Tijuana condo boom will transform the border town’s skyline. Will it be the new San Diego?
José Luis Corona didn’t expect to move back to Mexico when he left for the United States 12 years ago, but that was before he saw the Horizonte luxury condominiums in Tijuana.
The 54-year-old, originally from Mexico City, already owns a home in Chula Vista but decided about a year ago to buy a $290,000 Horizonte condo, which features a roof garden, gym, security and views overlooking the Club Campestre golf course and much of the city.
Corona, who works for an aerosol can manufacturer with offices in San Diego, said Horizonte’s amenities are substantial for the price — around $500,000 to $750,000 less than what the average new condo built in the last two years goes for in San Diego County.
“I like both places,” he said, “[but] I think things are improving a lot in Tijuana.”
Corona is one of hundreds of Mexican nationals who have embraced home ownership in Tijuana, a city long known for its transient population.
Developers are constructing roughly 2,000 condos in towers that will drastically transform the skyline of Tijuana over the next two years. Some of the planned towers, already approved by the Mexican government, are more than 30 stories and will become the tallest buildings in the city.
The prices are much cheaper than on the American side of the border, but the new condos aren’t exactly going for a paltry sum. Prices typically vary from $200,000 to $300,000 per unit, and some penthouses have reached $700,000.
About half the buyers are Mexicans who work in San Diego County, according to real estate agency Probien. The other half are Mexicans who have benefited from Tijuana’s growing manufacturing sector or are retirees.
Americans are a nonfactor, making up less than 2% of presales, Probien said.
The building boom is the biggest residential construction push in the city in a decade and the most condo building in its history.
“Give us five years. The whole city is going to be vertical,” said Sergio Gonzalez, business developer for Probien.
It isn’t just the San Diego Regional Chamber of Commerce’s estimated 25,000 to 30,000 workers who cross the border northbound every day to work who can afford a new condo. Developers say there is pent up demand from years of meager construction during the recession and drug violence from 2008 to 2010.
Probien said it gets frequent calls from people looking for single-family homes, but like San Diego, the amount of buildable land is shrinking. So, developers have turned almost exclusively to condos.
Tijuana’s builders must contend with the shadow of Trump Ocean Baja and other projects that went bust, causing Americans who invested to lose out on thousands of dollars.
Those projects failed, city leaders said, because they were financed by presales of condos, so when buyers pulled out as the economy tanked, those projects abruptly halted. Today, developers working in Tijuana say most of the new development is already financed.
“There’s a lot of capital in Mexico right now,” said Hector Bustamante, director general of Bustamante Realty Group. “The difference [from before] is we have experienced developers and we are doing our due diligence.”
Bustamante estimates more than $100 million will be invested in Tijuana condos over the next three years.
The crown jewel of Tijuana’s residential building boom is Bajalta, a 63-acre development in the center of the city with 400 condos that is scheduled to start construction this winter. The first residential units and retail components are expected to be finished by 2019.
Bajalta will have four residential towers, an office tower, hotel and a mall. The developer is Mexico City-based Artha Capital. Bajalta is designed by New York based-SHoP Architects, which worked on the Uber headquarters in San Francisco and Google offices in Mountain View, Calif.
Mario Roberto Rubio, Artha Capital project director, said sale prices for the condos have not been set, but presales will begin in November.
Artha Capital, a private equity firm that focuses on real estate investments in Mexico, says it has more than $500 million in assets under management. Its other current projects include a 2.9-acre shopping and entertainment center in Yucatan; a 13-story mixed-use project in Veracruz with a three-story shopping center, movie theater, 10-story office tower and five-story hotel; and a 14.6-acre project in central Mexico with nine six-story office buildings.
For most of the projects, presales typically require a 15% to 30% down payment. The majority of developers and real estate agents in Tijuana are not as open about revealing sales prices as in the United States, preferring instead to wait until projects are closer to completion.
The flashiest new project is Adamant Tijuana, a 32-story tower near Estadio Caliente, the stadium used by Club Tijuana. Out of 180 units, 142 have already pre-sold, Adamant said.
Aimed at millennials, the developer Milk Life Investments is using videos and glossy promotional materials with models in swimsuits, fashionable young people driving sports cars and parties with people drinking Champagne.
Adamant condos are smaller than most in Tijuana, about 400 to 950 square feet, and run from $77,500 to $191,000.
The first development most border crossers will see is NewCity Residencial, off Boulevard Padre Kino less than a mile from the border, which has ambitious plans to build more than 400 condos. For now, around 60 are for sale for $220,000 to $400,000.
Construction on NewCity began in 2006 and will include seven towers. The luxury condos are two to three bedrooms and some are already for sale. For example, a 1,883-square-foot three-bedroom unit is going for $350,000 on Vivanuncios, a Mexican website similar to Redfin or Zillow.
NewCity’s Diamond Tower, 27 stories at 334 feet, is now the tallest building in Tijuana. The development also will include NewCity Medical Plaza, a 26-story tower with doctors offices, a medical lab, a surgery center, and a 140-room hotel. The fourth residential tower is expected to be completed by December 2017 but there is no set date yet for when a fifth tower will be completed.
Another closely watched project, Cosmopolitan Residences, is aiming to become LEED-certified, which stands for Leadership in Energy and Environmental Design. There are just seven buildings in the city that have the environmentally sensitive designation, says the U.S. Green Building Council.
Cosmopolitan’s 42 units will range from 1,453 to 7,168 square feet and cost $400,000 to $700,000, making them some of the most expensive condos in the city.
Greg Shannon, a San Diego developer building a boutique hotel in Tijuana, said it makes sense for San Diegans to seek housing south of the border, especially with increasing prices on the U.S. side.
The median home price in San Diego County hit its highest point in a decade in August, $498,000, said real estate tracker CoreLogic. Meanwhile, rents have gone up 8.9% in the last year, averaging $1,743 a month, said MarketPointe Realty Advisors.
About 52% of San Diegans owned their own home in 2015, but that figure has continued to decline from its 1960 peak of 58.6%, according to the U.S. Census. San Diego County’s home ownership rate in 2015 was one of the lowest of any metro area in the United States and below the national average of 62.9%.
San Diego real estate consultant Gary London said he anticipates closer ties between the two cities in the coming years, largely because of housing costs.
“The pressure for inexpensive quality housing might find its way in Tijuana in the same way it finds its way, to a much larger extent, into Murrieta [Riverside County],” he said. “It’s simply too expensive for people with low-paying jobs to live here.”
London said San Diego’s dependence on Tijuana workers, especially in the hotel industry, and a substantial number of their children attending school in the United States, have already laid the ground work for future housing solutions.
“This idea that they are building large condo projects in Tijuana is unprecedented,” he said. “It makes it feel more like San Diego.”
Molnar is a staff writer at the San Diego Union-Tribune. Union-Tribune page designer Ricardo Guerrero and videographer Alejandro Tamayo contributed to this article.
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