The Peninsula Phase III

The Peninsula is a three tower residential, hotel and commerical project on reclaimed land at the mouth of a river in the hotel zone of Puerto Vallarta.

Phase I and II of the projects have been sales successes. Phase I has been delivered but despite a formal request, we cannot determine if deeds have yet been provided. Phase II will be delivered shortly. Phase III is scheduled to be completed sometime in 2009, but sales contracts will allow for a 6 month delay.

There are simply too many risks with Phase III to attempt to cover in one posting. The building will be a combination of traditional condominium, fractional and hotel units. Condo and fractional units will compete for rentals with the hotel. Buildings of this nature have very high operational risk.

The reclaimed land used for this project has yet to be tested by a tropical storm. Leaks have been reported in the commerical structure that abuts the residential buildings.





This is the only project in Puerto Vallarta that has not adjusted its prices down in wake of a market slowdown. The result: only 3 of 80 units have sold in the 6 months the project has been marketed. Price risk is not acceptable. This project will have to reduce pricing in order to avoid a substantial mark down of unsold inventory at the completion of construction. An Intrawest project had a similar market and pricing profile. At completion, list prices were reduced by 25% across the board to use up unsold inventory.





Recommendation*: Pass

*Recommendations are general in nature only and will be impacted by investors specific circumstances.