MEXICO,
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LATEST REPORT
December 21st, 2000




 Mexico
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Juan Francisco, Leticia (Manager) and Arq. Manuel Diaz Rivera

Interview with the Díaz family
Read our exclusive interview


Juan Francisco Diaz Rivera, Leticia Díaz Rivera y Arq. Manuel Diaz Rivera


Contact :
P.O.Box 36
Cabo San Lucas
Baja California Sur - MEXICO
Tel: (52-114) 302 02
Fax: (52-114) 313 48
E-mail: lety@pedregal.com
properties@pedregal.com
Website: www.pedregal.com

Areal view of Pedregal de Cabo San Lucas

1. History of Pedregal

Creating a community to capture the views of both the Sea of Cortez and the Pacific was the challenge architect Manuel Díaz Rivera undertook when he purchased 360 acres of barren land in 1974. His vision of a well planned quality development has emerged as the most prestigious neighborhood in Cabo San Lucas. Today this tract of land is known as Pedregal de Cabo San Lucas. Pedregal is a gated community with cobblestone streets and a distinct colonial flavor which brings old Mexico and the modern conveniences to the ever growing Cabo San Lucas.

Three generations of Díaz Riveras make Pedregal their home and continue to develop the Pedregal with a hands on policy. The Díaz Riveras are dedicated to providing the highest quality improvements. They are very oriented toward the esthetic aspects of the development as can be witnessed in the numerous gardens and extensive stone work seen throughout Pedregal . Other amenities include a professional tennis club and the commercial opportunities of Plaza de San Lucas.

A Homeowner's Association was formed to protect the quality of Pedregal and the investment of the homeowners. The Association includes an architectural control committee which approves all construction and employs a staff to keep the streets, green areas and beaches clean. Pedregal is a gated community with a twenty-four hour guard presence. Homeowner's Association dues are assessed by the square meter of the individual lots. Average dues for homeowners per year are $600.00 Dlls.

There are over 265 existing homes within Pedregal which range in size from 1,500 square feet to 23,000 square feet. 628 lots have been developed. For sale are new homes beginning at $240,000.

Within Pedregal is ANDALAYA at twenty unit condominium complex. Condominium prices begin at $160,000.

A wide variety of lots, developer owned and re-sales are available with prices beginning at $60,000. Financing is available from the developer with 30% down.

Pedregal prides itself on being a community of friends and neighbors since 1974. With 24 years of controlled excellence, this development is continuing it's marketing of prime real estate at affordable prices.

The Pedregal maintains three sales offices which deal only with properties located within the Pedregal development. An in town office located next to Goodies Gifts in the Plaza de la Danza and two offices on site one at the bottom of the hill and one on top. Open from 9:00 a.m. - 5:30 p.m.

Tels: (52-114) 302 02 / 313 41 / 303 13 / 313 59 / 319 45
Fax: (52-114) 313 48

Internet: http://www.pedregal.com
Email: properties@pedregal.com

Ö Pedregal : Realty - Not Promises Ö

2. Pedregal de Cabo San Lucas

GENERAL INFORMATION

The beauty of Los Cabos

HOMEOWNERS ASSOCIATION
The Homeowners Association has been in place for many years, and is run more efficiently. Because of the excellent services provided by the Association and the superior condition the common areas and roads are kept in, the value of the buyers investment is assured. There is an Office Manager for the Association along with a Secretary, and the office, which is conveniently located next to the nursery near to the square, it's open between the hours of 9:00 a.m. to 5:00 p.m. five days a week, Telephone 3-13-52, Fax 347-50.

SERVICES

SECURITY: There are two vehicles, which are drive throughout the Pedregal around the clock. Each property is therefore passed an average of every two hours. The entrance to the Pedregal is manned 24 hours a day by a security guard, and all people not known to the guard must disclose their destination. They are asked to hand over their driverís license as security, while they are visiting the area. Guest passes are available to owner, for any visitors that may have to stay.

