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New York Times
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April 17, 2009
There’s a Silver Lining in Costa Rica’s Gold Coast
By PERRY GARFINKEL
AT the heart of the real estate wave in Guanacaste province in Costa Rica in 2006, some 20 residential
projects had either broken ground, been announced or been approved. About 350,000 visitors landed that
year at the regional airport in Liberia, quadrupling the figure from 2003, its first year of international flights.
In 2006, $131.4 million was spent on personal property sales in Guanacaste, according to the Central Bank
of Costa Rica, and Alexander Porras, an economist for the bank, estimated that most of that was in second
homes.
But now the tide has turned. A number of highly publicized residential developments aimed at second-home
owners and anchored by brand-name hotels and golf courses have been delayed on Guanacaste’s so-called
Gold Coast, a 60-mile stretch on the Pacific Ocean from the Papagayo Peninsula in the north to Tamarindo in
the south.
Vacation-home sales have been reduced to a ripple. Individuals who built or bought with an eye toward selling
have lowered or postponed their quick-flip expectations, trying instead to earn money by renting out their
properties in a region that remains a popular tourist destination.
These days, there are still visitors who come to Costa Rica on real estate buying sprees, but they will see less
than was projected three years ago.
That’s not all bad news. For the serious or even the spontaneous buyer “this means deals can be had in
some niche price ranges,” said Christopher Howard, an American author in Costa Rica who has written a
book on the topic that will be self-published in July.
The best deals are in the $300,000-and-under market, “but properties at the high end haven’t been hit too
badly,” Mr. Howard said. “In a way, this turn-down benefits the Guanacaste market. Things were developing
too fast; prices were getting too high.”
The best-known Guanacaste project to be delayed is Cacique, a venture backed by Stephen M. Case, co-
founder and former chairman of AOL. He announced plans in August 2007 for an $800 million development
that included two luxury hotels, an array of high-end homesites and 300 private residential units on 650
acres. A year later Mr. Case halted development. Jorge Cornick, corporate relations officer for Cacique, said
it would be delayed until the economic outlook improved.
Not far from Cacique, in Panama Beach, work had begun on La Punta Papagayo, a projected $300 million
development, but it’s now been put off, too, said the Minneapolis-based developer, Blaine Kirchert. The Costa
Blanca Hotel, which was on the property when he bought it, is open, but no progress has been made on
another hotel, the 150-room Viceroy, nor on the planned 86 condos and 34 estate lots.
Ground was broken in January 2008 in Brazilito for the Azulera Resort Village, a 557-acre community with a
$300 million Hyatt Regency and 1,000 condominiums, town houses and single-family houses. Then
construction stopped last fall. Anil Kothari, chief executive of the New Jersey-based Global Financial Group,
the developer, said that work would resume in June, with completion in two years.
Despite the slowdown, opportunities have risen. A small number of individual homeowners are finding a
market among vacationers seduced by the enduring appeal of the country, where annual municipal property
taxes are 0.25 percent of the construction value of the home, where no rain falls from December to May,
where 25 percent of the country’s rich biodiversity is protected parkland and where a stable democracy has
existed since 1899.
In February, Louise Chandler and Ken David, a couple in their early 50s from near Butte, Mont., walked into
the Tamarindo Beach office of Bella Collina Realty and walked out with a “fire sale” deal: on April 1 they
closed on a two-bedroom 1,100-square-foot town house. It was originally priced at $142,000; they paid
$99,000. Lock Cooper, the sales director at Bella Collina, said the owners had sold because they wanted to
trade up to a larger unit closer to the beach.
The new owners say they plan to spend two to three months a year there and rent it out the rest of the time.
“It was purely an impulse buy. We were on vacation, fell in love with the country and didn’t want to leave,” Ms.
Chandler said. “We just happened to pop into this agency. It was an unheard of deal — plus a pool and gated
security.”
Chris Simmons, an owner of ReMax Ocean Surf Realty in Tamarindo, said there were a few individual owners
in every property he currently represents who were willing to shave 20 to 30 percent off listing prices.
Developers are also posting special deals, he said, including at Crystal Sands in Langosta Beach, south of
Tamarindo. Five beachfront condos there, originally priced from $800,000 to $2.3 million, are being offered at
20 percent discounts.
But because “there are virtually no new projects breaking ground now,” Mr. Simmons said, “I’m going to swim
against the tide of conventional wisdom here and predict that the real problem we’ll face is next year when we’
ll have no inventory to sell.”
For now, though, homes remain available at the three major developments on the Gold Coast. They are
Peninsula Papagayo in the northern region (a 30-minute drive from Liberia), a 2,300-acre luxury development
anchored by a Four Seasons Hotel with its own collection of homes and lots for sale, the destination club
Exclusive Resorts and a 180-slip marina that opened in December; Reserva Conchal in the middle (near
Conchal and Flamingo Beaches), a 2,200-acre development with homes, lots and condos, with a Paradisus
Playa Hotel; and Hacienda Pinilla (just south of Tamarindo Beach), a 4,500-acre project, with a JW Marriott
resort that opened in early February.
Sales representatives from all three reported that since last September most of the signed contracts had
been for condos, while lots and villas had moved very slowly.
Those who buy lots in such gated developments and have their houses built “definitely minimize their risk
compared to starting from scratch on their own in this country,” said Bryant Martin, 49, of Denver, who is
Hacienda Pinilla’s largest individual property owner. Along with buying a 12-room bed-and-breakfast on the
grounds and turning it into a family vacation home, he also bought 13 beachfront acres (24 lots) to develop
as La Dulce Vida. On another lot, he built a 4,000-square-foot four-bedroom house, which he put on the
market on March 1 for $1.5 million and rents out for $7,500 a month.
