Costa Rica is experiencing explosive growth
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News Articles

The articles below represent some of the press coverage of the booming real estate market in Costa rica.

Saudi Billionaire Hints At Hotel Investment
By RALPH NICHOLSON
Published: August 17th, 2007, The Beach Times

Saudi billionaire, Prince Al-Waleed bin Talal bin Abdul Aziz Al Saud, arrived in Costa Rica this week, saying he wanted to build six hotels in the country, two of them in the Gulf of Papagayo in Guanacaste.
Prince Al-Waleed, whose Kingdom Holding Company is the biggest foreign investor in the United States, announced his hotel investment plan after a 30-minute meeting with President Oscar Arias in Casa Presidencial.
The investments are likely to be made through the Raffles and Fairmont chains of hotels.
“We are exploring the opportunity of making additional investments in Costa Rica,” Prince Al-Waled said.
“The Four seasons Hotel operating in Papagayo has placed Costa Rica on the radar of the five-star hotel customers of the world,” he added.
“It is too early to talk about amounts to invest and time terms. However the project development companies are discussing the convenience of establishing the Raffles and Fairmont hotels in this country.”
In January last year he and a partner — the US real estate company Colony Capital — closed a $3.9 billion deal to buy Fairmont Hotel & Resorts. Today Fairmont has 53 hotels and resorts in 11 countries, mostly in Canada and the US.
More recently Prince Al-Waleed announced that, with Bill Gates, he would take the Toronto-based Four Seasons Hotel chain private for $3.8 billion, including debt.
The bid was made up of three separate investors, which include Bill Gates’ Cascade Investment LLC, Isadore Sharp, chief executive and chairman of the Four Seasons Hotels LLC, as well as the 52-year-old Prince.
The Prince would not be drawn on where all the hotels might be sited, but he said: “Costa Rica has a democratic system and political and economical stability that provide the necessary confidence to increase investments in this country,” he said.
Prince Al-Waleed and his entourage of about 50 arrived at Liberia’s Daniel Oduber International Airport from Panama on board his private Boeing 747-400, in the green and white livery of the Kingdom Holding Company. The huge jetliner can travel more than 13,000 kilometers (about 7200 miles) without re-fuelling at a cruising speed of 900 kilometers per hour (about 560mph).
A smaller, Raytheon Hawker 800-A business jet, in matching colors, accompanied the bigger plane.
The entourage took 48 rooms in Peninsula Papagayo’s Four Seasons Hotel. Contrary to earlier reports, there were other guests in the hotel.
He did not play golf, but walked the property extensively.
“He was absolutely fascinated with the beauty of the project,” said one familiar with the Prince’s movements. “It is the first time he had come and I don’t think he expected so much beauty.”
The Prince and his entourage left Costa Rica on Tuesday, flying on to Guatemala, before continental USA and Hawaii.

Billion Dollar Tourism Project For Guanacaste
By RALPH NICHOLSON
Published: August 31st, 2007, The Beach Times