GARBAGE DISPOSAL & MAINTENANCE: There are garbage collection 6 days a week, street maintenance and cleaning, gardening of the common areas, as well as beach cleaning. Public lighting is also provided both in the square and in all roads throughout the Pedregal.

HOMEOWNERS DUES 1998

BRAKETS HOMES LOTS
SIZE OF LOT IN M2 IN DLLS IN DLLS
Up to 600 797.00 398.50
601 to 900 1,195.50 597.75
901 to 1200 1,594.00 797.00
1201 to 1500 1,992.45 996.00
1501 to 1800 2,391.00 1,195.50
1801 and up 2,789.50 1,394.75

WATER: Water is available to all lots and is provided from the town water supply, which is fed to Cabo San Lucas via aquaduct from the mountains outside San Jose del Cabo. The water is pumped to a 250,000 gallon holding tank, known as a pila. The water is fed into this tank as it becomes necessary. The water is metered and billed by the City of Cabo San Lucas. An average two-bedroom house with small swimming pool and assorted plants would have a water bill of around $15.00 US per month.

ELECTRIC POWER: Electricity is available to each site. All power is located underground, except for a small area on the Marina side in Phase One of the Development. Electricity is metered by the City of Cabo San Lucas to each individual lot. An average two bedroom house without use of air conditioning would run at $125.00 per month.

TELEPHONE: For telephone connection, contact the Homeowners Association. The cost of connection includes a one time fee for the conduct installation per lot of $400.00 DIls and cable $500.00 DIls per telephone line. This applies to home or lot owners who have bought their property without this service already in place. The contract with the Telephone Company is separate and the cost at present is Approximately $200.00 DIls per phone line. With regards to the service of the installation, this will be kept in house and Telemaz will be in charge of maintaining the system in conjunction with the Homeowners Association.

3. Trust Information

How Foreigners Can Purchase Real Estate in México.

In the past few years are, there have been vast changes in Mexican Law to enable foreign entities to invest in Real Estate along Mexico's coastal and border areas, once restricted from foreign investment of any kind. Now, foreigners can have 100% control of property in Mexico through a Real Estate Bank Trust.

Definition & Mechanisms.

A "Fideicomiso" or Bank Trust is defined for Real Estate purposes as a transaction between a Mexican Bank and a foreign individual or firm investing in areas otherwise restricted to foreign investment, with the Bank serving as a trustee or legal owner with respect to a certain real property interest and the investor serving as the legal beneficiary of the Trust. The bank holds the title to the property in trust for the beneficiary who retains the exclusive right to use and control the property. As a trustee, the bank acts on behalf of the beneficiary in transactions involving the property held in trust. However, the beneficiary controls and makes investment decisions regarding the property, including the decision to transfer, assign or otherwise dispose of his or her interest in the property. The trust is essentially a contractual arrangement, which, in most respects, is identical to the type of Trust commonly used in The United States of America. Trusts are established for initial 50-year periods and can be renewed.

Investment in Real Estate Through Trust.

Development area of Pedregal de Cabo San Lucas

New rules governing foreign investment through a Real Estate Trust were put into effect in 1993. These rules provide the 3tability and protection of legal certainty for foreign investments. Mexican Law now expressly provides that at the end of the 50-year term of the trust, upon request, the Mexican Government issue a new permit. Also, if an interest in Real Estate held under a trust is sold or conveyed, the transferee can obtain a permit, which provides for a new 50-year term no matter how much time remains on the original trust.

While a Mexican bank holds title to the property in these transactions, the bank is legally obligated to follow terms outlined in the Trust documents that comply in all areas with the request of the foreign investor who is the Trust beneficiary. As the beneficiary, the foreign investor has an exclusive right to use, occupy and possess the Trust property, including the right to build upon it, subject to applicable regulations. In addition, the beneficiary may transfer or assign his beneficial interest and keep the profits from the sale of the property, subject to the law.
Foreigners who decide to invest in Real Estate in Mexico agree, because of such action, not to invoke the protection of their governments with respect to such properties.

