Guys In The Zone: Costa Rica Real Estate

Hydroelectric power is BIG in Costa Rica.

The Costanera Highway, The Caldera-San Jose Highway, The Cortez Hospital, The International Airport and The Diquis Hydroelectric Dam… it is easy to see that Costa Rica is serious about improving its infrastructure and securing a bright future.

Over the past decade, the dramatic increase in tourism and investment has sparked a bit of a power-struggle between proponents of economic growth and socio-environmental protection groups.  In this case, the “power” is the proposed billion dollar hydroelectric project called “El Diquis” near Palmar in the Osa Peninsula.  This isn’t recent news, but I believe it is worth mentioning as it will affect life in various ways in the southern Pacific zone of Costa Rica.

The Zone Is HOT

This large-scale project, facilitated by I.C.E. (Instituto Costarricense de Electricidad), is calling for the construction of a dam on the Térraba River in the greater Boruca Canyon. The dam will create a lake equaling approximately 25,000 surface hectares (over 6 million acres), the largest of its kind in Central America.  By comparison, Lake Arenal is roughly 8,500 hectares.

This station will generate up to 630 megawatt units capable of providing over one million families with electricity!  This project is about Power, both electric and economic.  According to a Continuum report commissioned by the Costa Rican government, Read the full story

A longtime associate in Costa Rica real estate stopped by our office after being out of the country for an extended period.  One of his first questions was, “So, what’s going on with the international airport?”  My response was, “What airport?”  He found that amusing considering the broker he just spoke to was talking it up like the asphalt trucks were lined up and ready to pour the tarmac.  We both had a good laugh.

I’m not saying major infrastructure projects aren’t being completed here in Costa Rica.  There have been many projects completed in the past two years—

• San Jose-Caldera Highway
• Quepos-Dominical Highway (affectionately known as, “The Dirt Road”)
• Re-paving of the Dominical-San Isidro Highway
• The Bridge at San Buenaventura
• The Bridge at La Cusinga (almost)

From that list it is easy to see the progress and the progression.  What I mean by “progression” is the land routes need to be completed first before an international airport is built in The Zone.

International Airport In Paradise?

Rumors to Reality

The list of rumors regarding the southern zone Airport is long and varied— operational for international flights by 2010, moving to a new site in Sierpe, moving south closer to the border in a joint venture with the Panamanian Government… to name a few.  The reason I am sharing this news story released by La Nacion a few days ago and forwarded by a reputable broker in the area is it actually sounds like the government has a (more) realistic plan.

In summary, Costa Rica’s third international airport will be located in the same exact spot currently occupied by the Palmar Regional Airport.  To comply with Aviacion Civil (the FAA of Costa Rica) standards, the runway will be extended 400 meters and facilities for immigration, customs, and security will be constructed.  The “facilities” will include extra hangers, buildings, and even a terminal that will provide hangers and services for commercial shipments.  The price tag on this project is quoted at $25 million dollars, half the proposed cost of the mega-terminal in a new location.  They did not release a projected completion date, but I would be shocked if it was ready in two years.

One of the most interesting points in the announcement is the Minister of Tourism’s call for more hotels to be built in the area.  It is a similar point echoed by the longtime mayor of the Osa Canton, Alberto Cole.  It’s safe to say, major hotel projects are going to get the green light, moving forward.  One of the more interesting things to me is exactly how they are going to accomplish this with no Plan Regulador (e.g., zoning plan) for the area?  Where are these new hotel-resorts going to be located?

What Does It All Mean?

It means that at some point in the future there will be international flights landing in Palmar.  It means there will be more hotels, and the beaches will be alive with activity.  It also means there will be many, many more investors buying in the area.  People look at me funny when I say this area is poised for another b-o-o-m, but all of the regional signs—improved access from every direction and significantly lower property prices— point that way.

It means property in areas like Tres Rios and San Buenaventura, once thought of as “too far south of Dominical” will be a 15-minute taxi ride from the terminal.  Check out Tres Rios Estate and Tres Sandalo 17 as examples.  We only have a few listings in Palmar (see photo left), but I guarantee that number will double before the high season.

