Hotel Rates in Buenos Aires

Hotel rates in Buenos Aires have risen significantly in just the past few years due to the country’s growing economy and tourism traffic. Our office recently did a study of suite rates of premium 5-star hotels in Buenos Aires to see what the competition is charging. We chose to look at comparable hotels to Algodon Mansion’s 5-star quality suites and amenities, and looked at suite rates from 2005 (when the idea for Algodon Mansion was still just an idea in my head) versus what they go for today.

I think this positive illustration says quite a bit about Argentina’s economy. You’ll also notice that all of these hotels have over 100 rooms, and one of them even has over 200. With Algodon Mansion’s boutique status of only 10 very high-end, butler-attended suites, there is no question in my mind that our hotel will have a remarkable reputation for highly personalized services that elevates us above all the rest in Buenos Aires.

Here’s what we found, and the following price list is approximated:HotelRateComparison.pdf

Happy Holidays!

Happy Holidays, Friends!

There has been a lot of talk in the news of late regarding the condition of our global economy. I believe that even though the world is in the midst of an economic crisis, the companies that are able to weather the storm will be in a unique position to capitalize on the opportunities ahead. Our company recognizes that many people are being hurt in this worldwide economic downturn, so we are determined to turn this current crisis into an opportunity for our investors. While we remain realistic about the conditions of the current global market, we are also very optimistic about the opportunities that are presenting themselves in Argentina.

Some bright highlights in the recent news include a Reuters report that Argentine wine exports are seen growing, despite the crisis, and Expedia Travel Trendwatch’s annual report that despite the tough economy; “the upcoming holiday and winter travel season will not differ greatly from previous years, and with fuel prices declining in recent months, many airfares are the same or even lower than the 2007 season.”

I hope you all have a superb holiday season. We’ve had challenging but a great year in 2008, and I look forward to making 2009 an even better one.
Happy New Year!

A Real Estate Comparison

Here’s a great photo comparison of U.S. vs. Argentine real estate valuation that may put things into perspective for many people. This is more than eyebrow-raising; it’s enlightening, and it’s what we’ve been saying all along. Click the link for an illustration that says a thousand words: Real Estate Comparison.pdf

José Luis Clerc

As I’ve mentioned in an earlier post, we’ve partnered with José Luis Clerc, who happens to be one of the most recognized and revered professional tennis players in Argentina’s history. He will be promoting Algodon Wine Estates’ tennis center, and will also be overseeing the construction and design of the tennis center’s courts, clubhouse, and the overall tennis program itself. His official titles are Director of the José Luis Clerc Tennis Center (at Algodon Wine Estates), and Ambassador of Algodon Global Properties. The latter title is appropriate since he will also serve as a public relations conduit and provide his personal and professional international contacts with the goal of developing tennis exhibitions with former and/or top world players and futures tournaments to be held at Algodon Wine Estates. The fact that José is a very personable gentleman combined with his impressive place in the history of tennis truly makes him a uniquely qualified individual to represent our Algodon brand, both on and off the court.

His player’s history can be found here on Wikipedia. José began playing professionally in 1977, and won 25 ATP Titles, and retired in 1988. His highest rank was World No. 4 in August 4, 1981, following a run of 27 victories and 4 titles in one month, and had year-ending rankings 8th in 1980, 5th in 1981, 6th in 1982, and 8th in 1983. José represented Argentina for the Davis Cup from 1976 to 1989. He currently runs a tennis school in Argentina was recently a featured commentator for ESPN Latin America’s coverage of the 2008 US Open.

New Nine Holes

The new nine holes are certainly coming together, and soon our 18-hole course will be up-and running, adding to our reputation as the first golf course in Argentina to be surrounded by vineyards. (Though we’ll soon have to change our boast to; “We’re the first combined championship golf course, and championship tennis center, and championship polo center in Argentina to be surrounded by vineyards…”) Golfers will literally play through vineyards, walnut, pear and olive orchards, and enjoy breathtaking views of the Sierra Pintada Mountains with the Andes as its backdrop. The goal is to create a course that blends with the existing vineyards, indigenous plants, and topography so that it appears as one with the landscape. The design team has opted for a noninvasive approach by allowing the new course to “grow into” its surrounding, and once complete it should reflect a harmonious synergy with the natural beauty of its surroundings. The green will be 7,400 yards from the tips, and will be a challenge for the low handicapper; yet the 5 different tee boxes make the course accessible to the entire family.

