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172 Investment Expert Cristina Roberts shares his experience and advice investing in Costa Rica

172 Investment Expert Cristina Roberts shares his experience and advice investing in Costa Rica
172 Investment Expert Cristina Roberts shares his experience and advice investing in Costa Rica

Podcast Transcription

[Richard Bexon]
Cristian, how are you doing?

[Christian Roberts]
Hey, Richard, doing well.

[Richard Bexon]
Thank you. Great to be here. No, not at all.

Again, it's an absolute honor to get you on here. I think you have a very unique viewpoint into Costa Rica. You're a part of this machine, a large cog, as I like to say, of this machine of Costa Rica, so it's going to be great to get your viewpoint on this and really give some people, the listeners, a little bit of advice out there from your perspective.

But, I mean, the first question I'd love to ask, Cristian, is, I mean, you spend a lot of time kind of bouncing through Latin America and also North America as well, especially recently, but with real estate in North America on somewhat of a downward trend, what are you seeing happening here in Costa Rica?

[Christian Roberts]
So, first of all, again, thank you for having me, Richard. It's a pleasure to be here, and ever since the first couple of podcasts, I've been listening to the podcast. I really enjoy it.

And, yeah, I've learned quite a bit from it, actually. It's been fun. So I'm really, really happy and humbled to be here with you.

You know, I guess, and this is generally what I've been hearing, and my thoughts on what the crowd in the States might be seeing in Costa Rica, vis-a-vis what they are seeing locally. I think there's two things. One, we are a lot less volatile, okay?

We have a lot less volume. Therefore, we're a lot less volatile. We are lagging in terms of when things happen in the U.S. We have certain time behind that to actually see it happen here. And what that does is it kind of just puts things in a little bit of a slower motion. So I think that makes people feel a little bit more in control in general. Second, I think we're a lot less tied into the debt world than the U.S. is right now. So that's also something that gives them probably a little bit more of a slower view on things. And with slower, I don't necessarily mean bad. But the reality is that in Costa Rica, there's different phrases that I've heard recently that I think sum it up well.

I was in a conversation with an important developer that's doing big projects in Costa Rica, and he was telling me, listen, to me, Costa Rica is like Hawaii 30 years ago. So the way I see opportunity is by just going back in time to what I saw in Hawaii 30 years ago. And it's been a phenomenal track, and we've been able to really accomplish a lot of things.

And I think that that's what Costa Rica is representing today. It's one of those markets that gives you what the market is asking for. I know that sounds redundant, but it really is.

It gives you nature. It gives you people. It gives you spaces for individuals, for families.

It's completely new. I mean, if you discuss it, people here think that Costa Rica is a really mature market. We are nothing.

I mean, we are small by any means. I mean, when you look at places like Cancun, you know, Cancun has 18, 20 million visitors, just Cancun. That is a mature market.

That is a big market. We are very small. So there's everything to be done in this country.

And I think that's something that especially the more savvy investors, and that's one thing that is interesting on who's coming down, are seeing that. And then I think now you have two different profiles of investors coming to the country. If you go back to the global financial crisis, when that hit, I think at that time, a lot of the investor base coming from outside was more opportunistic, looking at, hey, how can I come in, buy a lot of land, develop this?

And a lot of them were probably in their 60s and things like that. They had been accomplished developers mainly in the States. And then they found that it's not the same thing.

And then the global financial crisis hit. We're going to sell to half of a percent of the baby boomers. Strategy fell through the cracks.

And that kind of stopped for 10 years. Then if you fast forward to 2018, pretty much nothing happened during that decade. Then we started building.

And what has happened with the pandemic is that the profile of consumer completely changed. So what the country has today is that you have a lot of more patient capital coming in with a longer view, with a longer term view. And I think that's what Costa Rica gives.

Costa Rica gives you stability going back, stability projected. Obviously, it gives you a phenomenal basis when you look at what we've been doing from a natural asset perspective. You know, that's really important.

Duplicating rate for its coverage. All of the different initiatives that have been recently recognized for the country around the world. Education, you know, just the structure in itself.

And like my dad likes to say, Costa Rica is, you know, an overnight success, 50 years in the making, right? And I think that's what's really cool. When you start peeling the layers of what the Costa Rica opportunity really represents, you find there's multiple destinations across the country that have slowly been maturing to be able to cater to tourists.

You'll have fiber optic. You'll have, you know, good access to redundancy and electricity. You'll have, you know, you can fly anywhere fairly easily.

You'll have schools. So now when you go to Rosario, when you go to Santa Teresa, when you go to Guanacaste, there'll be schools where you can put your kids in. American schools, English format schools.

I mean, there's there's a different offering that actually says, hey, you can you're welcome here. You can come and you can actually live here and bring your family. And I think that's, again, a longer term view than just a two month, three month place to stay over the winter or things like that.

So I think that that's something that people are seeing here. We're still a lot cheaper than doing business in the States in general. There's obviously two markets when you're looking at markets like Papagayo in that area.

Las Catalinas, you know, Sapotal, Discovery Land and all those markets, you know, those guys are hitting, you know, $20,000 per meter, $25,000 per meter. Insane. Insane.

Consistently, you know, hitting those prices and you're well above, you know, 1,500 square foot in general in those areas. That's one reality. And I think that's a Costa Rica that we didn't have before the pandemic that has now positioned and is saying, you know, that that's a new reality.

I think today when a person in London or New York or something, you know, where am I going to buy a second home or where am I going to buy a vacation home? Costa Rica is there right next to any other of the top 25 global residential markets. And I think that's important.

And then you have the rest of the country. And, you know, it's more that upper upscale segment that has been developing over time. I think that one's stable.

You see our numbers. Our numbers have been stable. We've bounced back fairly well from the pandemic.

Still, there's a lot of people, you know, hurt from the pandemic. But in general, you know, the numbers and we're performing well. And then in addition to that, take away tourism, take away real estate.

