Ricardo Santa Cruz, president and CEO of RSC, has over 12 years of experience in land acquisition and property development in Mexico, having acquired more than 4,000 acres for development on the Pacific Coast.
He is a development partner for the One&Only Mandarina project in Punta Mita on Riviera Nayarit. It took Mr. Santa Cruz, 47, nearly a decade to assemble the 640-acre property, with some landowners very reluctant to sell. Mandarina is being developed along a one-mile stretch of swimmable beach.
The Puerto Vallarta, Mexico-based Mr. Santa Cruz spoke to us about the surprising resilience of the high-end real estate market, the importance of doing due diligence on a developer and much more.
MANSION GLOBAL: Describe your dream property.
RICARDO SANTA CRUZ: I’d always ask myself: “What’s the community that I’m buying into and what can I experience there?” Obviously on the one hand I’d like the property to be aesthetically beautiful, but I’d also want different options for topography, elevation and vegetation—a place where I could swim on the beach and also go horse riding. That’s what we try and do with our properties—to make sure you’re embedded in nature and that you have a lot of privacy, too.
MG: Do you have a real estate property that got away?
RSC: There’s one property that I looked at in the southern part of the bay of Puerto Vallarta, which would have been for for commercial use. At the time, I was looking at so many other projects and properties, so it just didn’t happen.
On a personal level, there was a home with a private beach, and I could have built a couple of homes on it, but I didn’t end up closing on that one either.
MG: What does luxury mean to you?
RSC: To me it’s not about the buildings themselves. I don’t define luxury in terms of materials or finishes used. When you go into the high-end market, those are a given. That’s your entry point. To me, real luxury is privacy. More and more, it’s hard to find projects that do low density. Developers mostly want to maximize the bottom line. Even though they’re luxurious, there’s little privacy, even for beachfront properties.
The ability to partake in activities nearby is important, too. If you can combine privacy and the ability to venture out, that’s key.
MG: What area do you think is the next hub for luxury properties?
RSC: Riviera Nayarit in Mexico, where we’re building out the Mandarina project, is really growing. Up until recently, there were only two hotels catering to that high end market— the Four Seasons and the St. Regis.
Now, along this coastal part of Mexico, you’re seeing luxury brands come in. We’re doing the One&Only and Rosewood. Auberge and Six Senses are both going to be under construction soon. A lot of these hotels are also being anchored as part of a master-plan community. You’re going to see an explosion of luxury homes and hotels.
MG: What’s the biggest surprise in the luxury real estate market now?
RSC: The price points have come back very, very strong since right before the crash in 2008. Developers thought we’d never see prices back up there, but we’ve surpassed ’07 and ’08 price points. There’s been so much wealth creation in the last few years, especially in the U.S., so there are a lot more buyers venturing into the market.
Mexico is particularly popular. Because of its closeness to the U.S., these homes get a lot of use from owners. They’re buying property as asset appreciation plays for the long run, but they’re actually getting a lot of use out of them, too. These can be weekend homes—less than a three-hour flight from California and Colorado.
MG: Where are the best luxury homes in the world and why?
RSC: Every country has them, but there are some that just stand out more than others. In the U.S., Aspen jumps to mind. In Mexico, if you look at Cabo or where we are; in Punta Mita, you have outstanding high-end luxury homes. But any kind of major resort destinations, like Hawaii, and parts of Europe, have amazing homes.
MG: What’s your favorite part of your home?
RSC: The way it’s situated, which is totally indoor-outdoor living. That’s what I most love and appreciate about most homes. If you’re in your home, and you’re always looking out at nature, it brings you peace of mind and tranquility, and it invites you to spend more time in your home.
MG: What best describes the theme to your home and why?
RSC: It’s a modern home with lots of glass sliding doors so you can open all the spaces up, and I use a lot of natural materials—a lot of wood and marble. The windows give you a view of the surrounding nature.
MG: What’s the most valuable thing in your home?
RSC: It’s an intelligent home, so the systems I put in. It’s all wired, and you can control everything—lighting, sounds, climate, etcetera—from one app. That, and a home theater system. So really, the electronic additions I put on the house.
MG: What’s the most valuable amenity to have in a home right now?
RSC: That depends where it’s situated. For homes in coastal areas, like ours, it’s about swimming pools, terraces and outdoor entertaining areas. And people want to make sure indoor spaces open up to seamlessly connect with those outdoor spaces.
Following that, most people want a media room and a wine room, so when they’re not out in the sun, and entertaining, they have a place to rest.
MG: What’s your best piece of real estate advice?
RSC: If you’re going to invest, really look into who the developer is behind the development you’re investing in, and what the long-term master plan is. Make sure everything is very clearly laid out. People will go into a development and just look at the lot—the view, the location, the unit they’re buying. But you want to make sure bylaws are in place, and that the maximum build-out and the location of the build-out, is spelled out.
Certain resorts can become over-densified. And then you lose that privacy and those luxury elements I spoke about.
MG: What is the best area now for investing in luxury properties?
RSC: Branded properties are a good bet. When you buy a branded residence, like a Rosewood or a Four Seasons, it has several advantages. Firstly, you can enter it into the rental market, and, secondly, it’s headache-free. That’s particularly important for a second or third home. You’re not dealing with any of the headaches, and it’s appreciating in value. That to me, that’s the best place to park money.
MG: If you had a choice of living in a new development or a prime resale property, which would you choose and why?
RSC: Generally, a new development. If you’re someone who’s buying early, you’ll get a better deal and your investment will appreciate much more.
*Originally posted on Mansion Global
