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Koll, Starwood Land $130M Construction Loan

By Joe Clements
(Read more on the debt and equity markets.)

CABO SAN LUCAS, MEXICO-A master-planned oceanfront community on Mexico’s Baja peninsula is closer to reality after its developers received $130 million in construction financing to build the initial phase of 109 homes. Known as Hacienda, the venture calls for 239 units fronting Medano Beach on a 24-acre site that once featured the historic Hacienda Hotel.

A partnership of the Koll Co. and Starwood Capital is developing the project, which will also yield a beach club with full restaurant and a lounge, as well as a fitness facility, numerous pools and a spa. The construction loan was provided by Wachovia Bank’s structured finance group, according to Barry McGowan, managing principal of the Koll Co.

“The Wachovia team members really took the time to understand and to structure the financing in a manner that reflects both the laws and business practices of Mexico,” says McGowan, adding that the loan is the largest of its type ever recorded in the Los Cabos area and will be one of the heftiest for all of Mexico this year. The funds will construct both the 109 homes in the first phase and the amenities such as the beach club, he explains.

Prices in the first phase average $2.4 million, with units including a combination of styles and locations. Two-story detached villas planned along the beachfront will have 3,600 sf of interior space, four bedrooms and ample outdoor space including “infinity pools.” Also, view-oriented resort residences and penthouses will be constructed in a series of four- to six-story buildings. Those units will have one to four bedrooms each and range in size from 900 sf to 3,600 sf. McGowan estimates that the gated community will begin welcoming its first occupants by late next year.

Based in Newport, CA, the Koll Co. has a long-time presence in the Los Cabos area, and McGowan says that pre-sales for the first phase are at 85%. Both factors helped Wachovia get behind the project, he says, as well as the involvement of Connecticut-based Starwood Capital.

A collaboration of San Francisco-based Hart Howerton and GV Arquitectos of Los Cabos designed the project. Construction will be completed by Constructora Gravi, also from Los Cabos, while Senterra of Texas is the local building partner and property manager

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