We are the country with the highest foreign direct investment per capita in the world. OK, so when you look when you look at that, you know, people feel comfortable. You know, if it's good enough for Intel, if it's good enough for all these medical devices, if it's good enough for all these technology companies, if it's good enough so that the U.S. actually signs the chip act with Costa Rica to make this a hub for chip making over the next years and things like that, you know, it just creates a lot of confidence. And I think that's what the country has been, you know, has been really representing over the last decade or so. But especially after the pandemic, it's become very relevant.

[Richard Bexon]
I mean, that may be the best summary I think I've had on the podcast. I have 171 episodes, so thank you for that. I mean, it's just your again.

This is why I've always wanted to get you on. Just your viewpoint is very wide and also very deep. And, you know, I always say, I mean, look, we're just getting started here in Costa Rica.

We really are. You know, and people are like, wow, it's kind of expensive. And I'm like, you know what, compared to Mexico and Hawaii, it's not it's not expensive.

I mean, there are hotels there that charge a lot more than we do and restaurants that charge a lot more. OK, Costa Rica is not cheap compared to Dominican Republic or Mexico or maybe some other Latin American countries. But, you know, I mean, as you said that we have stability, you know, it's safe.

Like it's a great place to come on vacation. Yeah, it's not the cheapest. But also, I think value for money from his experience has to be up in one of the top locations in the world.

[Christian Roberts]
100 percent, and I think our value proposition has really improved as well. And, you know, money is the scariest thing out there. Right.

So nobody is dumb. Nobody comes in and pays $10 million or $15 million because it's a dumb thing to do. You know, they'll run.

They'll take the money elsewhere. So I think that the reason that's happening is because Costa Rica's value proposition is a lot better. How is it a lot better?

Now you have a very high end market that is pulling everything up. And that's the impact that four seasons had back in the day. And it was the first thing that happened.

Boom, everything went up. Indifferent of where it was, you know, just because the positioning went up. And now you have, you know, brands like Waldo Fristori under construction, Ritz Carlton under construction.

One and only hopefully will be under construction sometime soon. You know, Six Senses has been around. Aman has been around.

And there's been talks. And there's these brands every time that one of those brands comes to the market, it just lifts the country up and it gives us what I like to say, a year and a half or two years of additional runway. Right.

Because whatever they're going to do when they launch is going to trick. We're so small. Going back to that point, it's going to trickle down and affect the entire country.

So I think that that's great. But the value proposition I was I was I was referring to as well is that from a real estate perspective, indifferent of pricing, forget about real estate. You know, why?

Why have companies like Intel and all these companies come in the past? You know, the real estate, it's not because it's the cheapest. If you go to the office market, our office market is not that different from Houston or not that different from Austin.

You know, the prices are not that up. OK, but the advantages are in the tax incentives. The advantages are in the staffing, in the quality of the staffing and the value that you get from the people.

And I think when you now take that into the real estate and hospitality world, same thing. Your bang for your buck here is that you're coming in and you're getting really authentic experiences in the different places that you go. You have digital nomads.

You have different types of short term residential benefits or longer term residential benefits where just by not paying your residents tax in the state, wherever you're from, by moving your residents here, that's a ton of money, especially for a certain segment. And then in addition to that, what you're able to deliver is a real remote destination that services all of your basic needs in a very good way. So going back to, you know, infrastructure, you know, you can be in Nosada, you can be in Santa Teresa, you can be in Monteverde, you can work out of your hotel, you can work out of your house, your kids can go to school.

You have a very interesting community. The pandemic was phenomenal for our gastronomic offering because, you know, you have a bunch of chefs that couldn't go back to Europe or couldn't go anywhere else. Costa Rica and Mexico were open.

They came here. They loved it. Then they started seeing a lot of high networks and people around them that were willing to pay for good food.

Why not set up shop here? They're probably making more money. It's costing them peanuts and they're selling, you know, a very high quality type of food.

So I just think that the offering in general has improved. And then in addition to that, one thing that has matured a lot, which is not necessarily related to the tourism industry, but now it is, is the natural capital and all of the environmental part that the country represents. So what you have today is a very interesting effect that comes from generating data.

You know, so Costa Rica claims it's the country that has the highest concentration of biodiversity in the world. I think that that's probably not true, but what's the reality? We are probably the one that has measured it the best over the last three decades or four.

So if you look at that, what has that brought? It has brought a lot of international organizations, a lot of conservation, scientific organizations, universities, just people that start generating this content that, again, going back to the reference of overnight success, 50 years in the making. You know, those are the types of things that build up and that start creating this basis where, hey, wait a minute.

This is not fabricated. There's real roots here. You know, and that person that I talked to, they've really lived here for five, six, seven, eight generations.

And the way they're doing this is the way that they did it five, seven, eight generations back. And they didn't move here because it now became a tourism Mecca. The country has kind of stayed as is, and it's just slowly opened up to the international community and tourists.

And there's one thing I'd like to mention that I think is fabulous. And there's a there's a sculpture here called Jimenez de Airelia. And he's he he has all this philosophy around spheres and everything he does is around spheres.

And part of what he's established is that going back to them and forgive me if you're listening to this and I'm going to miss some of the things you're saying.

[Richard Bexon]
I'd be honored if he was listening to this podcast.

[Christian Roberts]
Yeah, it'd be great. Definitely. But so one of the things that going back and he says it and a couple other people said as well.

But if you go back to the indigenous cultures in Costa Rica, they're very different from the rest of Latin America. And why is that? So if you look at the topography and geography of Latin, Costa Rica in Central America is at the very end of the farm, if you put it in some way.

So we're the we're the last frontier of the farm, you know, Nicaragua's flat. And then there's those mountains way at the back, which used to be Costa Rica. Remember, Guanacaste was part of Nicaragua.

So who would want to go up to those mountains and walk all of that, which was dry, etc.? And then from Panama or from South America, there's the Darien. So the Darien still today, there's no way to pass.

You take a ferry to go to Panama if you want to drive, because there's there's just no no no way of going through that particular area. I mean, to Colombia. Sorry.

