Peru Woos Hotel Investors With Easy Tax Credits and Ready Development Loans

The government of Peru, a western South American republic with a population of 30 million, has launched a campaign to attract foreign hotel investors. The country, one of the smallest on the continent with a land mass of only 497,000 square miles, are offering easy tax credits and quick development loans.

Andina, an online news outlet owned by Peru News Agency in Lima, reports the country's successful mining industry is providing a pipeline for higher incomes, leading to more domestic travelers and a demand for more quality hotel rooms. Peru is following Brazil and Colombia in courting outside capital for its tourism and hospitality industries.

"The government is working to promote tourism because we know it's an activity that creates jobs enormously and also brings investment into the region," according to Claudia Cornejo Mohme, Peru's Deputy Minister of Foreign Trade and Tourism

"The flow of tourism is very positive for us. When we speak about tourist infrastructure, we have a lot of room to grow," the official said.

Previously, many of the hotels in Peru were state-owned and managed by third parties. But today, the country is inviting outside investors to help grow the industry,

According to Luis del Carpio Castro, head of projects, tourism and real estate for Proinversión, a Lima-based private-investment promotion agency, foreign investors who plan to invest  more than $5 million in Peru can receive tax incentives and tax returns even before they complete a total investment transaction or complete a proposed development.

He says current loan interest rates run at about 6% to 6.5% and can extend up to 10 years.  Investment requires 40% to 50% loan to value.

Lost In Time On the Dalmatian Coast

Hvar has a stupendous natural back-drop. (Courtesy Croatian Tourist Board)

Twenty years ago, this coast was trampled by the footsteps of soldiers, and pock-marked by the scars of war. Now, though, the Dalmatian Coast of Croatia - which wasn't yet an independent country in those days - has taken its place among the famed "coasts" of Europe.

Here, the ambience is an endearing mix of ancient architecture and buzzing Vespas, of cliffside villages and mega-yachts, of cobblestoned streets worn smooth by the ages and nightclubs that never close. Of some 350 miles of beach and a thousand islands (17 of which are inhabited), each with its own distinct history, architecture, and special flavor.

The biggest city on the Dalmatian Coast is Dubrovnik, a white-washed, cliff-hugging, seaside city now considered Europe's most beautiful by many. Overlooking the Adriatic from behind ancient fortress walls, Dubrovnik's streets have been trod by a dozen conquerors over the ages, from the Romans to the Venetians to the Austro-Hungarians to the Germans. Many have left their marks on the city's architecture. The Roman influence, for example, is evident in Gundulic Square (which transforms from a café-centric social center at night into a colorful farmer's market by morning), and the orange rooftops are reminiscent of Tuscany.

In many of Dubrovnik's ancient streets, you'll be enveloped by the aromas of jasmine or lemon trees, and pushcart vendors selling the ubiquitous olive soap. And you'll come across fascinating cultural clashes every time you turn a corner, from the stolid medieval monasteries to the eclectic bars filled with millionaires just off their yachts.

The ancient city of Dubrovnik juts out into the blue Adriatic. (Courtesy MIR Corporation)

The islands of the Dalmatian Coast are linked by a ferry system, making many of them accessible from Dubrovnik. One of them is Brac, which, until recently, was known mostly for its white-marble quarries. Now, though, Brac's biggest signature is its beach, called Zlatni Rat - "Golden Cape" - populated by the beautiful people. Your ferry will dock at the small town of Bol; from there you can head into the mountainous interior for some exploration.    

Hvar is considered the "hippest" island on the Dalmatian Coast. As your ferry edges into Hvar harbor, you'll see thousand-year-old towers and alleys back-dropping a fleet of yachts the size of football fields. And you'll smell the island's ubiquitous aroma of lavender, growing wild all over and spilling from the tops of pushcarts.   

On the island of Korcula, the predominant scent is that of pine. Korcula is anchored by the town of the same name, with a stone-wall-enclosed Old Quarter dating back to Venetian rule in the Tenth Century. In this part of town, the streets are narrow and winding and dotted with green windowsills and shutters, and adorned by arched bridges and ornate balconies. The town of Korcula claims to be - along with a dozen other European towns - the birthplace of Marco Polo.

White walls, red rooftops, green shutters. (Courtesy MIR Corporation)

The Dalmatian Coast is filled with beautiful contrasts. If you want to bathe in the aura of European royalty and their mega-yachts while sipping a drink in a waterfront bar, you can. If you want to hike in the mountains, in wildflower-filled countryside without another human being, you can. If you want to wander Medieval alleys where not much has changed in a thousand years, you can. And if you want to find a secluded spot on a beautiful beach, you can.

(Miami, FL) - Grove at Grand Bay

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Terra Group, Miami's leading real estate development company, is pleased to unveil its most innovative development to date, and one that is destined to be an architecturally-significant landmark in South Florida: Grove at Grand Bay. In collaboration with the award-winning architecture and design firm Bjarke Ingels Group, also known as BIG, and landscape architecture legend Raymond Jungles, Grove at Grand Bay will leave an unmistakable imprint on the prestigious South Bayshore Drive community, redefining luxury and breathing new life into Coconut Grove for decades to come. Upon completion of construction, the project will also receive LEED Certification with a gold designation, the first such structure in Coconut Grove.