Again, the entire 18-hole course will be open for play in May, 2009, but in the meantime the original nine holes are still open for play. Summer will be starting soon in Argentina, so I’m sure we’ll be seeing a lot of visitors, especially with the press we’ve been getting lately. Check out this media mention; Algodon Wine Estates Barrel Ownership Program.

Algodon Brand

I’ve recently been asked to talk a little bit about the name idea for the Algodon, so I’ll do that today. My original goal was to create a brand name of distinction, refinement and elegance- a name which conjures “a clean and pure appreciation for the good life, and a sense of refined culture.” Obviously, that’s a big order. So after much careful thought, we decided to run with the word “Algodon,” which means “cotton” in Spanish. Though my Mississippi grandparents were cotton farmers at the start of the 1900s (“when cotton was king!”), for the most part I initially associated the word with the Cotton Club days of the Roaring 20's, and even that sophisticated glamour so often associated with the 50's "Rat Pack". This was a time when travel and leisure were synonymous with culture and sophistication, and that’s the feeling I was going for. My desire is to make Algodon- both as a brand and as a destination- the modern day equivalent in an active, global lifestyle, and ultimately “a destination where the best elements of the illustrious past and the affluent present meet.” Above I’ve quoted some of the language we used when initially defining our brand identity, and I think the language that we came up with worked really well for us.

Bottom line, the Algodon brand represents a lifestyle. My goal and my company’s goal is to continue seeking out distinguished properties which encapsulate old-world charm and sophistication, and to refurbish them with modern day service, technology, and amenities.

I’ve been asked if I am looking to create a hotel chain. The answer is no. I prefer to think of this as simply a collection of exclusive properties within Argentina, which operate under the Algodon brand. And who knows? From there we may expand into other leading cultural cities of the world. But let’s not get ahead of ourselves…

Formula For Success

As I mentioned in a previous post, Argentina’s booming economy and real estate market are presenting unparalleled investment opportunities every day, and are attracting savvy international investors from all over the world, including us. When approaching the real estate market, we felt that an ideal investment sector for ourselves and our investors would be the hospitality sector. I personally feel that identifying underperforming commercial properties and repositioning them into hotel or mixed-use properties is a formula for success.

Argentina’s uninterrupted property appreciation has roughly seen a 50% increase in real estate values since overcoming its financial crisis in 2002. So it’s logical to me that, while property appreciation alone may be well worth the initial investment, capitalizing on that investment to create an additional primary source of income should be our ultimate goal. A successful luxury boutique hotel such as Algodon Mansion may potentially generate multiple revenue sources from a single piece of property. That’s good news to me.

While the Algodon Mansion will serve as a high-end, private hotel for distinguished guests, we also hope to appeal to the local community with the restaurant, lounge and spa. Our goal in the property’s renewal is to reclaim the old world charm and sophistication of its original 1912 architecture, while at the same time denoting an aesthetic value of modern elegance and functionality. We’re all proud of it. By respecting and maintaining the integrity of the building’s original facade, we believe the finished product will add to the beautification of the neighborhood; attracting a loyal customer base and becoming a travel destination for both the local community and visitors to Buenos Aires.

Next week I’ll talk about the name we’ve chosen for the hotel brand, and how we reached the decision to call our project “Algodon.”

Have a great week!

Algodon Mansion

“Perhaps the most tangible sign of Argentina’s economic recovery, is its booming real estate market, which has transformed Buenos Aires, the capital, into a construction site.” - The Wall Street Journal

I love that quote. Tourism in Argentina is thriving right now, and has been for the last several years. I see it every time I go down there, and my favorite hotels are always almost booked to capacity. Argentina is literally the leading tourism destination in all of Latin America, and had over 4.5 million visitors in 2007. The Argentine Tourism Office says that visitors from the US alone grew more than 35% between 2005 and 2007. I like those numbers! 2.2 million foreigners visited Buenos Aires last year, and Buenos Aires City Tourism Bureau did a study that found foreign tourists prefer four and five star hotels (who doesn’t?), and that 2007 occupancy rates exceeded 85%. Things are looking good for our hotel project.

