diamonds, and the famous streets, which could vary depending on which country or city the game was bought, are decorated with diamonds as well as the path from the prison to the parking lot.

There have been many versions of this game, noting the chocolate one made by Neiman Marcus.

 This game is intended to be a representation of the capitalist world we live in and the attractions of wealth accumulation, promoting competition, and the search for the best positions within the real estate market in different locations, and therefore of our society.

The Associated Press video gives a more detailed picture of the Monopoly as a piece of jewelry . 

http://www.youtube.com/watch?v=EZTICTJpRnE&feature=player_embedded

A peculiar version of the famous Forbes list ranking billionaires around the world, is the “Fiction Forbes List” which has also had some variations in the last few years; Mr. Monopoly, who had amassed great wealth through real estate speculation and was at the top of the list early in the decade, has disappeared after losing his fortune, swept away by the crisis that hit real estate (subprime mortgages) in the United States. Instead, Uncle Scrooge (Donald Duck), invested his fortune in gold (a safe haven during the financial-real estate crisis) that increased his wealth even more scaling up to the top 5 in the Forbes-fiction list.

Some advice when purchasing in the foreign market so that YOU DON´T…

6 September, 2011 No Comments

1 – Overestimate the budget itself:
It is dangerous to rely solely on the income received from renting the property to cover  mortgage payments. One must always have reserve funds.


2 Sign a contract without the appropriate legal counseling such as an attorney:
It is crucial to have a lawyer check any document that you need to sign. When you purchase a property off the architectural plans, or when you make a trip to the region to check out the promotions, there may be some pressure to sign documents, or make payments. Thus, you must count with an efficient lawyer that is available either by email or fax at any time.

3-Rely on something, unless otherwise specified in the contract:
In most cases the developer selling the property is the one that will be responsible to rent and manage it during the months the owner does not use it, which will be specified in advance. The concepts that should be clearly identified are: the months available for rent, total amount charged for rent, and how will be divided between the owner and the agency. The guarantees for rentals, in particular, are always based on verbal promises, but often are not specified in the contract clauses. Make sure that the contract has no cracks in this matter.

4-Ignore additional costs
 In some countries, fees and taxes can add another 15% of the purchase price. It must me added to the total.

5-Ignore the effect of currency fluctuations
 The value of Euro € may vary, increasing or decreasing based on the fluctuation with repect to other currencies like the US dollar $.

 6-Ignore the local tax system:
You must be aware of the tax obligations instead of assuming a similar system as in our country.

7 -Use a lawyer who works or has a close relationship with the promoter:
To avoid conflict of interests between the promoter or agent to whom you are buying the property.

8- Purchase with your heart instead of using your head: Most purchases abroad work quite well … …… But it may happen that the property of your dreams becomes a nightmare if you have not done the appropriate market research before deciding to purchase the property.

 

Homes with cellar

6 September, 2011 No Comments

For people who are wine lovers and enjoy to have it at home, here are some guidelines to follow that will help keep good wine in perfect condition.

– An environment with adequate ventilation to prevent odors.
– Very little presence of light
– Temperature should be between 10 º and 16 º C.
– Moisture MUST be over 60%
– Bottles must be placed horizontally to prevent that wine moistens the cork
– Must be located in a place with no vibrations.

Today, with glass cabinets specially designed to store wine, and in most cases acclimatized to a temperature suitable for its conservation, it becomes less necessary to have the traditional cellar in the house’s basement. This saves space and ensures better preservation of the wine because its temperature is kept constant.

There are many ways to decorate a wine cellar. From the classic cellars made of wood with customized furniture to take advantage of every single corner, or simply by stacking the modules required to store the number of bottles available.

 On the other side we have the modern ones, which include those made of metal, as designed by the Spanish architecture studio A-cero. Check out these pictures…..