Sevla Romantica

Sevla Romantica is a 90 unit, series of low rise buildings in the heart of Old Town and Zona Romantica. The project can now be considered complete.

The project was pre-sold starting in 2004 with very attractive initial pricing. Studio units sold for about $109M and 1-bedroom units for $225M, unfurnished. By mid-2006, furnished studios were selling for $200M+ and 2-bedrooms for $240M. Prices have been stable for the past year, maybe up slightly for studios, down slightly for 2 bedrooms. Prices have remained high because this is a very attractive rental building. Very few listings and sales have been reported.

Since the project is complete, there is no delivery risk. We have no reports of any construction deficencies. However, the final building in the project is not brand new, it is a reconstruction of an existing building and requires its own inspection before an offer is made. Maintenance fees are about $250 monthly for 2-bedroom units. Operating risk (the risk of maintenance fees rising faster than inflation) is low. Almost all common elements are outside and require low maintenance. On-site staff requirements are very low.

There is a semi-formal rental program and rental opportunities are far higher than average. Two-bedroom units are, in some cases, generating over $20M net income per year.

Parking spots are deeded. We have a report of one owner selling with the claim that buying a parking spot is not necessary since there are many "empty" spots to use. These spots may be empty but they are owned, and simply owning a condo in the building does not allow an owner access to "empty" parking spaces. Parking in the area is very limited so if a parking spot is needed, insist on it being part of the purchase with a deed provided.

We are waiting for confirmation that condo deeds have been provided with no conditions, prior to issuing a recommendation.

We expect to recommend hold/buy with a requirement that the final building have specialized inspection.