By Forbes

David Sutton isn’t going to wait for Cristina Kirchner to leave her pretty pink mansion in Buenos Aires. Despite an economic downturn, the Alvear Group’s CEO has been busy building up the new Puerto Madero section of the capital city more than any other developer. Sutton’s company – heavily invested in real estate and tourism — has been limping along thanks to president Kirchner’s restrictive dollar policies, but moving forward nonetheless. They bought a $40 million piece of land inside the new port district in 2010. Then the dollar market shut down. And then he rifled through another $130 million of the company’s own capital to build Alvear Tower, currently the tallest residential building project in South America with 54 floors towering 235 meters (770 feet) above the River Plate. It was supposed to be move-in ready by December 2015. It won’t be. We can blame politics for that.

Import delays caused by government restrictions means the tower won’t be done until June 2018. Doing business in Kirchner’s Argentina is not easy. Unlike Sutton, most real estate investors are waiting for her to go.

“There’s no recovery just yet,” says Damian Benavoli, a consultant with CBRE, a multinational real estate services firm with offices in Buenos Aires . “We think the market will remain stable until the elections in October. After that we are expecting a recovery.”

The market has sung Argentina’s swan song for the last two years. They had good reason. Kirchner has been commandeering a train wreck for the past eight. In one sector, real estate, South America was on a tear. The Paris of the South was burning by comparison, at least metaphorically. In 2011, Kirchner pulled out all the stops while investors pulled out their hair. Call it Act III in the Kirchner drama, el Presidenta put a limit on dollar transactions, making importing next to impossible. Foreign investors, especially Yankees with dollars, were not welcome by the Kirchner government.

Here’s the good news: Argentina has hit bottom and is now on pause. It doesn’t get worse from here. One of the key places Argentinians and foreigners are looking to invest now is real estate.

“There are several institutional investors analyzing diverse types of investments in different industries. The sector of most interest is real estate,” says Frederico Tomasevich, CEO of Puente, a $15 billion asset manager and Argentina’s biggest.

Inquiries have come from New York, London, China and Soros Fund Management.

In 2013, while real estate prices and deals were soaring in Rio, Santiago and even Bogotá, Buenos Aires sales prices declined for the first time since 2005. The biggest issue was the fact locals were hard pressed to get the dollars needed to buy homes. On the residential side, home shoppers pay cash and real estate priced in dollars is an inflation hedge. On the commercial side, there’s less building now than in 2007. For a city the size and stature of Buenos Aires, there’s currently around five projects in the works and two of them are Sutton’s.

Got Dollars? Argentine Real Estate is a Buy

For investors with strong dollar bills bulging through their wallets, there’s some good shopping to be had in Argentina. Commercial real estate prices are stable, but residential prices decreased 2,5% in Buenos Aires over the last year. CBRE says prices in other states have fallen even lower. This is discount shopping time in a country that has plenty of caché and potential.

Sutton told FORBES the real estate market is coming back to life. This is more hope than reality at the moment. The Group’s Alvear Tower is just 49% sold. Unsold units have risen pretty much with inflation, around 30% higher than their asking price back in 2011.

“Argentina’s future economic outlook is promising,” Sutton says. “Independent of the two undertakings we have in Puerto Madero, we are convinced this is an excellent time to invest in real estate in this country. Relative values of quality properties will see a significant appreciation in the next few years.”

The company is currently topping out the Alvear Icon in Puerto Madero, a hotel and luxury residence. Puerto Madero is where the more exciting real estate opportunities are in Buenos Aires. Downtown is seeing some revitalization as well with city funding trying to entice real estate developers and small business owners to build in the old financial district. It’s a slow process, but it is clear that work is ongoing as a number of old buildings are being gutted and restored.

Foreign investors will take their cue from deep pocket locals.

New York-based developer YoungWoo has a 2,000 acre real estate project in Mendoza called the... (Read More)