"Grove at Grand Bay's impressive aesthetic and unparalleled service are tantamount to the evolution of Coconut Grove and raises the bar to Olympic heights," says Pedro Martin, Chairman, Chief Executive Officer and Founder of Terra Group. "Within the next three years, the area will have completely evolved and Grove at Grand Bay will have proven to be the bellwether of profound change."

Widely regarded as one of the most important architects to watch, Bjarke Ingels seamlessly translates Terra Group's grand vision of designing an aerie imbued with a unique sense of place. To say the results are stunning is an understatement: two glass towers in a pas de deux appear to float over Raymond Jungles' lush, canopied oasis, beckoning to Biscayne Bay and beyond. Renowned for his creative and ecologically sensitive landscape architecture, Jungles' design capture the natural beauty of the neighborhood and magnify it with ample green spaces.

Rising 20 stories over the bay-front, Grove at Grand Bay will showcase 96 elegant and expansive residences with panoramic views from every angle. Whether outdoors in Jungles' verdant gardens in the shade of the buildings' twisting facades or inside the glass jewel box-like homes, residents will fully experience and relish living amid the open air. World-class amenities include private butler service, private elevators, two-car garages, wrap-around terraces, rooftop swimming pools, a wellness spa and fitness center, a pet spa and much more.

"The powerhouse design team of BIG and Raymond Jungles makes this South Florida's most exciting new development," adds David Martin, President and Chief Operating Officer of Terra Group. "Our 'think tank' model embodies a design-driven approach to development, avoiding pitfalls and upending assumptions developers typically encounter when building a residential property. We pride ourselves on creating environments where people are viscerally and emotionally affected by their surroundings; we are about intelligent luxury."

BIG, led by Danish architect Bjarke Ingels who recently received Wall Street Journal's 2011 "Innovator of the Year in Architecture" award, is creating the residences and amenity spaces. Raymond Jungles, the landscape architect who designed the grounds at Lincoln Road in Miami Beach and the New World Symphony's rooftop garden, will produce the outdoor spaces, including terraces, pools and walking paths. Rounding out the group is Nichols, Brosch, Wrust, Wolfe + Associates who provides architectural and planning services.

The interior design of the residences at Grove at Grand Bay will be just as spectacular as the building's exteriors. With an open flow-through floor plan, each residence will showcase 12' ceilings and 12' floor-to-ceiling windows, a first among Florida developments, and spacious outdoor terraces with wraparound balconies that create a continuous indoor/outdoor living environment. Additional residential features include private elevator access to individual units, Italian-designed kitchens, Miele appliances, and Dornbarcht fixtures.

Pricing Back to 2007 Levels in Six Top U.S. Apartment Markets

The US apartment market is making a strong recovery. In fact, in six of the top markets, pricing has recovered to its peak-- reached in December 2007--or gone beyond it, according to Real Capital Analytics' Commercial Property Price Indices for second quarter 2012. The chart appears in RCA's US Capital Trends apartment report for August.   

The most significant thing about RCA's Commercial Property Price Indices, says Dan Fasulo, managing director at RCA, is that the top four markets--Boston, Seattle, San Francisco and Manhattan--are known for high tech and Boston has exceeded its peak pricing by 13%.

Although August can be a sleepy month for commercial real estate, this past August, sales of US apartment properties were $6.4 billion, rivaling May and June as the most active month this year, according to RCA, which only keeps tabs on properties worth $2.5 million or more.

Sales of garden apartment properties in August totaled $4.4 billion, up 76% year-over-year. while sales of mid and high-rise properties were down 26% year-over-year, according to RCA.

Still Hunter, III, senior vice president of investments at Marcus & Millichap in Ft. Lauderdale, says the reason that the sales volume for garden apartments was higher than that for mid and high-rise apartments "is that there are lots more garden apartments than mid and high-rise apartments  in the world."  There are fewer mid and high-rise apartments because rents need to be higher than for garden apartments since they are more expensive to operate, he says.

Lakeside Villas at Kendall

Nationally, cap rates in the apartment sector averaged 6.1% from May through August and average unit prices trended higher, although appreciation seems to have slowed during the summer months, according to RCA. With fewer trophy properties driving mid to high-rise volume and prices, average cap rates did go slightly higher in August.

In South Florida, "Class A multi-family properties can trade for a 4 cap, as high as a 6 cap for a B apartment asset and even a 9 cap for a low C asset," says Hunter. These cap rates are about the same as a year ago, although maybe slightly lower, but prices per unit have increased because there are higher rents, less vacancies, no concessions and ancillary income from apartment properties in South Florida, he says.

In South Florida, there are fewer distress sales in the apartment market, a greater demand for product and more favorable financing, which drives values, says Hunter. Most distressed deals have been worked through and for the ones that are still around, there is enough demand that they are no longer trading at a big discount, he says.

"I have a deal now called Lakeside Villas at Kendall, a 190-unit development, which was a failed condominium conversion," says Hunter. "The development, which is now stabilized, is in bankruptcy and will be sold at auction on October 9th for about $15 million, or $79,000 per unit, which is a market price," he says. The way that Hunter knows that he will get a good price? "There is a stalking horse bidder who will pay $14,250,000 for the whole development," he says. "A year ago, we had offers for millions less," says Hunter.

The rental market in South Florida is very strong, says Hunter. "Rents (in South Florida) will continue to grow as the economy improves although maybe not at the same pace," as over the last year or so.