Fallout and Restructuring

Venegas World Star Realty



Venegas World Star Realty was one of the largest real estate brokerages in Puerto Vallarta. Today the Venegas name is gone from the marquee, the satellite offices have been closed and the future of the brokergage is not known. It appears that World Star Realty will continue to operate out of the main office on Olas Altas in Zona Romantica, but with a much reduced footprint.



Bayview Grand - Grand Venetian



We last fully reviewed the Grand Venetian on February 10, 2007 . It was supposed to be three towers, each tower with 140 condos, and and additional 68 townhouses spread across a 40 acre site . At least until last month. Despite the fact that the third and final tower is under construction and the site layout was complete, the townhouses have been cancelled, the height of the third tower increased while under construction, and the number of units in tower three increased from 140 to 234.

We have seen projects restructured prior to construction and we have also seen slight modifications to building plans such as building 10 rooftop penthouses instead of 8. But we have never seen an as-planned building, under construction, expanded by over 80% in unit capacity.

We are not technical building experts, but we do know some things about expanding, after the footings have been laid and the first few floors have been built. First, there is no additional parking capacity. Parking has already been built. So apparently there will be two classes of buyers, one class gets inside covered parking, the second class gets outside parking. Second, the common elements for all three buildings are finished and were developed with the capacity to serve 140 condos in tower 3, but now tower 3 will have 234 units. How do the common elements get expanded? Who pays for the expansion?

However, the real confusion surrounds what we in Canada call the Declaration and what in Mexico should be called the Escritorio. It is the legal document which specfically describes what is owned, what is considered an exclusive-use common element and what is considered a common element. The townhouse site, which still exists, but will not have townhouses, now has to be "written in" as common elements to the Declarations of those properties in Tower 2 that have been finished and delivered. (This project has 3 towers which were sold in the following order: Tower 1, Tower 2, Tower 3, but they are being completed in the following order - Tower 2, Tower 1, Tower 3). We do not believe it is possible to alter a Declaration without a 100% vote in favour and we don't see it happening.

Has a condo purchase at this site been a good investment? Two years ago, I bedroom units in tower one sold for $229M. Today, one bedroom units in tower 3 sell from $190 - $220M.