Hacienda Cerritos presents a compelling development opportunity. Hacienda Cerritos sit on over 5 acres of titled, waterfront land with a building that is over 20,000 square feet. The property is located just outside of the urban and touristic growth centre of Los Cabos. Los Cabos finished out 2022 with a never-before-seen 20% growth in visitor numbers. In 2022, Los Cabos welcomed 20.7% more international visitors to its sandy shores than it did in 2019, the last year before the pandemic affected travel. Making 2022 a record year for travel to Cabo.

The extreme growth has been attributed to Cabo’s varied services and attractions, as the area has won awards in various sectors, including for high-quality service, safety, and luxury tourism.  This area constitutes one of the very few beachfront properties still available for new development. A primary vacation destination in Mexico with an extremely competitive international appeal, Los Cabos has an established brand image as a high-end vacation and residential market. In the resort residential segment, the destination has recently drawn much of its buyer demand from European markets complementing the already established US and Canadian markets. With minimal investment, this luxury property has the ability to be the tipping point for the area’s metamorphosis.

Strategically situated on one of the best surf breaks in the Southern Baja, Hacienda Cerritos sits atop a rock formation jutting out into the rhythmic waves of the Pacific Ocean below. The lookout tower, in the center of the property, has 360-degree vistas looking north, south, and seaside, as well as the inland mountains. Adorned with authentic and rustic-wooden Spanish details, the luxury boutique hotel (not currently operating) has been an icon since its inception in 2010.

Hacienda Cerritos is perfectly situated just south of the art and culinary epicenter of Todos Santos and less than 40 miles north of Cabo San Lucas. Its location acts as both an escape from the electric Cabo San Lucas, while also a much-appreciated midway point for adventurers traveling through to Todos Santos, the capital city of La Paz, or up the Baja.

Cerritos is a world-renowned surf spot with a beach break. It is exposed to west swells that can light up for days in super clean conditions. It is a great spot not only for the experienced surfer but also for beginners. Water temperatures vary depending on the time of year but nothing nearly cold enough to keep surfers out of the waves.

The Hacienda Cerritos will be the anchor for future development (aimed at surf tourism and second home ownership) This first location for Pray For Surf Hotels will be the flagship hotel which future locations will be based upon. Pray For Surf Hotels will be the first large scale surf focused hotel brand. With growing market conditions now is the ideal time to enter the market. Owing to the increased health benefits of the action sport globally. 

With the legal team at Coastal IP we were able to trademark the name 

Pray for Surf Hotels ™.

The worldwide surfing tourism market was estimated to be worth 9.5 billion U.S dollars in 2022. This has been predicted to rise to 17.1 billion U.S. dollars by 2032, representing a compound annual growth rate of six percent. This is consistent with the surfing industry itself (boards, wetsuits, etc.), which has also been predicted to grow.

With a record growth of 47.3% in visitation from the U.S. during the first six months of 2022 compared to the same time in 2021, Los Cabos, a world-class destination, welcomes more than 3 million visitors every year arriving through air and cruises. 

Los Cabos tourism is booming as it has grown by 20%, 1.7 times the overall pace of Mexico. Six thousand new rooms hotel rooms were added in the last 7 years but more are needed.

Seven out of ten visitors are repeated guests, and 90% of first-time visitors say they would return. With 350 sunny days a year and within a 3 hour flight away from 24 major US cities. Los Cabos continues to sustain an impressive wave of growth to cement its position as the crown jewel of all destinations in Mexico.

The results of the 2020 Census indicate that Los Cabos is home to more than 350,000 residents and this number is expected to double by 2050. 

The goal is to buy the existing Hacienda Cerritos. A 20,000 square foot building built in 2010  then upgrading it to 30,000 square foot 44 room Hotel and Surf School. We will also create a world-class beach food and beverage operation to service not only Hacienda guests but guests from surrounding resorts as well. 

Purchase price of the building plus 5 acres of waterfront land $11,500,000

Renovation and expansion of the property $6,000,000

Total investment in the Hotel Operation $17,500,000

Average room rate of $540 x 72 % occupancy (255 days) x 44 units = $6,244,128

Gross profit Margin 20.8 % = $1,298,778

Food and Beverage gross revenue = $2,628,000

Gross Profit 28 % = $735,840

(Seeking knowledge from local hotels has guided  us to believe that we will have a 28% margin on all F/B items )  

Surf School Approximate profit = $150,000

Merchandise profit = $90,000

Surfboard, beach chair and vehicle rentals = $ 75,000

Total  Yearly Hotel  Profit  $2,348,840

(Future revenue from the Residence) $864,000 

There are multiple pieces of beachfront real estate for sale in Cerritos. The adjoining piece to the hotel is for sale, the above image is a live listing currently on the MLS. (It's worth noting the Hacienda is not currently listed for sale. This opportunity has been brought to light through our network of local sources) The listed piece of land is a crucial acquisition but there are other large pieces that would make a strong business case to purchase. Re-opening the Hacienda will change this small surf town making all these parcels more valuable.  It's also important to articulate how few swimmable beaches there are on the Baja. Playa Cerritos is the safest and most under-utilized beach on the entire Baja peninsula.

The details of this  development are to be determined but will prove to be a profitable investment.  The current concept (after purchase of the land) would be to build a residence building. This is a building that will have larger apartment's to be sold on the open market. It will be branded as the Pray For Surf Residences. With bylaw on the units that will require all rentals will have to be managed through the Hotel.

To quickly understand the investment here is the back of napkin calculation. 

(There is no time table for this construction expense)

                                                          Land          $7,500,000 

                                              Construction     $15,000,000

                                                      (65,000  sq. ft building) 

                                        Real Estate Profit   $13,000,000 (revenue of $35,500,000)

            Yearly Property Management  Revenue $864,000  (To be added to Hotel operations)

1    Ownership of a prime waterfront hotel in a thriving vacation market. Named, Pray For Surf Hotel Cerritos.

2    The development and sale of a Real Estate project in one of the most sought-after second home markets on the planet.  Named, Pray For Surf Cerritos Residences.

3    Ownership of a Hotel Brand that will be a leader in Lifestyle Hospitality. Named, Pray For Surf Hotels ™. This brand will generate revenue from the Hotel Cerritos. It will also be the sole property manager for Cerritos Residences. The property management co. Will earn 40 % of revenue created from rentals for owners of the individually titled condo/hotel units. There will be a furniture and decor standard for the properties to be in the rental pool.

The investment starts in Mexico but can go Global. We have the opportunity to leverage the brand through the quality of the Cerritos project for worldwide Surf Hotel and Surf Residence opportunities.