So we were in this area that was kind of completely segregated from the rest, small communities. And what happened was that if you compare those indigenous cultures to Mayans, Aztecs, you know, etc., they are pyramidal. You know, and you'll see pyramids and everything that they've done and the hierarchy that they were that they used was also like that in Costa Rica.

It was spherical. We were much smaller. We were a lot more interdependent.

And it was also something interesting that in some of our indigenous cultures, women could be the leaders of the of the of the tribe. Right. Which which not in all of the tribes that was that was common.

So I think that that inclusiveness, that spherical way of thinking has shaped a lot of how, you know, how the Costa Ricans grew. And then when the social differences started appearing as some people, you know, really were more successful than others through mainly agro industry in the past, etc. It was very interesting because what happened was that, you know, the social service that we have today, which started in the Calderon presidency way before that.

The owners of the farms were already doing it. The owners of the farms had medical doctors. The owners of the farms had these stores that they brought for their people.

The owner of the farm lived next to the people, the employees, their kids played with their kids. And, you know, those those experiences created a much flatter society. And I think that, you know, going back to, again, the cultural origin from our indigenous populations and then this kind of integration, a horizontal integration.

I think that kind of has created a Costa Rica that today is this and it's just a lot more open than a lot of other destinations. And we've been able to throughout history really take in foreigners because Costa Rica has had very, you know, a very small population that in reality, a lot of us, you know, and I'm Costa Rican, but, you know, my great grandparents are Scottish or English. My on my dad's side and then on my mom's side, probably, you know, various generations back Spanish.

And then that's kind of the story here. There's very few, you know, real authentic Costa Ricans going all the way back. So I think that's just the way the country is shaped.

And that's created a very pleasant community to be part of.

[Richard Bexon]
I think that's a very unique viewpoint that I've never heard before, Christian. You know, I always thought it was, you know, due to the just due to the land being so mountainous and difficult. You know, when someone turns up, they're just like, I'm not climbing that.

Like, I'm just going to go somewhere flat, you know, like down towards the Panama Canal area or up towards Nicaragua, you know, where it's a lot flatter and a lot easier to cross. Whereas Costa Rica is really, you know, it's a mountain kind of range to an extent that runs through. I mean, you might call it hills, but it's a mountain, you know, it's a mountain.

But yeah, I mean, it's we live in a special place here, you know, and I don't think until you've been here and lived here and then gone out or you've come from a different culture and come here, you just realize how special this is. I mean, you know, I go back to the UK and after like two or three days, I'm like, I want to go back to Costa Rica. Like, just I don't know what it is.

Like, there's just maybe just because I'm so ingrained here, but there's just something special about this place.

[Christian Roberts]
Well, you're not alone. 30% of tourists do the same every year.

[Richard Bexon]
Yeah, true. Very, very true. But I mean, well, let's change gears a bit into kind of investing kind of in Costa Rica.

I mean, this is just very general, but I mean, what advice would you give to someone looking to invest in Costa Rica?

[Christian Roberts]
Okay, so just defining invest, I'm assuming we're looking for the business opportunity, that type of investment vis-a-vis owning a house, right? So if we're looking at that, I think, you know, there's several things you need to take into account. I mean, again, this is a small market.

A lot of things are in incipient stages, both from the market perspective, the depthness of the market, the sophistication of the market. So, you know, you just have to be realistic of where you're going to do business. Now, having said that, that's also where the big opportunities are.

If you're going to come and invest in Costa Rica, the way I would focus on this is, you know, really try to analyze the country from a gap analysis perspective. You know, what is happening today and what needs to happen for this to be a better place? Can I really bring that value?

Because that's the other thing. Not everybody's made for these markets that are slower. How am I going to exit out of this?

That's a big question that Costa Rica has had as a market in general that I think now has some answers to it. And we can discuss that a little bit. How am I going to fund this?

You know, the banking system is not necessarily the most open banking system for foreigners. Actually, quite the contrary. Although I have to say there are several banks really, really doing a very good job in opening up to some of the expat community here and foreign investors and figuring out how to fund them.

And then, you know, I think it's the same as anywhere else. Look at the fundamentals. But understand that, you know, this is a shallow market.

Understand that there's a lot of value to be created. It's probably going to take whatever you have in your head, multiply that by three. And I think that that's, you know, very realistic.

If you can live with that, then move forward. Having said that, for us, it doesn't take that same amount of time as it would for that person that I'm saying do it times three. Why?

And that's the other advice. Really go get the right team. That's the difference.

You know, real estate is local like anywhere else in the world. If I were going to go do something in Manhattan, I would go and first really spend time looking for the right people. And maybe it's even the right partner.

In our case, it's always the right partner. We wouldn't do anything elsewhere if we don't have that local partner that is going to help us avoid the potholes, that is going to help us with the relationships, with the funding, with the relationships, with equity if we need it, with the relationship with the right people. You know, it's just not smart in general to go into another country without a local partner.

That would be one of the most important. But then again, I mean, I think that what I would invite people to do is come here, see where we're at and think, how can we help this country leapfrog whatever we have had to live in other destinations to get to the next level? Right.

And I think that's what Costa Rica really represents, because we have a lot of very smart people. From a technology perspective, it's all here. From a construction practices, one great thing when we changed from agro economy to a services economy and all these multinationals started coming in with all of their procurement requirements and all of these certifications, etc., that made the whole construction industry evolve into a different level. When we started building the Four Seasons, the Ritz-Carlton, all of that, these construction companies became world-class construction companies. And so had all of the everything below that, engineers, architects, everything. That's why today I think Costa Rica is probably one of the countries that on a per capita basis has the better quality of players in the general real estate development than LATAM.

When you look at it, we have Gensler based out of here. We have very, very good local firms here that again are world-class. So spend your time figuring out who you're going to do things with before you make the investment.

Because the other thing people do is they come in, they go to the first land that whomever shows them, hey, this is the best opportunity in the world, they buy it or they sign it. And then they try to figure it out and realize there was one, 10 better options, two, technically there's 50 difficult things to get over. And in most of the cases, if it were that good, other people would be all over it.

