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Anatomy of a Rosarito Real Estate Success Story

Riviera Sets a New Condo Benchmark Along Coastline

By Brian Flock

The western coastline of northern Baja will be a fascinating case study of real estate booms for years to come.  Countless oceanfront condo proposals have appeared within the past five years with the biggest flurry during 2005 and 2006.  New developments continue to appear in 2008, well into a US real estate downturn that has drained American's of much of their buying power.  Yet in this tumultuous market, one local development stands out for setting a benchmark of success:  Riviera de Rosarito.

Why is Riviera a bona fide Rosarito success story?  Quite simply because of what makes it so seemingly "ordinary."  This new project delivered on what it promised (including amenities) and it delivered virtually on time.  The project has already issued 20 titles to buyers on its 52 units with about 15 more in process.  This is a significant contrast to sellers that discourage buyers from taking title and who promote the illusion that simple possession is sufficient for buyers' legal purposes.

Riviera was developed by Inmuebles y Desarollos Arnaiz, a family of Rosarito locals for more than 50 years and which is now headed by Ramon Arnaiz.  I interviewed Mr. Arnaiz to investigate the key success attributes of Riviera's achievement which I personally summarize as:

         1.  Track record of delivering on past commitments

              The Arnaiz family has developed residential and commercial real estate in Baja for over 25 years.  Their history includes La Paloma, Villas del Mar, and various shopping centers throughout Tijuana and Tecate.  The family has trusted in the experience of Architect Andres Zapata who has been managing their residential projects since nearly 1980.  When it came time for a project manager for Riviera, Arq. Zapata was the clear choice for them.

              Their commercial construction was also a major influence to deliver on their commitments.  Retail chain stores require penalty clauses for late delivery as a matter of course in their contracts.  In concert with their development partner, Artek of Tijuana, they have developed a rhythm of construction that is based on rigid schedules, guaranteed material sources (and prices), and trusted project management at each site.

        2.  Solid, outside financing

             Riviera already had started construction and had a sales office when officially launched in April 2006.  A business line of credit from Merrill-Lynch in advance of sales allowed the family to be much less dependent on buyer deposits than other developers in order to meet their schedule.  In the final analysis, the outside financing and buyer deposits ended up funding the project approximately equally, according to Arnaiz.

       3.  Squeaky clean title

            In 1956, Ramon Arnaiz' grandmother bought a home on a large lot on the beach of Rosarito and that became the summer home of the extended family for more than two generations.  It really doesn't get much cleaner than grandma's house unless you go back to the Mexican Revolution.  That said, Riviera took away any remaining doubt from buyers' minds by taking out a First American Title policy on the property that had been in the family for 50 years.  Additionally, the Federal Zone concession had been obtained in 1993 so the family had no question about who would control the beach area in front of the property.

       4.  Great timing at the right price

            There is no doubt that Riviera hit the scene with spectacular timing, a common ingredient in success stories.  Long-time agents recall the launch of Riviera with its ample condo floor plans and value-pricing for modern finishes.  Although launched in the "off season," the oceanfront market was still relatively hot.

             Whereas some sellers had raised condo prices into the realm of $400 per square foot, Riviera opened their offering at a modest $200 per square foot with nice, modern finishes on the longest sandy beach in Rosarito.  The majority of the inventory was quickly snapped up by individual buyers with minimal marketing and multi-unit investors were avoided since condo flipping was already proving to be problematic at some developments in spring 2006.

             In summary, Riviera is noteworthy simply because it delivered on its commitments and is delivering property titles, both rare commodities in this market where promises are 100% free and clean titles are hard to find.  The bar has been raised for oceanfront condos in Rosarito!


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