Two Hotels, Marina, Golf Course and 800 Home Sites

US developers on Wednesday announced plans for a 15-year, billion-dollar tourism project, to start construction in November on two beach-front properties in Guanacaste’s north.
The project, known simply as Guacamaya after one of the beaches, will include a Ritz Carlton hotel, a smaller, as-yet-unnamed boutique hotel, an 18-hole golf course, a 200-slip marina, an equestrian center and up to 800 single family homes.
For the first time, the project will include a desalinization plant that will turn sea water into drinking water and ease pressure on Guanacaste’s fragile water supplies.
“This further consolidates the area as a destination for the upscale tourist market,” said the Minister for Tourism, Carlos Ricardo Benavides, at a party to launch the project.
“To be chosen for the site of such an upscale or high end project, well, it is not every country that can do this,” he told about 120 invited guests from local and national government and the tourism industry.
Mr Benavides was speaking after officially opening the offices of Plantación Properties, an affiliate of Christie’s Great Estates, which will market and sell the residential arm of the project.
The development, to be built on about 800 hectares (2000 acres), is a partnership between Union Box Company of Baltimore in Maryland and Greenfield Partners, a privately-held real estate investment firm in South Norwalk, Connecticut.
The property, which was purchased in two chunks over three years, covers three, white-sand beaches — Playas Guacamaya and Zapotal, plus the smaller Playa Celeste — all about 25 kilometers (16 miles) north of Tamarindo.
A $100 million, 110-room Ritz Carlton hotel will be built across Zapotal beach, beginning construction late next year. Larry Silverstein, the Chief Executive Officer of Union Box Company, said he expected the hotel to be completed by the end of 2010.
“We talked to a number of hotels — we approached some and others approached us — but it was clear the Ritz was a very good fit for us,” Mr Silverstein said.
“That whole area is somewhat unknown,” he added. “For most people the world stops after Playa Potrero and starts again, further north, at Playa Ocotal. The Ritz is a distinct brand that can bring immediate recognition, as opposed to there being just another hotel.”
It is understood the developers will build the hotel, while the Ritz will lend its name to the structure, taking a management fee and a percentage of room sales, as has become customary with hotel projects.
Work on an 18-hole golf course, designed by architect Rees Jones, will start at the same time as the hotel. Mr Jones, who has designed more than 100 golf courses, mainly in the US, will lay out the course in the Zapotal Valley, which stretches about four kilometers back from the coast. There will be no residential sites within the valley.
A 200 slip marina, capable of docking so-called mega-yachts of up to 92 meters long (300 feet) will be sited at the southern end of the development, between Zapotal and Celeste beaches.
A boutique hotel, yet to be named, and of somewhere between 50 and 100 rooms, will be built to service the marina.

AOL Founder Plans $800 Million Beach Resort
By PETER KRUPA
Published: August 10, 2007, The Tico Times

In front of video cameras and reporters at Casa Presidencial, former Silicone Valley tycoon Steve Case formally announced plans for an $800 million luxury resort complex on Cacique Point, between Cocos and Hermosa beaches, in the Northwest province of Guanacaste.
Case, one of the co-founders of America Online (AOL), made the announcement last Friday with Costa Rican President Oscar Arias at his side, saying that the project would “define a new generation
of resort development” with its environmental and social responsibility.
“It’s very important that business leaders realize that it has to be about more that just your profit,” the U.S. businessman said.
The elephant in the room however, was that the environmental-impact study for Case’s project had already been rejected by the National Technical Secretariat of the Environment Ministry (SETENA), precisely because the project lacked details for how it plans to mitigate its impact on the local environment and the community.
A new environmental-impact study — which SETENA is now evaluating — was submitted July 9. The study must be approved by SETENA before the project can move forward.
Case’s proposed resort would be among the largest of several large tourism complexes in that part of the country. To be known as Cacique Costa Rica, the 263-
hectare complex would feature three five-star hotel brands, private villas, an 18-hole Tom Doak golf course and a tennis and fitness center branded with the names of former tennis stars Andre Agassi and Stefi Graf.
The project would be the first to be developed by Revolution Places LLC, a luxury tourism developer founded by Case and held by the company Revolution LLC, which Case founded in 2005.
The Cacique Point development would have several hundred rooms and villas available for travelers, as well as 300 properties for sale. Hotel brands will include small houses operated by One & Only Resorts and a spa and hotel with the Miraval brand. The One & Only in Palmilla, Mexico, offers rooms for $450-2,600 per night.
The first Phase of the Cicique project is slated for completion by 2010.
Case sited his upbringing in Hawaii as an inspiration for the project, which he said will integrate the luxury vacation complex with the local community, even going so far as to build a village that will be “a gathering place for the whole region” and include residences and local shops.