This is a very competitive market. So that unique opportunity that you're the only one that has seen it probably is not true. So again, I think there's nothing different in Costa Rica to doing business anywhere else.

[Richard Bexon]
Yeah, no, no, I agree. I mean, I think that the last point that you made there about getting a good team is vital in this country. I mean, so many ways to lose money and a lot of people have done, but there's also just as many ways to make money here as well.

I think it's just understanding the market currently and where it is, where it could potentially go. But also, you know, is combining that, you know, the beauty of coming from a outside of Costa Rica and kind of looking in is your perspective is completely different. Whereas people in the country have a different perspective.

And I mean, if you can find some middle ground there between there, you know, usually that's where the magic happens.

[Christian Roberts]
100 percent. Look at our destinations. I mean, look at Nosada, look at Santa Teresa.

You know, who created those markets? They were not locals. It was a combination of a lot of foreigners with, yes, maybe some locals.

They also saw the opportunity, but it was mainly people that came with the aligned vision, with the right mindset, with the entrepreneurial, you know, capabilities and said, hey, I want to I want to make this place special. You know, I want to make this different. And then they started bringing aligned people and then organically, you know, it really started growing.

And so I think that that's a great example, because, you know, one thing I would say is that if you look at any project with a mid to long term view, again, going back to what we were discussing earlier, you know, you approach it completely different. You know, you really start thinking, how can I create value today? How can I generate momentum?

How can I or who or how can I bring people to generate momentum beside me? And that's when you really start creating value and also being able to capture the opportunities, because literally in these locations, you know, in some cases there's close to nothing. And so how do you create, how do you gain traction?

You know, so if you do it yourself, perfect, like you can do it in Papagayo, but it's going to cost you a couple hundred million dollars just to get off the ground. That's not, you know, realistic for a lot of people. But if you're looking to, you know, invest a couple million dollars, you know, and do things like that, then you definitely have to get involved in, okay, how am I going to generate the momentum around me?

And I think that's, you know, I'm very, very grateful to all the foreigners that have come and invested in the country. They've really become, you know, a heart and lung for the development of especially the rural areas of Costa Rica. And it's that, it's really seeing the opportunity, understanding, you know, who do you need to bring alongside you?

And how can I start consolidating that? But think of it 10 years, what's the problem with thinking about it in 10 years that normally you can only measure the next three, right? So going, you know, maybe back to the advice, the other thing is, I would try to think of any project as a minimum of a 10 year project, and then divide that in three phases of three years, and identify how can you add value every three years?

Okay, that to me is key. How can I, you know, once I did the first phase, how can I really do a second phase that it's not just more product? How can I do a second phase that really improves the lives of the people that are already there and the community, and then also adds value?

And if it's, you know, big enough tracks, then you can think of a second hotel or, you know, something else, things like that. But if not, you know, how can I really create value over time? And a lot of that is programming and Costa Rica is all about programming.

The great thing you have in Costa Rica is that what people value the most is not the hardware, it's the software. And that's what people value the most. When you people leave at the airport, and they do the exit polls, the number one thing they always say is, what did you like most?

The people. That's free. Okay, the people are already here, they're already around your project.

That one's free. Okay. The other thing, nature, that's also free.

Just don't cut it. Don't screw it, you know, don't screw with it, you know, just try to be an enabler of that, you know, interaction with nature. And I think that's the beauty of Costa Rica that, you know, it's such a dense, you know, a dense country.

[Christian Roberts]
It's such a small area, and we have 400 plus microclimates. You can literally move five minutes from one place to the other. It's a completely different biosphere, things like that.

So what that allows is really just get creative on how you can create these experiences and take advantage of that is there, but think of it in a phased manner. And I think that that's something that is important. But again, going back to your point in terms of how to really take advantage of these opportunities here and how to create value, I think it's that mix of coming with a different view and a perspective on life that Costa Rica enables people to see as a blank canvas and really gives a lot of free tools for people to play around with.

So I heard this the other day, which I thought was amazing to hear. Costa Rica is like going into an open source where everything there is and everything is free. And that was really cool.

And I think it's not far off from the reality.

[Richard Bexon]
Yeah, I mean, look, the canvas that's painted for Costa Rica is pretty beautiful. You just need to do a couple of touch-ups on it, and you've got a masterpiece there. OK, I mean, I think we've covered quite a bit of stuff there on Costa Rica, and the viewpoint is, again, it's valid.

It's very unique, and I think the listeners are going to be loving this. I mean, your day job, Christian, Prime, Crayola Capital. Give the listeners here an idea of what you guys do and how you guys potentially add value.

Well, not potentially, but how you add value.

[Christian Roberts]
Well, let's keep it in potentially. No, no. So just very quickly, I don't want to take up too much time on this.

So from our side, Prime is the result of a vision that started in 2007. I come from an investment banking background and a legal background. And I started seeing a lot of M&A transactions where, back in the end of the 90s, early 2000s, real estate would move from one side of a transaction to the other at book value.

And it didn't make sense. And that was just a very basic question. Why is this factory or building or whatever not priced beyond whatever that's in books?

Because when you value a company, you do it for multiple on sales, multiple on EBITDA, multiple on whatever. And back in that day, since there weren't that many tools or information, it's just, OK, whatever the books say and whatever you have in guarantees, the balance will keep it there. So that really started a mental process where I said, OK, I want to understand this a little bit better.

And we ran, I was in New York visiting some friends. And they were having a conversation in Columbia where Bob White, who's the founder of Real Capital Analytics, was giving a speech. And it was interesting because he was talking about how he, being a partner in Goldman Sachs, stepped down because he was seeing, and started RCA because he was seeing all these opportunities around valuing real estate, understanding the transactions, and the REITs were really taking off, and a lot of things.

And he created this company to do that. So I contacted him. I was 27 years old and told him, listen, it was actually Joe Manina, who's one of his partners there, that I started the conversation with and said, I really am working out of Costa Rica.

I'm going to build this company. We want to be sophisticated and data-driven. There's no data here in the market.

