For real estate value, you need to know where to look. Today, many in the industry are looking to the coast.
News of the real estate market over the past six to eight months has come in two types: bad and worse. Headline stories about the subprime mortgage crisis and its deleterious impact on the world economy have become staples on newspaper front pages. The effects of that crisis on the real estate market — on individuals, businesses, investors, and the economy as a whole — have been deep and wide.
Still, it would be a mistake to believe that the real estate business, particularly the market for second homes and vacation properties, is moribund everywhere. In fact, if you look carefully, there are vibrant pockets where development continues at a brisk pace, both within the United States and beyond its borders. “There are still great opportunities in areas that maybe have not been the traditional markets,” says Mitch Creekmore, senior vice president of the Houston-based title company Stewart International and co-author, with Tom Kelly, of Cashing In on a Second Home in Mexico (Crabman Publishing).
An artist’s depiction of Cinnamon Shore, near Corpus Christi, Texas
Creekmore, not surprisingly given his international expertise, sees much of the most promising second-home activity — both in terms of the progress of developments and, importantly, the prospect for buyers to see their assets appreciate — happening outside the United States, in places like Mexico, Panama, and Costa Rica. “The international arena is still a viable investment alternative,” he says. Whether within or outside the United States, the second-home markets that seem to be doing the best have one thing in common: water. Which is hardly surprising given real estate’s cardinal rule for success: location, location, location.
From Mexico to Costa Rica and from Florida to Texas, we went on a search for some of the most appealing sundrenched and ocean-splashed second-home locales. Here’s what we found.
Texas-Size Appeal
When Jeff Lamkin looks at the coast of Texas, he sees Florida — well, sort of. “What Florida was 20 years ago, where everyone could afford a great vacation home on the beach, that is exactly what Texas is now,” says Lamkin, who is CEO of Sea Oats Group, an Atlanta-based developer.
A giant egret in flight off the coast of Florida
Lamkin should know. He has spent years developing coastal projects in Florida and has seen how prices for even the smallest lots have skyrocketed. A few years ago, the native Texan returned to the Lone Star State and was stunned with the quality, and affordability, of beachfront land. Not that there’s a lot of it available: “Only 14 percent of the Texas coast can be developed,” he says. “Most is tied up in state parks and places that can’t be developed.
Lamkin and his company have moved fast to snap up whatever land they could — in fact, he says that more than 80 percent of Sea Oats Group’s land portfolio is now in Texas. While Lamkin was quick to seize what he saw as an opportunity to purchase land, he has been decidedly methodical in developing his first project, Cinnamon Shore, located on Mustang Island, a Gulf Coast barrier island just 30 minutes from Corpus Christi. To a certain extent, Lamkin knew the location itself would be a sufficient draw: Outside magazine recently declared Mustang Island one of America’s top 10 beach getaways; the island boasts some of the country’s best bay and deep-sea fishing and is known as the fishing capital of Texas; and it’s a mecca for bird-watchers, who can view hundreds of species that either live on or migrate to the island. In addition, the island’s only town, Port Aransas, is a lively community of just over 3,000, rich with restaurants and arts venues.
Instead of just letting the island sell itself, Lamkin and his colleagues worked hard to carefully plan Cinnamon Shore as a new-urbanist development — one that emphasizes pedestrian-friendly neighborhoods and minimal environmental impact. Just up the coast in Galveston, Tofigh Shirazi is following the same philosophy.
The sun sets over Galveston Bay marsh.
Shirazi is the founder of Beachtown, located on the water on the east end of Galveston Island. Like Cinnamon Shore’s developers, Shirazi sees affordability as a big part of the allure of Beachtown. “Even though the rest of the country is suffering right now, we are still below the national prices for beachfront properties,” he adds. Equally important, he says, is Beachtown’s proximity to Galveston, which he terms as being within “European walking distance,” or about one mile. “The city of Galveston is a treasure that a lot of people don’t know about. It’s the largest historic district in the state of Texas,” he says. “It’s hard to find anyplace in the country where you have a historic opera house right next to you.”
Of course, a development called Beachtown has to have some connection to the water. Its good fortune is to be located on a beach that, unlike many around the country, is actually growing rather than eroding, thanks to beneficial tidal shifts. Besides wide, and growing, beaches, Beachtown boasts huge dunes and proximity to protected land that will never be developed. “The uniqueness of the project is that you are right in the middle of a beautiful preserve,” says Shirazi.
Costa Rica’s Natural Paradise
Golfito, a town on Costa Rica’s southern Pacific coast, is surrounded by forestland, all of it protected as parkland. For years, James Lynskey would travel to the natural paradise to take advantage of its great sportfishing — particularly for sailfish, marlin, and tuna.
A home in Beachtown, on
Galveston Island.
“I’ve never heard anyone describe it as anything but magical or mystical,” says Lynskey. But to the developer, the town itself did not equal its spectacular surroundings.
For decades Golfito, located on Golfe Dolce Bay, was home to the headquarters of Chiquita Banana, which built an impressive port facility as well as housing and entertainment venues, including a bowling alley, for employees. But after Chiquita Banana abandoned its Golfito operations in the mid-1980s, the company town deteriorated, Lynskey says.