“These development owners spend many millions on infrastructure — water, roads, electricity, permits —
which in a third-world country like this can be a time- and money-consuming process,” said Mr. Martin, who
owns a company that sells high-end bathroom fixtures, windows and doors and has built homes in Colorado,
Arizona and Mexico.
The Gaunacaste real estate ebb may turn out to be an inadvertent saving grace for a country known for its
ecological treasures.
Jim Preskitt underscored that idea, pointing to a hillside across Culebra Bay from the executive offices of
Peninsula Papagayo, where he is senior vice president. The forested hill dropped into the white-sand
beaches of villages named Panama, Hermosa and Coco.
“That hill would have been dotted with a Rosewood, a Miraval and a One & Only hotel. But all those projects
are stalled,” he said. “Though we welcome the competition and the regional buzz, this slowdown may be
nature’s way of saying, ‘Protect what you have.’ ”
Michael McNulty and his wife, Denise, were vacationing at the Four Seasons when they saw real estate
opportunities in the development. He and his friend and business partner, Frank Rizzo III, bought four
Papagayo lots in that frenzy three years ago and have since built two homes. Mr. McNulty said he hoped
delayed development protected not only the environment but also their investment, which he calculated at
about $9 million.
“When we saw the economy sliding, we worried about our long-term investment, but now we find ourselves in
an enviable position as pioneers here,” said Mr. McNulty, 47, of Philadelphia, a founder of the early Internet
business-to-business portal VerticalNet.com. The McNulty-Rizzo houses are the first of six built so far at
Peninsula Papagayo and the only two currently available for rent. When not vacationing with family and
friends, Mr. McNulty and Mr. Rizzo market the houses as vacation rentals at $2,200 to $4,500 a day,
depending on the season.
Meanwhile, Mr. McNulty still harbors fantasies of flipping the properties.
“Some day,” he said, “a wealthy yachtsman from Dubai will pull in to the new marina, look up, see our house
and say, ‘We need a place to sleep tonight. Let’s buy that one.’ ”
Great Homes and Destinations
Real Estate NYTimes.com
Copyright 2009 The New York Times Company
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| JUST OPENED JW Marriott Guanacaste Resort & Spa Hacienda Pinilla Tamarindo, Costa Rica |
JW Marriott Guanacaste Resort & Spa
Hacienda Pinilla
Tamarindo, Costa Rica
Hotel Highlights
Enjoy breathtaking sunsets while sipping a refreshment on Mansita beach.
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The world class Spa offering treatments designed to rejuvenate the body, mind,
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Marriott Rewards category: 6
Hotel Information
Check-in and Check-out
Check-in: 3:00 pm
Check-out: 12:00 pm
Express check-out
Video Review Billing, Video Checkout
Pet Policy
Pets not allowed
Property Information
3 floors, 310 rooms
8 meeting rooms, 7,223 sq ft of total meeting space
Services
Complimentary Service
Coffee/tea in-room
Shoeshine
Business Services
Copy service
Fax service
Full-service business center
Messenger service
Network/Internet printing
Overnight delivery/pickup
Post/parcel
Secretarial service
Translator
Guest Services
Babysitting
Cash machine/ATM
Concierge desk
Evening turndown service
Foreign exchange
Housekeeping service daily
Laundry on-site
Newspaper delivered to room
Newspaper in lobby
Room service, 24-hour
Safe deposit boxes, front desk
Valet dry-cleaning
Features
Guest Facilities
Barber/Beauty shop
Car Rental onsite: Avis, 506-225-6 0203
Game room
Video games
Shopping & Stores
Bookstore
Gift/newsstand
Accessibility
Service animals allowed for persons with disabilities
There may be a fee for some guest services. Not all features and services are
available in all rooms. Contact hotel for details.
JW Marriott® Hotel Guanacaste Resort & Spa
Hacienda Pinilla
Tamarindo, Costa Rica
Hacienda Pinilla
Tamarindo, Costa Rica
Hotel Highlights
Enjoy breathtaking sunsets while sipping a refreshment on Mansita beach.
Four restaurants and two bars, each with unique concepts ensures a diverse
gastronomical experience.
The world class Spa offering treatments designed to rejuvenate the body, mind,
and spirit
Marriott Rewards category: 6
Hotel Information
Check-in and Check-out
Check-in: 3:00 pm
Check-out: 12:00 pm
Express check-out
Video Review Billing, Video Checkout
Pet Policy
Pets not allowed
Property Information
3 floors, 310 rooms
8 meeting rooms, 7,223 sq ft of total meeting space
Services
Complimentary Service
Coffee/tea in-room
Shoeshine
Business Services
Copy service
Fax service
Full-service business center
Messenger service
Network/Internet printing
Overnight delivery/pickup
Post/parcel
Secretarial service
Translator
Guest Services
Babysitting
Cash machine/ATM
Concierge desk
Evening turndown service
Foreign exchange
Housekeeping service daily
Laundry on-site
Newspaper delivered to room
Newspaper in lobby
Room service, 24-hour
Safe deposit boxes, front desk
Valet dry-cleaning
Features
Guest Facilities
Barber/Beauty shop
Car Rental onsite: Avis, 506-225-6 0203
Game room
Video games
Shopping & Stores
Bookstore
Gift/newsstand
Accessibility
Service animals allowed for persons with disabilities
There may be a fee for some guest services. Not all features and services are
available in all rooms. Contact hotel for details.
JW Marriott® Hotel Guanacaste Resort & Spa
Hacienda Pinilla
Tamarindo, Costa Rica