Costa Rica credit crisis
The United States credit crisis keeps harming real estate and investments over seas as well. Many developments in Costa Rica could be delayed or canceled altogether because of a lack of money from investors. The world wide credit crisis is hurting the emerging real estate market in Costa Rica with many different projects being put on hold or flat out canceled.
Many big hotels in Costa Rica are given money by United States banks. Everything from the Hyatt hotels to the Regent hotels and many more in Costa Rica. All the construction and building is currently in question and the results depend on when the credit crisis will end, and when banks will start lending money again.
AOL Founder Steve Case gave a lot of money, almost 800 million dollars, for the construction of the Cacique hotel on the Pacific coast of Costa Rica. The construction was suppose to begin early next year. Except now the project that includes a couple hotels and a big spa, as well as amazing tennis courts and other sporting arenas won’t even start until late 2010 or early 2011. That’s assuming the credit crunch ends by then.
It’s additionally a down-side for Agassi who has huge plans for the real estate market in Costa Rica. Earlier in the year they stopped building a luxury hotel because they couldn’t get the required money loaned to themto build their new arena.
Around the recent habitat, we don’t think about it being a good idea to begin with construction, he said, except as soon as the markets are back to to regular, the project should continue as it has been planned, we just don’t know exactly when this will happen. The Regis hotel which was suppose to be built in Costa Rica has been put in hold for the same reason, because of money problems.
“We are putting this on hold for the moment, to give us an opprotunity to investigate how the credit crunch situation is going to play out” said a hotel developer with big plans in Costa Rica. That new Regis hotel was being given money by the United States bank Lehman Brothers, the same bank that no longer exists because of the credit crisis and banking crisis. They haven’t been able to find another lender in these conditions to back up the construction costs.
The next Lehman Brothers financed hotel project was Manzanillo’s Mandarin Oriental Hotel Group. Additionally it finds itself on unstable grounds, because its bank sponsor filed for bankruptcy. Due to money worries and instability in the market, the whole project might be extended or even terminated.
There are additionally many concerns about who the owners of these projects will be once they’re completed. The American people represent the biggest groups of visitors to Costa Rica, and there are fears in the government and all over the world that tourism is going to slow down or stop because of the credit crisis.