Most of the expats in The Zone have adopted the “I’ll believe it when I see it” philosophy.  We have also been surprised by the recent completion rate of infrastructure projects.  Safe to say, the completion of the 3rd International Airport in Palmar will be the crown jewel for the region.  If you are interested in buying Costa Rica real estate, this recent news bodes well for smart investors.

Writing a blog about Costa Rica real estate has its perks. We’ve got readers out there who are doing some pretty creative projects and we don’t even know about them… until they get ready to go to market with their project. Such is the case with Sierpe Del Pacifico (SDP). Fred and his son Cassidy approached Rod & I about a month ago to tell us about their project in Sierpe. I think that this type of inquiry wouldn’t normally have much interest to us Guys, but Fred had written such an eloquent and well crafted introductory e-mail that we were intrigued.

Sierpe is a bit out of the way, on the fringe of “The Zone”. I’ve also heard that it is hot and buggy. I’m not much for hot and buggy, but in truth I couldn’t speak from personal experience regarding the place, so I kept an open mind.

What Fred & Cassidy have done is they have formed a father & son team and are passionately developing a piece of property that offers what, I suspect, a lot of readers of this blog are looking for: a truly unplugged, solar powered, bio-digesting, boat access project, surrounded by some of the best fishing, both fresh water, brackish and deep sea, in the… country? World? I don’t know, but you always catch big, tasty fish when you go out with them.
Read the full story

Rod & I sold a piece of property yesterday and I’d like to tell y’all about it. Be ye buyer or seller I think that it will be informative and hopefully helpful.

The couple came to us from a Canadian referral, primarily to view the San Buenas Golf Resort. I’ll call them the Schmerds.

After viewing the course and deciding that it was for them – they’ll likely get a clubhouse condo for investment and income generation. All this plus the fact that they like to golf made that a no brainer. They asked if they could see some general market properties as well.

We started in Uvita with some lovely whales tail view properties. Bella Vista Lot #6 has occupied “The Best Deal in Uvita” slot for some time, but was recently nudged into second place by a fire sale opportunity that we had just received.

The Schmerds LOVED #6, with its beautiful ocean and jungle views and absolute privacy. A little over 2 acres and end of the road quiet.

From there we went to Bella Vista #5 which is a re-sale and was formerly “Ben’s Favorite Uvita Property” but it too has been relegated to the #2 position by another property that I’ll describe here in a minute.  Read the full story

I bumped into a developer today that told me of some inspections that are going on in Costa Rica’s southern zone.

Since this is all just now happening I’m only able to report on what I know and have found on some news sites on the net.

There was apparently a large construction site that was shut down in a project that was called both “Hermosa Arriba” and “Playa Hermosa Arriba”. The project was cited for not staying within the confines of it’s building permit. The project went whipping right by its permitted size of 5,381 feet to construct a house of 37,673 feet.

Here are a couple of links to what I’ve found so far:

• AM Costa Rica’s report – English
• La Nacion (Sorry, the linked page has been deleted) – Spanish

The La Nacion article is the most in depth, and actually was written prior to the current inspections. The article cites the above mentioned oversized house.

The El Financiero’s report quotes a fellow as saying that “the coastal mountain range is bleeding”.  Evidently some aerial photos played a part in discovering developments that have cut roads and building sites into these jungle clad mountains without permits, or with questionably obtained permits.  One of the big concerns is the orange clay runoff that washes into the Pacific and that then chokes the coral.  This issue is likely to continue with some heads rolling as the mayor of the Canton de Osa is being investigated for his records of these events.

I have received some inquiries from concerned property owners as to what effect these inspections and development/construction closures may have on them.  So far I don’t see any concern to any of our clients.

The effect will most likely be that the land deals here will be a bit more arduous in the due diligence stage.  This has got to be a good thing since it is nature’s radical presence here that has attracted us all to The Zone in the first place.

The so far sketchy info and street talk that we are hearing here is that there are numerous projects being subjected to well deserved scrutiny. I’ll post more as I hear it.