Omega Annouces an International Joint Venture Development With BBB Development in Puerto Penasco, Mexico
Omega Commercial Finance Corp. (OTCBB: OCFN), a high/yield commercial real estate finance company that specializes in lending to middle market borrowers, is announcing a joint venture development with BBB Developments. Jon S. Cummings IV, President and CEO, has executed a Joint Venture LOI with Chris Crane of BBB Developments. The project called Los Corrales Condominiums is a 308 unit direct ocean and beach front condominium development located in Puerto Penasco, Mexico just 4 hours south of the Arizona border, in the free trade zone also known as the Gulf of California/Sea of Cortez.
Omega has been engaged for two years to arrange the initial construction and land "take-out" financing for BBB Developments. Despite the lack of interest by Omega in the US condominium market, this opportunity has opened their eyes to the strong international resort destination market, specifically in Puerto Penasco. Lisa-Babbage Jackson, Omega's real estate analyst and board member with over 25 yrs of expertise in the real estate industry, was presented a feasibility report that had a quote from a recently published article by the Wharton School of Business stating, "The real estate boom is under way in Latin America -- with Mexico being the region's biggest winner." This boom is evidenced in part by Marriott Hotels announcing a newly planned development of a 4-diamond/star hotel just minutes away from the Los Corales site and Puerto-Penasco (Rocky Point) announcing the opening in 2009 of international flights from major cities.
Omega presented to Chris Crain the opportunity for a joint venture rather than the traditional financing structure. Omega will be responsible for the $61 million construction costs and receive 45% of the net profit from the sales. This was a "No Brainer" for Omega, considering 108 of the units are pre-sold with hard contracts in place which represent $38 million in sales. BBB Development has been self-funding this operation from their own capital and groups of personal friends and family members. BBB Developments acquired the property from the Godoy family for $11.4 million through seller financing, also increasing the property's market value from $12 million to a recently appraised value of $18 million. Omega estimates generating a two -year annualized IRR of 25% or $39.5 million in net profits. Omega anticipates construction to start once they have their overall high/yield commercial real estate credit facility in place within the next 30 to 90 days. Jon S. Cummings III, the Chairman of Omega, has noted that, "We believe this will benefit our shareholders both over the near and far term while generating attractive returns. In addition, the joint venture is expected to generate significant capital to redeploy into supplementary high/yield commercial real estate financing opportunities."
Safe Harbor Statement: The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-looking statements. Certain of the statements contained herein, which are not historical facts, are forward-looking statements with respect to events, the occurrence of which involve risks and uncertainties. These forward-looking statements may be impacted, either positively or negatively, by various factors. Information concerning potential factors that could affect the Company is detailed from time to time in the Company's reports filed with the Securities and Exchange Commission.
Rocky Point Mexico
Puerto Penasco Mexico