The mansion we purchased is absolutely amazing. It was previously a private residence and is located at 1647 Montevideo Street in the heart of the embassy and luxury hotel district, Recoleta. The Mansion is a magnificent 20,000 sq/ft estate that was built in 1912. It’s a 5-story building, but we added a subbasement during the renovation, bringing it to 6-stories. The architectural team we decided to use for the renovation is headed by internationally acclaimed architect, Gerhard Heusch. He’s got a great portfolio, and I’ve had the pleasure of seeing some of his past projects in person, including The Grand Havana Room in both New York and LA.

The hotel will feature 10 luxury suites, a 5-story hanging garden, and rooftop pool, spa, and bar. Watching the completion of this project has been a real experience. These days, I get down there to oversee the project just about every other week. One of the highlights for me has been the construction of the rooftop pool. Wow. It’s going to be truly fantastic. The hotel is also going to have a restaurant featuring South American & French-fusion cuisine, a private dining room with a wine cave and humidor, library bar, wine cellar, and an outside dining patio that features an A-framed glass ceiling. This project has become very personal to me, and I have to say that I’m quite proud of it.

With Gerhard’s help (as well as the rest of our incredible work team down there), Algodon Mansion should be opening its doors in December. That’s right around the corner, and we’re all very excited about it. The plan is to have a wonderful New Year’s opening party for our partners and friends. I’m looking forward to it.

I’ll be here next week with more about Algodon Mansion…Gotta go, I have work to do!

My Trip to Buenos Aires

When I arrived in Buenos Aires in 2003, it was common knowledge that the economy had recently suffered a debilitating blow, that the country had defaulted on its national debt and that the unemployment rate was soaring. Since I am by nature a contrarian, this was part of my motivation for going. Although my expectations were somewhat tamed by media coverage about the economic and social problems, I had hoped to enjoy the city’s charms and the value of its currency which had devalued by about 70% from its previous level. In fact, I was “wowed” to find a vibrant world-class city, full of sophisticated, well-dressed and happy people, historic beautiful neighborhoods with lush green parks and public monuments, wide-open boulevards lined with buildings boasting some of the finest architecture I had ever seen. I was also enthralled with the great shopping… markets…. music…. dancing…. wonderful food, wines and entertainment. I knew then why they call Buenos Aires the Paris of South America, at a third of the price here in the States and an even larger value discrepancy in comparison to the major European cities.

My enchantment with the city prompted my interest to learn more about the local real estate market. The more I learned, the more convinced I became that there was a huge opportunity, that prices were extremely low compared to other leading cities and with the economy and tourism rebounding strongly, many elements of risk had already greatly subsided. I was determined to take action.

But that’s enough for today. Next time I’ll be talking about how my vision has indeed been realized by my companies (InvestProperty Group and DPEC Partners) in the creation of a luxury boutique hotel (“Algodon Mansion”) in Buenos Aires, and then later a very beautiful wine and golf resort (“Algodon Wine Estates”) in San Rafael- the southern heart of Mendoza.

Life is good!

My First Entry

Here we go- my first blog entry. I’ve been asked by several friends and coworkers; “What’s possessed you to write an online diary?” So first off let me say, a daily “diary” is certainly not my intention in creating this journal. I’m not here to talk about what I had for breakfast this morning (delicious as it was.) I’d like to think of this as a way to share my personal knowledge and experience regarding current and timely investment opportunities with my friends, family, clients and partners. This is also a great venue for me to keep those same people informed of my companies’ latest endeavors as well as the evolution of our projects.

As many of you know, I’ve taken a particular interest in Argentina’s real estate market, specifically Buenos Aires and Mendoza, after remarkable investment opportunities were made available due the country’s economic crisis several years ago. And though these opportunities have been much publicized, I’ve still been asked; “Why? Why Argentina?” I would like to say that my black box, which is fed with copious amounts of charts and data, issued a proclamation that the time was ripe to enter the real estate market there. However, things don’t normally work that way, at least not for me. My determination to enter this market really began as a personal journey, a tourist visit to Buenos Aires in fact, and was gradually transformed by my experiences and what I witnessed firsthand, into a determination to pursue a vision. So, while in the past few years there has been a lot of positive media coverage relative to Argentina’s real estate market, there is a big difference between words and action. Hence, I have used my conviction to take action and enter this market and am currently in the process of turning my vision into what I feel will be a profitable business and investment opportunity.

Next week I’ll tell you a little bit about my first visit to Buenos Aires, and what specifically it was that really clarified my vision and opened my eyes to the amazing opportunities Argentina offers its investors.

Until then…