4. Commercial Opportunity Within Pedregal

Lots of exciting developments happened in the calendar year 1998. Among those were the Developers offering of twenty (20) lots with commercial zoning. These lots range in size from 206 to 1034 square meters and are all priced from under $100,000 at the time of this writing. The location of these lots is adjacent to the El Camino School through the newest Pedregal entrance on the North side. Many of these lots enjoy blue water views through the entrance of the marina.

The Los Cabos area is filled with small businesses from restaurants to bakeries, hardware stores to beauty salons, doctors offices to drug stores. The largest portions of these businesses have always been at the mercy of profit motivated landlords that have been the leading cause of high prices ultimately targeted to the consumer. How many times have we all heard the question asked by the unwary tourist?

"Can you believe the prices of things here in Cabo?" I did a quick survey around town to try and determine the going price of commercial space. Did I get an education! When I came here permanently ten years ago and started a retail business, I found a space in Plaza Bonita, paid first and last months rent on a five (5) years lease and started my tenant improvements. Seventy days later, Franciscos Cafes del Mundo opened and Cabo had espresso. Today that lease costs 110% more than I paid and operating costs are up around 40% on the high side. Not only are the leases higher but a new business operator will have to pay $20,000 just for the privilege of being in the Plaza. The new mall operators are requiring upwards of $30,000 for space in addition to monthly lease payments and tenant improvements and the new commercial space at the airport is going for $20,000 plus. It is easy to see which way future prices are going to go. All of these factors make it easy to see the obvious solution to the problem. Buy your own lot, build your own building and be free of a landlord.

The commercial lots available within Pedregal are priced competitively with properties off the mountain plus all of the advantages of the homeowners association will be extended to the owners of these fine parcels. Also a very important item to consider when purchasing a commercial property is that unlike residential property, commercial property comes with a title instead of a fideicomiso. The Pedregal sales staff operates from three (3) different locations on the mountain, in Plaza Danza and behind the main office in the Plaza. If we can answer any questions regarding the new commercial property or any other fine locations we have for sale, please contact one of the offices.

5. Pedregal Opportunities

Beautyful beach view from Pedregal de Cabo San Lucas

Buying a lot :

Financing available with 30% down payment for 5 or 10 years. Excellent appreciation with good record of resales. 8U% of phase 3 has already been sold.

Building your own home :

Your home can be creatively designed specifically to your own tastes using your choice of architect and contractor. Pedregal services are available but, not required.
Building costs average $65 per square foot. The cost of fixtures, appliances and landscaping are additional but, this offers a more custom featured home. Generally, homes can be completed in 8-10 months.

Pedregalito :

A development in the Pedregal, adjacent to tile Pacific Beach, consisting of 20 residential homes with a recreational area, swimming pool, and cable T.V. system.

Pedregalito offers a property management service through the Pedregal office to make it even more perfect.

The prices include the cost of the lot, all permits and building costs, the amenity package, appliance ( stove, refrigerator, dishwasher, washer and dryer), air conditioner units for both bedrooms, window coverings, wired for satellite dish (set on G!,), landscaped with drip irrigation system.

Attractive Financing Available

Andalaya Condominiums :

Located adjacent to the Marina Blvd. in Pedregal. Phase I completely sold, has had their rental service management in effect for 4 years with a 75% annual occupancy, excellent cash flow, return on investment and appreciation on resales.

Prices include amenity package-fully furnished, appliances, stove, refrigerator, washer and dryer, patio furniture, ceiling fans, air conditioning, linens, dishes, cookware, draperies, color t.v. with satellite dish hook up.

A House ready to move in? :

Pedregal also handles sales of homes already finished within the project.