So can you give me access to your tools? And we'll give you whatever we come up with. And I'm sure you're not going to get a lot of clients from Costa Rica, but it's going to look sexy on your map to have data coming from this part of the world.

And I think it probably made, they appreciated the contact. And we created a data relationship, data sharing relationship that was solid for over a decade. I think we got the better part of it.

Because what it did, it gave us tools to understand real estate. And so through the tools and the data that they gave us, we were able to then go and look back and say, OK, this is where cap rates should have been historically for the past 10 years. This is how that correlated to, in the case of the offices, to the services GDP.

This is how that correlated to just general economic growth, population growth. So it started giving us tools to be able to extrapolate from macroeconomic indicators that were very predictable and say, this is what the behavior should be. So it gave us a little bit of forward-looking capabilities.

And I'm not going to spend too much time on that, but that just gives you a little bit of how we approach things. So that data-driven approach then allowed us to start running through big portfolios of some of the bigger groups in Central America, companies and families, and just helping them understand what the value was, what to do with them, how to really develop a business plan and a strategy around maximizing real estate. Going back, we had a client that had, they thought they had about $80 million worth of real estate.

They were raising capital in New York, and they ended up having $400 and plus million dollars worth of real estate after moving it from book value to market value. Obviously, all of their indicators improved. And I think that is a good way of showing the value of really doing data-driven real estate.

So Prime, what it does as a company is it really focuses on uncovering the business opportunities, finding the matrix where the data is, where the proper financial models are, where best practices are, and we're really tied into bringing that into interpreting the opportunities in Costa Rica. What does that mean? We work with some of the more sophisticated developers in helping them put together everything from day one.

What do I do with this 300 hectares at the beach? And how do you structure that? How do you model that?

Who do you bring to the table? What's the process? How do you add value over the next 20 years, which are complex things to address?

Then we also have the portfolio owners that, again, need to have a strategy on how to maximize their returns there. And then more and more often, we're trying, and this is because we really believe that that's a very strong way of adding values. We're trying to really help people doing projects, especially that are not local, to be that connection here.

Here, if you're buying 100 hectares of land somewhere to do something, let me first let you understand what you bought. You bought a 40-year project, not the five-year project you thought you bought. And hey, by the way, you're not gonna be able to pull this off in five million.

You're gonna need 50, right? So how do you gap that? How do you do that?

What's the strategy around that? How do you bring? So we're doing a lot of that.

And then I think we're also in the company, we diversified into different smaller companies that we do market-driven analysis and we'll have market intelligence companies and things like that, that also help us understand pricing, help us understand, again, projections of different markets, the gap analysis to understand where we believe things are gonna be hot over the next couple of years and why, just general real estate advisory.

So that's fine. And then on the crypto capital side, back in 2017, 10 years into our company, we went through a process where can we really add value? And one of the things that was frustrating, I think the experience with those previous 10 years was phenomenal.

We did almost 300 projects in 20 plus countries here in LATAM mainly, and it was really great. We had the advantage of learning with other people's money, right? And we saw a lot of things not to do and a lot of people that were very successful and that was really fun.

But then we said, one thing that we're really not getting out of this is that our vision, we're sacrificing our impact vision. We're sacrificing what we really wanna do for our region. So Creo Capital, which is the name of our private equity arm is Creo from the verb believe in Spanish, Creo.

And it's called Creo because we believe in the capacities and in the possibilities that Costa Rica can really bring as a canvas. We believe in Central America. We believe in Latin America.

We believe in really taking this region to the next level and really generating impact from a net positive real estate perspective, from a planetary health perspective and from being able to design better solutions for the livelihood of people, especially in rural areas. And those are three main pillars that really drive us, okay? And so with Creo Capital, what we've done is we also figured that we needed to create product to be able to attract capital that is both impact oriented but that obviously has good returns in their investments.

And that's something that we focused on. We do traditional real estate investing. We've invested in hotel platforms in Mexico.

We've invested in hotels here in Costa Rica. We've invested in real estate development projects as well. One thing that's particular to what we do is that we really, with the first investment, we had to use a Delaware structure to invest in that particular investment in Mexico.

What ended up happening there is that we had a very interesting base of U.S. family offices and U.S. investment vehicles that said, hey, I'm interested. And having a Delaware LLC just makes it a lot easier for me to understand, let's do it. That worked really well.

Then when the second investment came, we started looking at where do we do it? Do we do it locally? Do we do it again in the States?

It's actually quite efficient. So we decided to then do another Delaware LLC, use that as the investment vehicle, which is fairly transparent for Latin American investors as well. And so today we have five different vehicles that are all Delaware LLCs.

So it's been interesting because what used to be 80% Latin American families investing in our deals, not necessarily through CREO, but before, and 20% U.S. or other families is now the other way around. 80%, mainly U.S. family offices coming in because these are investments in countries that they wanna be in under legislation and structures that they feel very comfortable with. And so I think that what we've found is that that combination of having purpose and values at the core of what we're doing, doing it well, very sophisticated, all lawyers in the States, accounts in New York, structures in Delaware, and doing it by the book is the right way of helping create access to product in our markets that really can make a difference.

And that's why I was saying earlier that I'm really thankful for the people that have invested in this market because it's really what changes and moves the needle for us. And so from that perspective, CREO Capital is continuously looking at, what are the opportunities? Where can we really go in with that mid to long-term view, but with the short-term cycle capacity, cash cycle capacity?

So most of our deals are a combination of, I'd say half of them are five, eight-year holds, the other half are three, five-year holds with maximum distribution policy. So basically what that does is it allows you to diversify into different types of real estate, but as these projects start giving returns, we immediately distribute that. And so I think it's something where we're still finding our niche.

We've been, I think, successful over the past couple of years, mainly because of where we were just standing. It's made us look smart just because we were in the right place at the right time. And I think for me in that particular sense, also very important, I found the right partner.

We found the right partner to execute that. So when we started doing this, we coincidentally, Daniel Grew, who is our partner in Creole Capital, he was kind of looking for the next thing. He comes from Cornell, JP Morgan, CPG, very sophisticated, but he was brought up in Santa Teresa.

