Scenarios

Emerging Terrains seeks to provide a balanced and well diversified portfolio of properties within its operating markets.

As a company focused on raw land, the way we have sought this balance is through transactions across various sectors, geographic locations, and property types.

Phase of Market Cycle

Geographical areas of emerging markets experience contrasting stages of development from one sub-market to the next.

Sometimes this is a result of infrastructure growth. As new roads, airports, and utilities arrive, so do those interested in purchasing property. We have noticed that in each market cycle there are optimum times for acquisition. This creates both a window for acquisition and an opportunity to pay too much for property.

Sometimes this is a result of international attention. In an undeveloped area, a well executed market can create dramatic price fluctuations. For example, the sleepy mountain town of Boquete, Panama was relatively unknown a few years ago. When the spotlight of International Living and AARP combined with the self promotion of the Valle Escondido development, property values in Boquete skyrocketed.

Prudent investment in these markets requires a careful analysis of the market cycle to determine the timing and type of acquisitions.

End Use

Assessing property based on end use offers the chance for further diversity and successful emerging market real estate investing. Quite often yesterday’s great investment is today’s loser. There are many reasons for this, not least of which is the herd mentality of emerging market investing.

For example, not long ago investment in the Panama City condo market was considered to be one of the most attractive investments available. Condos were selling (and pre-selling) for prices per meter that were quite attractive from a regional perspective.

It didn’t take long for those prices to rise to levels that were simply irrational. What went unnoticed during this period was that very little investment was being made in the hotel sector. Trying to get a room to go visit the overpriced condos was quite aggravating.

Those investors who varied their investment based on end use have done quite well. We seek to remain aware of activity in the various sectors in the markets with which we are involved so that we are able to diversify our investments and capitalize on investments that go unnoticed by those with a single sector focus.

Type of Title

In countries that derive their legal framework from the Napoleonic Civil Code (which is all of Latin America), what is referred to as “Rights of Possession” or “ROP” abound.

ROP is a form of holding property whereby the owner has rights to the property but legal title is retained by the government. Latin American countries in general (Panama more specifically) are attempting to issue title to their land.

Significant opportunity is available to those who are able to effectively manage the process of obtaining title to ROP property.

Varying title type within our chosen markets allows us to further diversify our holdings.