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Q3/Q4 2018 International Newsletter

What do Luxury Brand Resort Developers from Aman, Auberge, Montage, The Ritz Carlton, St. Regis, The Four Seasons, Viceroy and more see about Mexico that the general public may not?..Uncertainty Begets Opportunity

From Q3 of 2017 to present, the world has seen anti-government protests throughout Europe; inconclusive elections in Germany and Spain; tensions rise between the US and some of its historical adversaries AND allies; major territorial disputes, surging cyber-crime; anti corruption purges in Saudi Arabia; and increasing divide in opinion over Brexit; just to highlight a few of the factors that have shaped global financial and economic trends.

However, despite this, the performance of the global economy exceeded expectations. A broad-based upswing in growth, employment, trade and stock market volatility, supported strong wealth gains across the financial, commodity, technology and industrial sectors.

Current trade tensions and looming tariffs have weakened currencies in some emerging markets as investors shift to public holdings, more liquid assets, and to USD. However, a robust demand and constrained supply in top Luxury Real Estate markets also offers a key strategy to diversify and preserve wealth.

Of the international destinations of interest for Ultra High Net Worth Investors, some familiar favorites and some surprising newcomers currently top the target list. Whether due to historical performance and value; or because they represent emerging or recovering markets; foreign property ownership provides both a finite, predictable asset class and something owners can enjoy. Marbella, Barcelona, Montenegro, London, New York, Boston, Portugal, Costa Rica, Columbia, Brazil, and Mexico are all on the radar for our valued clients.

In North America, recently-passed legislation in Canada restricts off-shore investment and the largest Canadian Banks hint at a real estate market correction in key cities like Toronto and Vancouver. Although US tax reform late in 2017 provided a nice boost to prospective buyers, changing foreign policy and the general decline in ‘livability index’ in some key US cities has many looking south to Mexico and Central America. A New Mexican president takes office after a decisive election win, and government is poised to capitalize on the current political and economic climate to deliver on campaign promises. Economic prosperity through tourism and off-shore real estate investment offers foreign interests opportunity in a time of heightened global instability and financial risk.

Amidst the field of options, Los Cabos is well-positioned to continue its trend of exponential growth. With 3 million visitors in 2017 (+16% over previous year), 550+ flights a week (including new direct routes from London), 20+ new international hotel projects, and another $50mm USD airport expansion, it’s no surprise Los Cabos takes the number one position versus perennial favorites like Puerto Vallarta, Cancun, and even Mexico City. The boom in luxury real estate and branded resort residences, the ability to buy and sell property in USD, and a solid 5-7 years of buoyancy in the luxury sector of the market merely support what return visitors and homeowners alike already know; Los Cabos is a paradise of magical beauty, tremendous opportunity, and one of the top travel and leisure destinations in the world.

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