They have a big property there. So it's an interesting combination of, again, a foreign family coming here. He's completely Guanaco, like I tell him.

He's Guanacasteco. When you see him, you wouldn't think so, but you just 100%. And so it's a great combination of sophistication, rooting, understanding values.

And so that was very important. And I just mentioned that because I think Danny impersonates a lot of what we really want to accomplish with Creole. It's that conscious investing, doing the deals, making money, that's definitely a priority, but doing it in the right way, which I think is part of what Costa Rica's trying as a country to become more and more.

[Richard Bexon]
No, I mean, look, I think it's very smart what you guys are doing. And I think just picking the right deals that align with your guys' values, which are typically the values of this country, because I'm very similar myself. I mean, if there's a project that wants to come down and cut down tons of trees, I'm like, I'm sorry, guys.

Number one, you shouldn't be doing that. And number two is I'm not gonna be a part of that. I mean, we've got kids here, this is their country, just as much as it is ours.

And the beauty of this country, as you mentioned there, is it's people, it's nature, it's natural assets. And that's what is really gonna hold the value for this country over the longterm. So we need to protect that.

Because again, beyond that, that's really what's always gonna be left.

[Christian Roberts]
Yeah. 100%. Costa Rica's gonna be one of the places that people are gonna want to flock to.

And one decision that I think the private tourism sector has maybe consciously or unconsciously taken, but I think it's all oriented towards that, is we don't want to be a 20 million people tourist a year destination. I think this country, I think there's a consensus, and I hope that's also what you feel, but or understand is that there's a consensus that this is a five, maybe 6 million people market, tourism market, and that's it. And let's focus on value, and let's not focus on volume, and let's focus on content, and let's not focus on greenwashing, and let's not focus.

And I think that consciousness comes from, again, eliminating the army back in 48, putting money into education, making people aware of nature, really. And I think that the older generations in tourism were very smart in saying our competitive advantage is not going and fighting the market on beach and sun. It's really, what are our assets?

And our assets are people and nature. And I think the country drank the Kool-Aid, and the multiple generation since have drank the Kool-Aid, and people coming here are drinking Kool-Aid. And I think that's great, because I think that's really what's gonna safeguard this destination going forward.

[Richard Bexon]
Look, I agree, man. I mean, I've read quite a few marketing books in my time, and the idea of guerrilla marketing hunkering down where no one else can attack you, that's really difficult. I mean, if Costa Rica tried, I remember being in those ICT meetings where they were like, look, Mexico is getting, I'm like, guys, you can't compete with Mexico.

It's just a different destination. Differentiate yourself, hunker down, because who can attack Costa Rica in the region? It's just so difficult.

And it owns that. Now it owns wellness. You mentioned the word wellness, and it's Costa Rica.

I mean, 20 years ago, people weren't really mentioning wellness. They kind of, like, it was there, but it really wasn't there. Adventure, yeah.

I mean, okay, maybe we don't own beaches, but we still have beautiful beaches. There are much, but we have rainforest full of wildlife hitting beaches.

[Christian Roberts]
You know what's one thing that I've recurrently seen and experienced and feel is that Costa Rica has become this destination that the world has realized is a place where they can come to heal as individuals, as families, as communities, but it's also a place where they can come to thrive. Because Costa Rica enhances you as a human. This is a place where you're in touch with nature.

You check the boxes on, you're gonna come to the country and you're gonna get out of here at being a better human being just because you were here. I'll guarantee that, because there's biological scientific reasons why that happens in this country. And so I think that that's also something that's very, very, very strong in our offering going forward.

And I agree with you. I mean, I think the country is very well positioned in that sense. And the great thing, and going back to a campaign that you're very familiar with, there's no artificial ingredients.

That's the great thing.

[Richard Bexon]
We should have always kept that, man. I love that. Or we should have just gone with like 100% organic or something that like, we should have stuck with that because I just thought it was great.

I mean, no artificial ingredients, the timing was perfect for, and that's what Costa Rica is. No artificial ingredients. It's just raw and authentic and real.

[Christian Roberts]
Yeah, yeah, 100%. But I do think the new strategy on essential is also true. I mean, going back to healing and thriving, okay, this is an essential place of the world where you need to come if you just wanna be better.

This is a cool place to be. And I'm so happy that I was born here.

[Richard Bexon]
Yeah, I mean, I'm happy that now I've been, well, nearly most of my adult life here, my kids were born here of like, and you don't really understand what you have until you leave. Like when you leave the country for a while, then you're like, oh, wow, now I really understand. And that's why it's always good to leave this country every so often throughout the year, just to appreciate that.

But well, yeah, we chatted earlier about, you've mentioned there's some kind of up and coming destinations. I mean, a lot of people listening to the podcast are looking to invest in Costa Rica. It could be buying real estate, it could just be land banking, it could be investing in a business.

But I mean, where do you think, with a bit of a five-year outlook here, people should be looking at in this country and why?

[Christian Roberts]
Okay, I mean, I think that's a tough question, which I knew, but I'll give you my best guesses. So I think that, as I was mentioning earlier, everything that's happening in Papagayo and that area is just gonna keep consolidating the country from the high-end market. And it's generating runway for the next five, seven years that I think is gonna be very healthy for the country in general, and especially for the residential market.

Because what happened in Costa Rica from 2008, 2018 is nothing. So when we started in 2019 building, then the pandemic came. So we have this huge amount of people trying to buy product that we didn't build for 12 years, right?

So the demand for product here is huge. There's no inventory. And I think that those projects, they're just gonna keep pushing and pushing the market and sustaining the market.

So I think, I just say that because I think things that you start doing today are gonna run into, I think, a good positive five years, maybe seven years with what's done today. And hopefully, there's things that screw things up, but hopefully nothing of that happens. Having said that, I think that the areas that to me are consolidating more and more, just because I'm seeing a lot more traffic towards them.

People are spending a lot more time. I think La Fortuna, and the Arenal area, that's an area that will definitely be, in my opinion, the next Nosara of Costa Rica. And- A bud in Indonesia.