Ask us for more details :
PEDREGAL DE CABO SAN LUCAS
Tels : (52-114) 302 02 / 303 13 / 313 41-44
Fax : (52-114) 313 48

6. Tunnel Dos Mares

In keeping with the Pedregal tradition of creative developmental concepts, the excavation of the first and only tunnel in Baja California has begun. This exciting new project will provide access to a very exclusive beach property within the development. The special project beach site is located adjacent to Hotel Finisterra and extends westward to the Pedregal cliffs. This fabulous site includes some 300 meters of Ocean frontage and a total area of 53,000 square meters. It is perhaps the most private and protected beach property in Cabo San Lucas. A unique location in the world where the Sea of Cortez meets the Pacific Ocean...hence the name Tunnel Dos Mares.

At this time there are no definite plans for this beach site and many options are under consideration including condominiums, hotel and/or time share hotel. It may be partially subdivided into very luxurious villa sites. Perhaps a casino?

The tunnel will pass under the ridge of hills, which separates the principal entrance to Pedregal from the ocean. The northern entrance to the tunnel is located about 100 meters south of the Security Gatehouse. From there it will extend south some 290 meters to connect with the beach. The excavation will be approximately 8.20 meters wide and 6.5 meters high in the structurally self supporting form of an arch. Approximately 13,000 cubic meters of solid granite will be removed. Thatís about 2,600 dump truck loads! The excavated rock will become property of the excavation Some of this rock may be retained by the developer for future construction of roads and rock walls within the development.

The tunnel is being built by the URCULA company under the direction of Engineer Sigfrido Cuen and mining Engineer Oscar Lopez, Manuel Diaz Rivera will be the developers representative in charge of the project. The estimated cost of the project is 1.75 million Dlls. The excavation of the tunnel will be accomplished by drilling and placing very precisely controlled amounts of explosive to break the rock. The procedure will be to drill two meters, place and detonate explosive and remove rubble and repeat. It is anticipated that the excavation will proceed at a rate of 4 meters per day. Noise from this operation will be minimal and vibrations felt no more that 90 meters from the site. The excavation will take place in 2 phases. The first phase will be a diameter of 4 meters.

When this is completed and there is better ventilation it will enlarged to final dimensions. Excavation began in mid February and completion is anticipated within a year.

Prior to initiating this project three different permits were necessary. (It took a year to secure these permits) for the Federal Government an ecological impact study was required before the permit was issued. A Los Cabos county construction permit was required and permit from the Secretary of Defense National for the use of explosives. Federal and local inspections will be required monthly. Also a full time biologist and geologist will be part of the supervising team closely monitoring the project.

When the excavation is complete, the infrastructure (electric, water, sewer and telephone) will be extended to the beach site. A desalinization plant would be required for any type of hotel or condo development on this site. A two lane road with sidewalk and lighting will allow pedestrian and vehicular access to the beach siteÖand itís only a five minute walk from town!

Tunnel Dos Mares will provide an exclusive and controlled gateway to one of the most private and protected beach properties in Los Cabos. A setting which promises gorgeous sunrises, moonrises and breathtaking seascapes.. plus very exciting developments possibilities

Tunnel Dos Mares breakthrough!

On Sunday, September 11, 1999 at 8:15 P.M. workers broke through to the Pacific Beach side completing the first phase of the excavation of Tunnel Dos mares. The excavation which began In mid February, has progressed according to schedule.

The breakthrough represents the initial stage in the completion of the first and only tunnel in Baja California. The initial excavation was to a diameter of 4 meters and will now be enlarged to the final dimensions of 8.2 meters wide and 6.5 meters high.

The completed tunnel will have a two lane road, sidewalk and lighting and will extend infrastructure (electric water, sewer and telephone) to the beautiful 53,000 square meter Pedregal Beach site. All this within a five minute walk from downtown Cabo San Lucas!

With the completion of this initial phase, Tunnel Dos Mares is well on the way to providing an exclusive and controlled gateway to one of the most private and protected beach properties in Los Cabos. A setting with gorgeous sunrises, moonrises and breathtaking seascapes, plus very exciting development possibilities.


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© World INvestment NEws, 2000.
This is the electronic edition of the special country report on Mexico published in Forbes Global.
July 3rd 2000 Issue.
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