In a Corner of Costa Rica, a Beachhead for Luxury
By JANELLE BROWN
Published: February 3, 2006, New York Times

THE Liberia airport, Costa Rica's new international hub, is not precisely a beacon of modern transportation. The terminal consists of an open-air warehouse with a corrugated tin roof, cooled by an enormous fan whose main effect is to stir the grasshoppers into a frenzy. In the line for customs, visitors are kept company by butterflies and the occasional blasé frog.
Before visitors even leave the tarmac, though, smiling representatives from the local Chamber of Tourism are there to greet their out-of-town guests, most of whom have just arrived on the new direct three-hour flights from Atlanta, Miami and Houston. They press the real estate guide "Costa Rica Traveler" into newcomers' hands. In its pages, American visitors can find ads for dozens of different developments that will happily sell them a villa with an ocean view.
For decades the remote Pacific Coast of northern Costa Rica — the Guanacaste province — was the domain of die-hard surfers and backpackers, with other visitors deterred by the grueling five-hour drive from the country's main airport in San José. But in the last few years, Guanacaste has been transformed by a collection of hotels and real estate developments aimed at America's affluent baby boomers.
All up and down the coast, bulldozers are at work. Three major developments, including a project anchored by a Four Seasons hotel, are already selling luxury condominiums for $500,000 and up, and hundreds of smaller, more speculative endeavors are also breaking ground. The airport in Liberia, the capital of Guanacaste, is at the center of the transformation. Three years ago, when the first direct flights from the United States landed, only 50,000 people a year arrived there. In 2005, 300,000 did.
In the airport lines, Americans talk in urgent tones about the money to be made, about "Wild West" opportunities. Never mind that Guanacaste is still a region of cattle ranchers and rutted roads. The new homesteaders envision a beach, golf and spa destination equal to the Puerto Vallarta corridor in Mexico or Wailea Beach on Maui — without, so far at least, the high-rise blight. The area's promoters have taken to calling it the new Gold Coast.
" It's hard for me to look at all this change — you're used to how uncluttered it was," said Chris Mailloux, a ReMax agent whose family has been selling real estate in the area for 13 years. In one abbreviated block near his office, in the tiny fishing village of Playa Hermosa, eight developments of at least 20 homes each are under construction: "Lots that were once $50,000 are now $500,000," he said. "There's not a lot left that hasn't quadrupled in value in the last three years."
Or, as Brad Schmidt, a local builder and an American expatriate in Costa Rica for 10 years, put it, "It's like fishing behind a tuna boat during a feeding frenzy."
HISTORICALLY, the smattering of vacation homes in Central America were mostly bargain-basement retirement houses built by older expats. A gradual identity shift began when the Central American peace accord of 1987 curbed regional political instabilities, and now it has accelerated. Vacation home developments, often financed by American investors, are going up not only in Costa Rica, which has led the trend, but in Panama, Honduras, Belize and Nicaragua. American buyers are drawn to the cheap prices for oceanfront real estate on previously undeveloped land.
" The image problem doesn't exist anymore," said Roger Gallo, founder of EscapeArtist.com, a newsletter for Americans that focuses on Central and South America. "There's more money to be made in foreign real estate because the prices are lower with more growth potential."
Costa Rica has the advantages of an active tourism board and a reputation as peaceful and environmentally friendly. It also has the longest tradition of democracy in Latin America.
Bill Royster, the developer behind the luxurious Sueños resort south of Guanacaste on the Pacific near the town of Jacó, said that because foreigners are allowed to own land directly, rather than through the bank-trust leases required in some Mexican property deals. "No one is going to expropriate your property," he said.
And what about that property? In Guanacaste, the jungle runs straight from the volcanoes to the sea, where it overlooks a warm azure ocean from 200-foot bluffs. Armadillos, howler monkeys, small raccoon-like pizote, parrots and the occasional jaguar make their homes underneath the broad leaves of the mango and palm trees. The foliage grows up to 10 feet a year, though in the "gold season" — a flattering term for the dry months of December through April — most trees lose their leaves, leaving the landscape barren.
Until the developers began arriving with suitcases of cash, Guanacaste was mostly the domain of cowboys called sabaneros, whose legacy lingers at local rodeos. Roads must be shared with herds of ambling cattle and are often so potholed that local people drive on the ground along the side. Yet strung all along them are signs, all in English, advertising million-dollar villas.