[Richard Bexon]
It reminds me of a bud in Indonesia.

[Christian Roberts]
100%, and the thing is very simple. I mean, people come, they'll come to Papagayo. Papagayo will continue to be a solid market.

I mean, there's that one, just easy to see how it'll continue to be very successful. I think there's projects coming online that are gonna really strengthen a little bit below those ultra high net worth and high net worth markets that are gonna strengthen the offering and the community there. But what's happening is that Costa Rica really focused a lot more on the beach than on the mountains.

And so as tourists start coming and coming and coming back, and like I said, 30% come back every year, they're saying, yeah, the beaches are really cool, but I'm trying to get a little bit more of that mountain experience, and maybe I want to spend more time there. And it's different. It's a different offering, right?

And so I think La Fortuna complements a lot of what you have in Guanacosta really well. So I think that area is definitely gonna be a solid, solid market for the next five, seven years, and then probably will continue to do so. It has a lot of offering already, and I think it's just gonna continue to strengthen.

The other areas that I think are gonna make a lot of sense are the northern volcanic areas. Those that are within an hour of Liberia, that experience, that volcanic experience, that more, again, mountain, more hacienda type of experience in Costa Rica, we really don't have that. And I think that all of that area of the Guanacaste Dry Forest Conservation Fund, Area Conservacion Guanacaste, they're really unique.

They're phenomenal in biodiversity and just the general experiences. And then you have all these little cute towns. And I think that's a destination, again, proximity to the airport, proximity to the papagayos and the different big markets.

That'll make sense. I think closing the gap between Santa Teresa and Nosara and Tamarindo, you'll have places like Marbella, for example, to just name one. I think that's a very interesting location.

I mean, you'll have different coasts, different beaches. It's very beautiful as a small town. It's really close to Hacienda Pinilla.

It's also really close to Nosara. So those places that kind of fill that gap between some of the destinations that have now matured and I think are at a more mature level. And maybe for some people, they're looking for something greener, for something more in its initial stages.

Those are destinations that really have a lot to offer. I think the areas around Camaronal, Punta Islita, where you now have a lot more offerings, services, things like that, proximity to Carrillo, Samara, those areas that give you content, give you services. Key things there, again, fiber optic, internet, schools.

Those are the things that I would really look for. Where are the schools really coming up? And if not, how can I bring them to these locations?

Those are gonna be big, big drivers. And then so I think Guanacaste, definitely that area in between the bigger markets, but I do think out of those, the Punta Islita area and the, how did I say earlier? Marbella.

Marbella area are really some of the ones that will probably captivate a lot of growth. And then if you go a little bit more inland or to the Central Pacific, I think what you're seeing more and more Dominical, that area is gonna continue to do well. I think probably what needs to happen in Dominical is more hospitality.

You have a lot of Resi, it's a great Resi market, but there's really not that much offering from a hospitality perspective. So I think that that could be a differentiating factor there that could be interesting. And I think some of the more boutiquey brands are looking at that location.

And I think hopefully some of that really consolidates and I think will be a driver. And then I think, you'll have very unique opportunities, hopefully executed by the right people in some of the more valuable biodiversity areas of our country. Thank you also.

[Christian Roberts]
Like, yeah, I would hate to say it also because I would love for nobody to go to OSA. But at least, you know, my request would be, there's a ton of opportunity there, but really think through how you're going to improve the biodiversity of that area and how are you going to be a good steward of that area before you do anything, because I will guarantee you if you don't take that into consideration, you're going to lose money. You're going to build something that is going to be outdated and that it's going to run out of runway very quickly because you would be screwing the value of that particular location.

So I think that those areas are, you know, phenomenal, the experiences, the interaction, you know, it's just really, really, really, really impressive. I think that, you know, those are those areas that make a lot of sense. And then the other area that I think should, you know, start developing more and more is more towards the Poas volcano.

You know, more of the mountain offering closer to San Jose. I think that is something that people have, you know, shied away from historically. But I think that as people are more and more in the country, they come to San Jose, they come to some of these experiences.

You know, the Boas volcano historically has been the number one tourist destination in the country or a daily tourist destination in the country. These are amazing places that are still untouched. Right.

And, you know, I think that that experience that can give you the combination of mountain rivers, waterfalls, volcanoes, plus San Jose itself, you know, I think there's something to be discovered here. And I think that that combination is probably the right way of exploring San Jose.

[Richard Bexon]
Well, there's some great areas there, Cristian. I mean, like, yeah, I mean, look, I'd love to in five years get back on the podcast and see what happened in those areas with you. But I agree.

Look, I agree with all of them. Like, you know, I mean, they continue to do well. The infrastructure is great in the areas, as you mentioned, their schooling is starting to come.

Great restaurants, you know, hotels are starting to develop in those areas, you know, in more of a boutique style fashion rather than larger ones. But sometimes it needs that linchpin, larger property, you know, that really pulls in and markets that area as well. Because it's not easy to create a market, you know, in a good location.

[Christian Roberts]
Yeah, I mean, and again, I think it was very general, you know, general. But the real thing is, if you look at Costa Rica, think of the customer journey. You know, people are coming 13.7 days on average. We're the second longest stay in the world after New Zealand. And people are visiting, on average, three locations. OK, so what's the customer journey?

Where are they going? You know, in three beaches. They're not doing three beaches.

And they're not doing three, you know, exactly, you know, similar offerings, even if they're in different locations. So they want to have the interaction with the people. They want to have the interaction with the mountain, with the animals, with the beach, with what.

So there's just a lot of things around there. There's also opportunity in building, you know, more permanent communities in a lot of these areas. Intentional communities.

I think there's a big, big opportunity there. And obviously, you know, that's something you're one of the renowned experts on. You know, all of the short term rental and midterm rental market is huge and growing.

So other than geographies, there's also product types and asset types that, you know, there's just big opportunities there. And professionalizing things that have grown organically into much better run businesses. You know, I think there's great opportunity around projects or places like Las Catalinas, you know, and places like that.

