Up and Down The Coast, Condos Are The Craze

The Beach Times
By Leland Baxter-Neal


If real estate development in Costa Rica has taken a turn, it has turned towards condominiums.

Driven vertical by both increasing land values and limited space, projects in the Pacific Coast’s most booming destinations — Jacó in the Central Pacific and Tamarindo in Guanacaste — are going very vertical.

“Everything here is now seven stories on up to 12,” said Gary Clarke, a realtor with Tamarindo-based ABC Realty.

In Jacó — where an in-progress zoning plan sets limits at a liberal 25 stories along its beach (see Regional Briefs) — one project under construction is set to reach 17 stories, while another by the same developer will be 15.

Both projects are being carried out by Vista CR , perhaps the region’s most prolific condo developer second only to Daystar Properties.

Daystar, run by a Michigan-born developer named Pat Hundley who moved his family to the Central Pacific a few years after falling in love with the region during a family vacation, has nearly 400 condos on the market and approximately 400 more that will be built over the next three to five years, all in Jacó.

The most ambitious of the projects is The Pacific, set to tower over Jacó’s popular beach entry known as Bohio at 13 stories and containing two floors of commercial space, a third-floor pool and a casino. Another project, called Diamante del Sol, will total 156 units, spread between two eight-story towers and three ten-story towers.

According to Harmony Hoeffner, a Daystar sales representative, Diamante del Sol is already three quarters sold, while The Pacific is set to begin sales this spring. Between Daystar’s seven condo projects, prices run between $170,000 to $1 million, Ms Hoeffner said, while an average two-bedroom, turnkey beachfront condo runs between $45,000 to $499,000.

“We’re running out of prime inventory” Ms Hoeffner said.

Vistas CR, which has built one project — the eight-story, 28-unit Vista Mar — and is under construction on two more that will include a little more than 100 condos: Vista Las Palmas (17 stories) and Vista Azul (15 stories).
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EXPANDING MARKET: Construction site for a new condominium tower behind the new ICE office in downtown Jaco. The Central Pacific town boasts some of the coast’s most ambitious condominium projects, with estimates ranging between 1500 and 2500 units.

In addition, Ramada is well into construction on seven ten-story towers that will add 264 condos and 14 penthouses to the market, and a luxury hotel. Not to mention dozens more projects carried out by other developers in the region.

The exact number of just how many condos in Jacó are up, permitted for construction or being planned is hard to come by. In municipal records, some projects are recorded as condominiums, other as apartments, and others simply as residences.

Educated estimates for the combined amount of those built and those under construction or in the planning phase, however, run between 1500 and 2500 individual condos.

“The market we are attempting to penetrate, the Baby Boomers, they are just starting to retire, and are retiring in the millions every year,” said Brad Sanson, who owns Vista CR . “These people by-and-large are looking for a vacation spot or retirement home. Costa Rica is rated in the top three or five in the world for retiring.”

Nearby Central Pacific communities such as Playa Hermosa and Esterillos, both south of Jacó, have seen significant condo development, “Esterillos, that’s booming,” said Brian Smith of CR Beach Investment Real Estate. Underway in that area are two projects that in addition to condominiums, houses and a name-brand hotel (to be announced), both feature full golf courses.

Heading north along the Pacific coast, Larry Albright of Pacific Coast Realty said he estimated between 40 and 50 condos between Flamingo and Potrero, where a two-bedroom, two-bath ocean view condo goes for between $298,000 and $359,000.

Mr Albright said his area has slowed down some after the high volume sales of recent years spurred by the opening of the Daniel Oduber International Airport in Liberia.

“It’s a little slower market,” he said. “We have lots of condos and few buyers.”

Les Nunez, of First Realty, much farther north in Guanacaste, said in his area, which encompasses Playa Hermosa, Playas del Coco, Ocotal and Playa Panama, has the opposite problem.

“There’s no inventory,” he said. “I’ve got five condos coming on the market, and by February of next year they’ll be sold out.”

In Tamarindo, set south of Mr Albright and Mr Nunez, the number of condominiums is “in the thousands,” said Gary Clarke, with Tamarindo-based ABC realty.
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“What I’m seeing is there is a boom going on here in the condominiums. There is more coming every day,” Mr Clarke said, noting that a two-three bed condo averages about $350,000 to $550,000, “possibly with an ocean view.”

“I’m a little concerned that, with the slowdown with the sub-prime market, who is going to be buying all these condos.”

Mr Clarke said that he has seen fewer buyers in his area, something he attributes in part to out of control development, and infrastructure problems, as well as the highly publicized water pollution problems.

“Our office has concerns that the growth and development is a little beyond what the community can deal with,” Mr Clarke said. “It’s a great community, it’s just going through growing stages.”

Jacó and Tamarindo, both once sleepy surf towns, have been the focal points for the real estate booms of the Central Pacific and Guanacaste. Rapid growth has put development at the edge, or beyond, what local infrastructure can handle.

In Jacó, large projects are currently being denied water availability permits because of a lack of pipe infrastructure to feed them, said Mr Sanson of Vista CR.

According to Mr Sanson, local developers in Jacó are in talks with the Instituto Costarricense de Acquductos y Alcantarrillados ( Costa Rican Institute of Water and Sewers, or AyA) to create a trust fund with private money to build more water infrastructure.

This would follow a similar deal recently hashed out in Guanacaste where a group of developers agreed to spend $8 million on water infrastructure works in order to bring more connections to the Playas del Coco area.

In Jacó, meanwhile, the Central Pacific Chamber of Commerce — founded last year by Mr Hundley of Daystar — has partnered with the municipality to pave 2.2 kilometers of local roads, as well as equip a planned municipal police force.

“There’s an opportunity here to have an impact that you can’t in the States,” said Mr Hundley, explaining why he came to Costa Rica. “Here there’s an opportunity not only to be a developer, but a leader in your community.”