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Tijuana condo craze continues in to 2018

There are roughly 600 condos expected to hit the market in 2018, but is the market there?

Tijuana continues to build vertically with more residential options in 2018 than last year.

  • There will be roughly 500 condos for sale this year.
  • Many condos are under construction, likely to be completed over the next three years.
  • Crime, currency woes and competition among builders has not slowed building.

Tijuana condos: Here's the full story

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A lot of money has poured into Tijuana the last few years, fueling a historic residential construction boom.

The Mexican city will have roughly 500 new condos coming on market in 2018 that average around $200,000 to $300,000. Prices are affordable compared to San Diego County, but aimed mainly at affluent Mexicans.

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Vertical building began in earnest about 2 ½ years ago and has seemingly weathered a massive increase in violence last year, a record 1,744 homicides in 2017, said the Baja California Attorney General's Office. Other obstacles, like a dropping peso after President Donald Trump's election, have not stopped construction.

Developers say they worry about market saturation, but it hasn't happened yet.

"Every winter, we think, 'Is this going to be the end of the demand?' " said Alberto Kibrit, developer with Urban Living.

Kibrit's firm has been building offices, hotels and began work two weeks ago on a 38-unit condo project in the Chapultepec neighborhood, where most construction this year is based. Condos will range from roughly 1,614 to 2,400 square feet and prices start around $350,000.

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He said the key for success for future development in Tijuana will mean an emphasis on quality.

One of the most expensive new projects, Nivel Diez in Chapultepec, has two 10-story towers with condos ranging from $368,000 to $669,000. The first tower, with 37 units for sale, is expected to be completed by spring.

Nivel Diez's amenities rival high-end condos in San Diego County. It has a 79 foot long pool, two Jacuzzis, 24-hour security, sound systems installed throughout the units, a fingerprint security system, a five-story clubhouse with a roof garden and gym, as well as features to assist disabled residents.

Salomón Tacher, developer of the Nivel Diez project, said he targeted the high end because the market is eager for it, especially after years of practically nonexistent residential building in the city.

"There is a lot of money here in Tijuana," he said. "There is a need for this."

Homeowner association fees are expected to be around $200. The average condo fee in 2015 in San Diego County was about $327, said real estate website Trulia.

Tacher said his company, Entornos, tries to be selective in who it sells to.

"We focus on creating a community," he said. "We don't want to sell a condo to anybody. One person can ruin your project."

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Salomon Tacher developer of Nivel Diez Resort Living in Chapultepec neighborhood. Explains how Nivel Diez will be different.
Salomon Tacher developer of Nivel Diez Resort Living in Chapultepec neighborhood. Explains how Nivel Diez will be different. (Alejandro Tamayo / The San Diego Union Tribune)

Mexicans still make up the majority of the market, with most developers reporting the number of American buyers ranging from 2 to 10 percent.

Unlike the early 2000s when foreign money fueled much of the residential building, including the failed Trump Ocean Baja project, developers now say their finances come from private Mexican investors.

Most of the new development has centered on the golf course, Club Campestre, but the Cosmopolitan Group is building a 66-unit project in the heart of downtown. The 12-story Distrito Revolución, with condos ranging from $130,000 to $200,000, is walking distance to many of the city's bars, clubs, restaurants and arch at the end of Avenida Revolución, Reloj Monument.

Developer Salomon Saul said placing the project downtown made sense given the resurgence of the area.

"We noticed a lot of people were returning there. Restaurants, private breweries, concerts," he said. "A lot of things were coming back to central. It's the only street in Tijuana where you can actually walk."

He predicted the future of condo development in the city will be smaller units. Distrito Revolución has condos from 678 to 904 square feet.

"Most people, couples, they don't need an apartment that is (1,076-square-feet)," he said. "It's basically for anyone who wants to save money."

Budget-minded shoppers might also like their options at Torre Espacio in Chapultepec. The 68-unit complex offers condos without finishes, meaning the buyer is responsible for putting in tile, closets and other cosmetic parts of the unit.

A 1,076-square-foot unit without finishes is $120,000, but can cost an additional $20,000 for finishes. Construction on the five-story building began in August 2016 and will be completed this December.

"The advantage is the customer has a lower price for their condo at the moment they buy," said Paloma Kelly, a sales representative for Tijuana real estate agency Probien.

While there are difficulties in crossing the border each day, it is still considerably cheaper to live in Tijuana for Americans. The median price for a resale condo in San Diego County was $405,000 in November, said real estate tracker CoreLogic.

There are very few new condo projects in the county and most are high-end. Prices at the 41-story Pacific Gate complex on Harbor Drive started at $1.4 million. Another new project still under construction, 41West in Bankers Hill, began sales at $1 million to $4.5 million.

Americans can buy in Tijuana by establishing a 50-year bank trust that typically costs $2,500 and up, and has a yearly fee of $500. Holding a SENTRI (Secure Electronic Network for Travelers Rapid Inspection) card from U.S. Customs and Border Protection can speed up a commute to the United States, but approval is not guaranteed.

Developer of Urban Living, Alberto Kibrit explains some projects for 2018.
Developer of Urban Living, Alberto Kibrit explains some projects for 2018. (Alejandro Tamayo / The San Diego Union Tribune)
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