" It's fairly easy to develop in Costa Rica; you have a good work force at extremely cheap prices," said William Knickman, a New Jersey developer who, with a group of friends, snapped up land in Guanacaste, formed a company called Costa Rica Lifestyle Development and is now selling lots for up to $300,000 apiece. "And it's hot, very hot, as a place for people to buy. It's booming right now."
The boom can be traced back to the 2,300-acre, $400 million Península Papagayo project, indisputably the most luxurious development on the coast. It lies on land that was set aside for tourism by the Costa Rican government in the late 1970's but remained uninterrupted jungle until 1997, when Alan Kelso, a Costa Rican developer, got American financing and broke ground. Península Papagayo has a Four Seasons resort and is expected to include three more hotels and more than 1,000 luxury homes, although, at the moment, only 44 houses and condos have been built. (They're selling for $2 million to $12 million.)
"We put the region on the map," Mr. Kelso said as he sat in Península Papagayo's command center, a facility peppered with satellite dishes. He also plans a marina, a polo field and, of course, the requisite three brand-name golf courses. "The whole challenge is to create a luxury market in a country that doesn't have a culture of service," he said. "We're trying to make it a high-end happening."
To shield their patrons from pitted roads and electrical blackouts, developers have paid for their own infrastructure. Grupo Mapache, a Costa Rican developer that is building more than 20,000 low-priced condos in the Guanacaste area, has spent $2.5 million on roads and sewers. Península Papagayo has not only paid for its roads, sewers, buses and electricity but has even set up its own paramedics and fire brigade.
" We sell 'Costa Rica Lite': all of the upside with none of the downside," said Jeff Klein, a sales agent for the Papagayo project. "We're our own municipality."
The owners of Península Papagayo and two other high-end developments, Hacienda Pinilla and Reserva Conchal, even paid for that critical airport in Liberia, putting up $3 million of their own money in 2002 as a guarantee to persuade Delta to start direct flights. Continental and American followed.
EARLIER efforts to develop Guanacaste were mostly underfinanced. On a road near the town of Playa del Coco hulks the moldering 20-foot-tall concrete gate of Cacique del Mar, all that was built of a 500-acre development planned in the 1990's. Even this forlorn property has since had a change in fortune. Stephen M. Case, former chairman of AOL Time Warner, bought it in 2005, and Guanacaste is buzzing with rumors about what he plans to build on it.
At Hacienda Pinilla, hundreds of condominiums and villas are being built around 4,500 acres of nature preserve by the Atlanta-based owner, Hoover Gordon Pattillo, who bought the land as a family vacation homestead 30 years ago. Visitors to Mr. Pattillo's modest ranch, tucked inside a tree-lined grove, are greeted with a tequila-laced lemonade and a perch on a rocking chair overlooking the sunset.
" It was destiny," he said. "I had no idea what I was going to do with the land. We'd come down once a year and stay in the old farmhouse, which had no electricity or running water." In the late 1990's he began developing home sites. "We really had to work hard to sell those first villas," he said. Things have changed. Over two weeks last year, Hacienda Pinilla sold 43 Spanish colonial condomiums for $580,000 and up without any advertising.
The Costa Rica rush can carry hazards for the unwary. Jeff Hornberger, the international market development manager for the National Association of Realtors, cautioned that Americans buying in Costa Rica should be sure to buy title insurance and should be aware that real estate agents aren't required to be licensed there. "Ninety-five percent of the time we don't hear about people having problems," he said, but sometimes Americans "come on vacation and get overwhelmed and leave their brains at the border."
Many Americans who are buying now are looking for investments, eager to get in on the boom. But others simply love Costa Rica, with its warm seas and unspoiled jungle landscapes.
" This is my garden; look at this!" Jean Capezza, 59, said as she gazed down over the jungle to the sea from her perch at Reserva Conchal, an upscale golf-course-anchored development of 2,300 acres that will eventually have several hundred homes selling for $500,000 to $2 million each. Ms. Capezza, a retired administrator for Verizon in Boston, and her husband, Tony, 63, a retired public school administrator, bought a Mediterranean-style four bedroom condominium in early 2004 and spend seven months a year there.
Their house has already nearly doubled in value, but the downside of the real estate demand is the incessant grind of bulldozers nearby. The Capezzas fear more flights landing in Liberia, new condos up the hill, even the appearance of a Burger King in the nearby town of Tamarindo. "If we wanted the roads of Florida, we'd be in Florida," Ms. Capezza said. "We hope progress comes slowly. Very slowly."