“There was this beautiful town, and for 20 years there was very little maintenance and it was falling into disrepair,” he says. “I was doing some developing up the coast and I would come down twice a year to fish and say, ‘This is a shame.’” Lynskey, a developer with more than 20 years’ experience, is hoping to breathe new life into Golfito with the Escondida Bayside Residences, Marina Village, and Yacht Club, which broke ground last year and will ultimately feature up to 450 residences — both primary and second homes — as well as a marina with slips that will accommodate boats ranging from 50 to 220 feet long.
Lynskey says Bahia Escondida will have luxury amenities like spas and upscale restaurants and, importantly, will have plenty of space that is accessible to the public. He says the development is also keenly aware of the need to be environmentally sensitive. “The No. 1 seller [in Costa Rica] is the environment,” says Lynskey. “People come to see the rain forest and the birds, and the last thing we want to do is destroy that because that gives it value.”
An artist’s rendering of the Escondido Bayside Residences, Marina Village, and Yacht Club
That same approach lies behind the development of SeaSide Tamarindo, in northern Costa Rica. Located on the Nicoya Peninsula, on the country’s golden Pacific coast, a surfing haven, SeaSide Tamarindo is designed to take full advantage of its beachfront location. Each of the property’s condominiums has an unobstructed view of the ocean and a balcony where owners can enjoy the sights; and each of the two- and three-bedroom villas is situated just steps from the sands of Tamarindo Beach.
Marrying Luxury and Location in Florida and the Bahamas
The ability of water-based properties to weather the current real estate storm plays out in the U.S. market as well, where some geographic pockets have been relatively unaffected.
Sunny Isles Beach, Fla., just north of Miami, has not felt the full brunt of the market slowdown, in part because it is still very much a coveted location on the water. Perhaps more important, nearby Golden Beach is one of the most affluent areas of the United States, attractive to buyers from within the country and overseas. “People want to be here, and certainly the weak dollar is making it more attractive for Europeans and South Americans and people from Eastern bloc countries, who are wealthy now,” says Avra Jain, who is developing an ultra-high-end condo tower called Regalia on the north end of Sunny Isles Beach.
The turquoise waters of Great Exuma, in the Bahamas
Regalia’s price point starts at $6.5 million, which gives buyers an entire floor of the building and 360-degree views encompassing the Atlantic Ocean, the Intercoastal Waterway, Fort Lauderdale to the north, and Miami to the south. To take full advantage of those vistas, Regalia has included 2,100 square feet of terrace space with each of the 40 units, to go along with the 5,500-plus square feet of interior space. “We wanted to create a unique indoor-outdoor experience,” says Jain. That approach extends to the building ’s amenities, which include concierge services, an infinity pool, tropical gardens, and private beachfront cabanas.
Offshore, new oceanfront developments in places like the Bahamas are catering to a similar group of affluent second-home buyers. As with south Florida, the recipe is equal parts unique natural location and luxurious amenities. The developers of Crab Cay, in the Bahamas, have located their project on a private island just off the coast of Great Exuma. Crab Cay combines white-sand beaches and turquoise waters with a luxury spa, gourmet restaurants, and villas and estates designed with a Mediterranean theme. In addition, Crab Cay has a natural harbor that can accommodate even the largest of yachts; those arriving by boat will be met by a concierge who will attend to all their needs.
Owners in the Regalia Tower will have a magnificent view of Sunny Isles Beach.
A “Sanctuary for the Senses” in Mexico
For buyers looking for a place on the water in Mexico, there are always options, particularly in the high end of the market. One of the reasons real estate development continues relatively unabated in select parts of Mexico is increased interest from Asia and Europe. Singapore-based Banyan Tree Resorts and Hotels, for instance, is working on a project called Mayakoba, just 30 minutes from the Cancún airport, near Playa del Carmen. “From a business development point of view, Banyan Tree’s expansion into Mexico, starting with the Mayakoba project, strengthens our position as a global player,” says Ho Kwoncjan, Banyan Tree’s managing director of design services. “Our upcoming five resorts in Mexico will enable us to tap into the long-haul markets from Europe as well as short haul from North America.”
Banyan Tree was attracted to the Yucatán Peninsula coast because it offered visitors, who will include both second-home owners and hotel guests, what Kwoncjan calls a “sense of place.” In the case of the Mayakoba development, which currently includes four interconnected luxury resorts — Banyan Tree, Viceroy, Rosewood, and Fairmont — there’s a lot to work with in that regard. “Mayakoba — being located along a scenic coastline blessed with an idyllic climate, vibrant coral reefs, and thriving mangroves, as well as numerous flora and fauna species — offers qualities that appeal to travelers seeking a sanctuary for the senses.”
When it comes to Banyan Tree Mayakoba, those natural attractions will be augmented by unique spa facilities, private pools, meditation areas, and Asian cuisine, all of which Kwoncjan says will reflect the property’s unique location. Of the 132 villas, 50 will be for sale to people looking for second homes.
A turtle takes a swim at Mayakoba.
“Our resorts are designed to blend into the natural surroundings, using indigenous materials whenever possible and reflecting the landscape and architecture of the destination,” says Kwoncjan.
On the other side of the country, in San Jose del Cabos on the Sea of Cortez, there remains considerable interest in second homes and vacation properties as well. Mision La Serena, for instance, is part of a large master-planned development that offers owners access to a large marina, a Jack Nicklaus–designed golf course, a spa, and plenty of other amenities.
Indeed, whether it’s Mexico or Texas, Costa Rica or the Florida coast, bright real estate spots are out there to be discovered. Often, all it takes to find one is a nose for salt water and sand.
