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Trump invests in Baja California – good news for Mexico and US

By Patrick Osio, Jr./HispanicVista.com

   December 5, 2006

 

  

 

Trump invests in Baja California – good news for Mexico and US

By Patrick Osio, Jr.

As a metaphor, “The shot heard around the world,” changed to “The press release heard around the world,” aptly describes Donald Trump’s press release in October announcing the 17-acre land purchase and eminent ground breaking of the Trump Ocean Resort Baja, the first branded condo-hotel located on the northern edge of Playas de Rosarito (Rosarito Beach) municipality in northern Baja California.

The press release picked up by the industrialized nation’s news media quickly running its course from Japan, South Korea and Taiwan in the Far East to the European capitals as well as throughout the NAFTA partner nations, the United States, Canada and Mexico.

Within hours after the announcement phone calls began arriving at the headquarters of S & P Destination Properties, the Canadian based marketing company, contracted by the partnership between the Trump Organization and Irongate real estate developers based in Los Angeles. The first calls were from business reporters wanting additional information for articles, which after they hit the street and evening radio and television news, the calls were from interested potential buyers from a plethora of countries.

The news was received with great fanfare by the numerous Tijuana to Ensenada coastal developers. Their reaction was not one of fear that such potent competition was going to take over the market. To the contrary, the feeling was that the high profile presence and ensuing publicity of Trump in Baja would translate into world acceptance of the Baja coastal corridor as a destination for both visitors and investors.

That Trump’s condo-hotel resort will undoubtedly be a first choice among the higher end buyer/investor is accepted as a well deserved reality. However, the Trump project consisting of three 25 story towers will have 526 total units whereas the potential market just in Southern California with some of the world’s highest per-capita income population exceeds 20 million.

The Trump first phase, the middle 25 story tower will have condo-hotel units ranging from one bedroom 532 square feet to over 2,200 square feet penthouses with prices ranging from $250,000 to over $1.5 million depending on the floor and number of bedrooms and size of the unit are by all standards in the high-end. The second and third towers will in all probability be at higher prices.

The conclusion is that the presence of Trump in Baja will attract far more buyers than the Trump project can accommodate, creating a demand for all other projects that meet the “buy safe” requirements and offer sound construction and amenities that safeguards and increases property values.

The Trump Ocean Resort Baja promises to be a 5-star destination hotel in keeping with the other Trump projects for which “The Donald” has become famous. For Irongate this is the second project in which they’ve teamed up with Trump. The first, Trump Towers Waikiki, a 38-story, 5-star hotel condo with 464 rooms and suites sold out in one day on November 10, 2006. 

The partnership contracted S & P Destination Properties that opened sales in both Tokyo and Oahu, Hawaii using a proprietary on-line sales selection process sold all units in one day topping $700 million in sales, believed to be a real estate world record for sales of multiple units in one location. The same S&P is contracted to lead the marketing effort in Baja.

S&P’s Brendan Mann handling the Baja marketing effort, related that there is also a great deal of interest on the project on the part of Japanese, who were the main buyers of the Waikiki units and there is an expectation their purchasing presence will be significant in the Baja project.

It makes sense, the Tijuana International Airport has begun direct flights to Tokyo (Mexico City-Tijuana-Tokio/Tokio-Tijuana-Mexico City), and by far the biggest maquiladoras in Tijuana are Japanese or South Korean owned. Additionally, there are large contingencies of Japanese executives living in San Diego working in Japanese owned businesses in either San Diego or Tijuana.

Plus Los Angeles resident Korean-Americans and Korean nationals are already important investors in Baja coastal properties, as pointed out by Luis Bustamante, President of CreditmexUSA.com, stating that sales to Koreans in some projects closest to the US border have been in excess of 20 percent.

Mann also noted that S&P is working with several local Baja real estate brokerage firms providing a first opportunity for local citizens to be the first to invest before the rest of the world jumps at the opportunity. This became evident at a reception held on the site at Punta Bandera hosted by S&P and local brokers at which the most invitees were local Mexican business people. In discussing the project with a number of them, I came away with the feeling that there was much interest and a number of them would be investing.

Discussing the project with Jason Grosfeld, a principal of Irongate, he provided a new insight that will have direct consequences in San Diego. The Trump towers will have executive convention and conference space competing directly with 5-star hotels in San Diego. According to the San Diego Visitors and Convention Center, 60 percent of San Diego visitors arrive by car so driving the extra 20 or so miles is not a barrier.

Mann feels the Trump Baja towers will have a marketing advantage in that the location is ocean front with spectacular views, and the hotel pricing will be a bargain compared to what is presently charged by San Diego 5-star hotels, plus  Trump as a branded name with world wide reservation systems in place, can successfully compete for that business.

The long term answer to Mexican immigration to the US is the development of economic opportunities and well paying jobs so the effects of Trump’s presence in Baja open a new dimension and series of opportunities on both sides of the border and that is welcomed news.

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Patrick Osio is the Editor of HispanicVista (www.hispanicvista.com). Contact at Posiojr@aol.com

 

(The opinions expressed by Patrick Osio, Jr. are solely his and do not necessarily reflect those of HispanicVista.com, editorial board of advisors or it’s contributing writers.)

Patrick Osio, Jr. has written a short but intensive manual on the Mexican perspective on numerous issues between our two countries. The manual is an in depth primer on the culture and protocol for better understanding Mexicans that in turn allows establishing personal and business relationships, and how to avoid the most common faux pas that can ruin relationships and business deals.

The manual is available through Electronic delivery for $9.95 making it possible to download the manual for save on your hard drive, printing its entirety or particular sections while reaping considerable savings over printed copies.