Sorry to bring the sad news again. I just received an email (CC along with a large list of other people in Cancun) from Liff. La Casa de las Margaritas after 9 & ½ years of providing great service offering excellent Mexican Food and their almost trade mark Margaritas & other drinks has closed down indefinitely. :cry: La Casa de Las Margaritas was located @ Plaza La Isla opposite corner to Micky D’s The past 6 months have proven to be beyond challenging to all types business all over Cancun and Riviera Maya. I hope those people can find work elsewhere soon. Vic --
There seems to be a disconnect between landowners, landlords, lessors and the clientside business and homeowner community. Unless there is a realignment of perceived values for real estate we're going to see more of this. People are abadoning their homes because they can't afford the upkeep and mortgages. Businesses are abandoning their businesses because they can't make the lease payments, yet high-rise condo developers are still asking in excess of a million dollars for apartments with single-layer sheet rock partitions. Even in the modest, 18 house condominium where I own my home, absentee owners who live in the DF, Miami and Houston are asking incredibly inflated prices for their houses. A friend who runs a restaurant supply business invoiced 5000 pesos for the entire month of April. Another friend, a construction contractor, is laying off 90 percent of his employees this Friday. My rental properties are empty, even when offered at a reduced rate. There have been any number of days this month when the Ritz Carlton was empty and Le Meridien had fewer than 10 rooms sold. There seems to be no realization of the world-wide economic crunch and no planning for the eventual recovery. Cancun will not return to the pre-Wilma economy it enjoyed, but you can't convince any of the grupos, consortiums, fill in the monopoly you want, that adjustments in planning and tactics are called for. It seems as though Mexico and planning don't belong in the same sentance. We're going to be looking at incomplete concrete shells and empty tiendas for a long time. How sad.
I think this is true. The Mexican people I'm close to seem to abhor planning. My husband says he won't plan just in case he doesn't want to do whatever it is when the time comes. I say don't plan things you don't want to do, but anyway. What happens is that I plan things and drag him along and then he's happy about how well things go when you plan them...ahem. I experience a serious stubbornness in the culture here regarding real estate and rental values. Over and over and over I see a landlord refusing to fix up a property, so the tenant moves out, and then the property stays vacant for months or years after that. And if the landlord had simply put a little money into fixing up the property the tenant would have stayed on. That's nuts! And in our neighborhood there are several homes for sale which have been sitting empty on the market for well over a year. In each case the owner expanded the house, meaning they pumped money into it, and now they won't sell for market value because they've got too much money in the property. That's nuts too! And how overbuilt is Cancun now? How many new vacant condos are just sitting on the market here? A developer in our neighborhood went and built a condo unit with a price tag that is completely out of line for the area. These tiny new two-bedroom postage stamps are selling for more than the 4-bedroom used homes a block away. Well, scratch that, they AREN'T selling, the building is sitting nearly empty. I think this is what's called 3rd world thinking. And this attitude is part of what keeps Mexico a 3rd world country.
Mix, You are so right. Real estate prices have not yet taken much of a hit, yet products sits unsold and vacant. Interesting though, I ran into a guy that I know who owns a few rentals and he told me had chopped the rent by about 20% to keep the tenants there as they were struggling in this economic mess just to pay the rent. I thought that was quite the right thing to do. Some money coming in is always better than nothing, sort of like the members of the opposite sex that an unnamed friend dates (better than nothing, aka, BTN's)
La Casa de las Margaritas Vic, I'm not surprised that they didn't make it. I've been going there since Jan.2001 on every trip here. It was always a place we could count on for a very good meal, great service and wonderful entertainment. Until................our last visit this past March. We took my oldest friend and his wife there for dinner. I bragged about it to them as a great place. The service was terrible, the menu didn't have any Mexican dishes offered, and the food was barely OK, with very small portions and the bill was high. I was so embarrassed. My friend still teases me about it.
My last trip there was late March early April. First of all real estate prices are down, at least in the high rise condos in the hotel zone. If buyers are patient you can pick them up at pre-construction pricing from back in 2005 before their even the 1st brick was laid. Yes there are still a lot of owners in denial what their places are worth, and this happens in any market worldwide. Anyway we had an opportunity to pick another unit up at a bargain price and even 15% below 2005 pre-construction pricing. However we passed because my wife and I were talking and going over the fact how slow Cancun was and how many places were closing. Keep in mind this was right after/during the drug cartel media frenzy. So now the swine flu frenzy and I cannot possibly see how a lot of businesses will even make it through this. So many small businesses are so cash flow dependent they cannot possibly survive 2-3 consecutive bad months. I would imagine we will be seeing a lot more businesses go down in the very near future. They will start falling like dominoes here soon. This will in turn hurt tourism even more because tourists do not like seeing empty businesses as it makes the area look depressed. Look at the alley way across from the forum. That is prime real estate and that whole thing should be gutted out and re-built with a clean fresh look but it will never happen until tourists are back and the place is thriving. These things are cyclical in nature and it may not be a bad thing. Because eventually landlords will lower rents and new businesses will come in and tourists will be back. The new businesses will be on much more solid ground because they would have negotiated better lease deals during the bad times. The next few years should prove to be very interesting and you can bet the place will be a lot different