You have Zapotadas creating a ton of value. You have, you know, Las Catalinas consolidating a very beautiful community, you know, great experience, very unique, very different. So there's I think Costa Rica just, you know, sorry for the broad answer, but there's just so many opportunities I see.

And I see, again, going back to this is a very, very incipient market that, you know, when you look forward, there's so much to do. I mean, you just have to be smart about it.

[Richard Bexon]
Look at what your dad got here to where it is today. I mean, when you're when we're your father's age, we'll look back. We'll go, wow, I can't believe it got here.

But yeah, it's going to be it's going to it's going to be it's going to be beautiful because, you know, I don't think Costa Rica will let it be done any other way. The people won't let it be done. And I don't think the government will let it be done either any other way.

So, well, Christian, I don't think I'm for you.

[Christian Roberts]
I don't think the market. Yeah, no, I don't think I don't think the market wants to.

[Richard Bexon]
Yeah, I agree. I agree. Well, my last question for you is I've kept you long enough.

This has been great. If you inherited five hundred thousand dollars, Christian, and had to invest it into a business or real estate in Costa Rica, what would you invest it in and why?

[Christian Roberts]
Yeah, after giving 20 answers to where do I see a good investment opportunity? That's a that's a that's a tough one.

[Richard Bexon]
Go ahead. Somebody asked me that question the other day. You know, I was it was actually a client was like, well, Rich, you always ask people, what would you do?

And I was like, you know what I would do? I would go to areas like Santa Teresa, like these high demand areas where there are no long term rentals, where locals and staff need accommodations. And I would build affordable homes like tiny style, like tiny, not tiny homes, but like comfortable homes that are prefab orientated homes where you can just wheel them in, put them on the land, put a pool that like managers could move in with families.

People could move it and just regular people could just move in.

[Christian Roberts]
You know, yeah, 100 percent. So that's a that's a good answer. And actually, I think that's one of the big opportunities.

And really, again, when you do that gap analysis and and, you know, in any market or community, you can't just do using an urban example. You can't just build houses. You need to build residential.

You need to build commercial. You need to build infrastructure, schools, whatever. So I think there's a huge gap in many of these markets and in products like that.

And the displacement that has been generated in some of these locations and things like that, I think, needs to be solved. And there's a big opportunity there, definitely. One of the areas, you know, for me, that really makes a lot of sense is trying to build communities that set the example.

So if I had five hundred thousand dollars to invest. And this is probably contrary to what I do, but I would probably invest it in land, in the secondary markets around some of these broader markets. The reason is that I do think that from a macro perspective, given the, you know, the hit that currencies globally have been taking, given where interests are, given where inflation is, given there's going to be a rush back to real estate, a rush back to gold, a rush back to a lot of this stuff.

Today, when investors in Latin America say, hey, I'm geopolitically a little bit scared of some of my countries in the South, I want to go to the U.S. Oh, well, maybe I don't want to touch that. Let's see what happens with that almost two trillion dollars of debt and what's going to happen there. So I'm going to look at Europe and then, oh, hey, there's a war here and then there's a war there.

So I think people today and will probably continue to be that way over the next couple of years are probably going to start looking at real estate more and more as a valuable portfolio component. And that's probably going to grow. So for me, just having the capacity to buy something cheap in a secondary market to one of those more consolidated markets will allow me to have the time to have, you know, an appraisal of that, you know, an uplift in the value of that land, just because I think naturally it's going to happen around an ecosystem like Nosara or even Papagayo or any of those areas.

It's going to allow me to ride that wave where real estate as an asset class is going to also have a premium and allow me to understand where things are going to fall a little bit better, because I do think that there's a lot of opportunity, but there's also timing for that opportunity. So I'm, I'm, I'm very, we're very slow, actually. So at Creo Capital, we normally do one investment a year, maybe two, and that's it, because we're very slow at making up our mind and going through the process and understanding that.

So, you know, I'm not one normally to take half a million dollars and just shove it into a project because I think there's an immediate opportunity. I look for those opportunities where I think value is going to be created organically, and that gives me time to ride that up, but also then, you know, be able to really be spot on where to add value. So, yeah, probably not the answer I would, I would, I would have thought of until I, I, yeah.

[Richard Bexon]
That's why I love to ask. I love to ask it just because sometimes just the variety of different answers we get is great. And there's a lot of people out there looking to, you know, a lot of people, you know, I've spoke to clients just before this who were like, look, Rich, we're, you know, nearly, you know, 100% invested into stocks, into the stock market in the US.

And we, you know, we want to diversify a little bit out of that and out of the country a little bit. And I'm seeing more and more of that and having more and more of those conversations, you know, and there's a lot of that to diversify it. So, so, yeah, well, Christian, there's a lot of that.

Yeah, I just, again, we've, I think we've taken up this, this is this, you have done the longest podcast, which is great. But it's been amazing getting all this information out there, because I know that people, you know, are always looking for this, not, no, no, no, don't apologize. This is, this is great.

You know, I think it's, it's a very unique perspective that come, you know, you, you speak to a lot of people, you know, you're a lot of conventions. So it's just these viewpoints kind of coming all together. I think it's just, you know, it's a very informative viewpoint that you have.

So I just want to say thank you very much for coming on the podcast. It's been great. And I'd love to get you on again at some point in the future.

[Christian Roberts]
Well, coming from you, again, I'm very honored and humbled by your words. Again, I think what you're doing through this podcast is really powerful, helping people come and make a difference and be successful in making a difference in Costa Rica. Then going out and doing it yourself as well.

I'm very thankful for you and for what you've been doing for the country for many years now. And again, this podcast is another example of that. So I really want to take this opportunity to thank you for taking the time, putting the hours, putting this together, bringing the people and just sharing the knowledge.

I mean, I think that's, that's really, really, really, really important. So thank you.

[Richard Bexon]
No, thank you, buddy. Thank you. So, well, awesome.

We'll speak to you soon. Good to see you.

[Christian Roberts]
That's it, you too, bye.

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Investing in Costa Rica with data, real estate, and investing expert Christian Roberts from CREO Capital.

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