Real Estate Prices Rise
By Robert Goodier
Tico Times Staff

The country is in the midst of a real estate boom and experiencing the effects of a maturing influx of construction projects and foreign investment. Though real figures are hard to come by in each region, a spot check with realtors revealed prices have risen around the country over the past year by as much as 20% or more, and buying trends are shifting to previously less sought-after regions, both because of a simple lack of availability in some areas and as a reaction to soaring prices.

Guanacaste
There is a movement away from the beachfront in the northwestern province of Guanacaste because most of the land has been bought and is not for sale. What is available is astronomically priced compared to nearby lots several street blocks from the beach.
Ron Douglas, owner of Surfside Properties (www.surfsidepropertiescostarica.com, 654-5567) near Playa Flamingo, on the northern Pacific coast, estimated the average price for a lot at $100 per square meter.
“ There’s a major difference between title property and concession property,” Douglas said. “Your average lot value is $550,000 (for 1,000 square meters) if you can find one that’s titled.”
Property titles and concessions are amongst the greatest issues plaguing real estate purchases, especially in the rural and coastal areas away from the seat of national government. Zoning plans have not been made for much of the country, and the strip of coastal land 50-200 meters inland from the high-tide mark cannot be owned; it must be “borrowed” in a sense, through a concession. Without zoning plans, however, neither titles nor concessions are granted. The titling and concessions process is slow and bungled by bureaucracy and a lack of government funds, which sometimes leads prospective owners to pay for the zoning plans themselves.Lots in Tamarindo, south of Flamingo, go for $950,000, Douglas said, “if you can find one.”
That “if” is his caveat for most beach front properties.“ Flamingo has no beachfront lots available, just condos at the back end,” he said. This, combined wit the scarcity in the midst of such high demand, has led to major subdivisions, such as hillside ocean-view lots, springing up to fill the void.
“ It concerns me, the number of subdivisions coming in,” Douglas said. “That might undermine the value of the existing ocean-view lots. I would recommend not investing in an ocean-view lot,” unless the purchase is not an investment, but something for the buyer to enjoy, he added.
Lately, he said, more buyers are in this category, meaning fewer buyers are speculators. He estimates the shift has been from 75% speculation a year and a half ago to 50% now. This clientele is bolstered by retiring U.S. citizens who shy away from the high prices in Hawaii and hurricane danger in the Caribbean.
“ People are looking to invest now and relocate when they sell out of where they are in North America,” he said, “There is a big demand fro condos – There are zero available in surfside, for example (because they are sold out).”
Off-the-beach two-bedroom condominiums cost about $175,000-250,000, and beachfront condos run from $475,000.
Buyers are primarily from the United States, predominately from California and Florida, judging by who looks at Douglas’ offerings online. He estimates the demand is 85-90% North America.

Hunting for Affordable Homes in Guanacaste
By María Gabriela Díaz
Tico Times Staff

The northwest province of Guanacaste has been highly coveted for its endless pastures, spectacular beaches and orange sunsets. These days investors of all nationalities want a piece of the pie – and the pie is not cheap.
Over the past two to three years, property in Guanacaste has soared. According to Scott MacDougall, owner of Century 21 at the Beach in Playa Hermosa (672-0273, c21@discovercostarica.com), on the northern Pacific coast, ocean-view lots in Hermosa ranged from $85,000-115,000 in 2003. Today, the same properties are valued at $255,000-400,000.
“ (Guanacaste) property value has increased with a decent consistency in the past two years; it’s directly related to the Liberia international airport,” MacDougall said, referring to Daniel Oduber International Airport, which started receiving international flights in December 2002 (TT, Dec. 6, 2002).
The opening of the luxurious Four Seasons Resort at Peninsula Papagayo in January 2004 also “helped to bring in a different clientele,” added MacDougall, who has 13 years of experience in the real estate business.