Friday, May 14, 2010
If you have been following these dispatches, you will know the stretch of Ecuador’s coast between Pedernales and San Vicente has my attention. I think it should have yours.
This coast is stunning, dramatic and green for much of the year.
Buying here will position you ahead of the Path of Progress as a new highway will improve accessibility.The real estate values are amazing.
Here at Chateau de Courtomer in Normandy, France, this stretch of coast has the attention of attendees at The Bonner Family office’s inaugural Global Partners Reunion. This is a wealth protection and estate-planning club established by International Living’s founder Bill Bonner. We’re here to share ideas and develop strategies.
Land banking along this stretch of coast is the play that has the attention of this group. You can pick up large pieces of land here (with beachfront) for as little as $800 per acre. I saw one piece with 10 kilometers of beach. You’ll pay more per acre for smaller pieces of land…but the values are still amazing.
The play here is to buy land and wait for the infrastructure and people to come. Buy a big piece of land now, and a resort developer will cut you a big check for it once this stretch of coast catches on.
Here’s an example of one piece I saw of 600 hectares (1,500 acres). The asking price was $1.2 million. Road access to this piece is direct from the main highway. I shot this video of the access road we took.
Despite being rainy season, it was easily navigable although it was overgrown and there were some fallen trees in places. The forest is amazing. The access road enters at the far left of the property as you face the ocean. There is a very steep drop to the beach.
At high tide there is very little beach. There is one kilometer of frontage. All the land is elevated from beach level.
To the right of the property, however, there is quite a big piece of land that slopes gently from the rim to the beach. Hard to say how much land was down there but there certainly are quite a few hectares. This is the nicest part of the property. The property to the right of here is also for sale. It’s 500 hectares but only has 350 meters of frontage.
Building an access road down to the beach area would be a bit of a job but I’m told it could be done from one of the lower points on the rim.
Farther north from here is the town of Jama. I saw a piece with eight kilometers of frontage and spectacularly sloping land. This piece is 3,500 hectares. Access is from the main highway but the road would need to be cleared to get right through the land. This land is mostly covered by virgin forest and slopes dramatically. The owner is quoting a price of $0.50 per meter ($5,000 per hectare) but it sounds like he might go a lot lower.
This play most likely will be a medium to long-term hold. This isn’t for you if you are interested in a quick flip. You also need to happy to carry the property (this will incur some costs) for the period you own it and not generate an income stream. That said, there are some opportunities to land bank farmland. It continues to operate as farmland and can generate rental income until it’s sold to a developer.
If you are like members of the Bonner Family Office group and have liquid assets that you are seeking a medium-term home for, this play should be on your radar.