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Garbett Enters Mexico City Market

Garbett Homes is building single family homes in Queretaro

June 26th, 2008

Garbett Homes is pleased to announce its entry into the Mexican residential market. Mexico is the tenth largest economy in the world and the largest in Latin America. Banks have recently expressed an interest in mortgage lending, and have targeted this market as a key growth sector. New legislature in Mexico has allowed private investment groups to form lending companies and compete with banks in the mortgage industry. This has stimulated the housing market. Banks will typically require 20 to 30 percent down with an interest rate of 12 percent on a 20 year loan. The paperwork and approval process can take up to 30 days. Private mortgage companies are offering 5 percent down (95 percent loans) for 30 years very competitive interest rates. Their approval process and complete paperwork takes about 5 days. Builders are using preferred private mortgage lenders as marketing tools to stimulate interest. This added competition is revolutionizing the mortgage industry and further supporting the housing boom. All closing costs and broker commissions are paid by the lender and does not effect the sales price of the home.

Querétaro has one of the most dynamic economies amongst Mexican States. The growth of its GDP has exceeded the national average for years, accounting for an increase of 5.5% in 2005, 6.1% in 2004 and 4.1% in 2003, according to the Agenda Económica published by the State Government. The average growth during the 1993 - 2004 period was 5.1%, ranking second best in Mexico. Manufacturing accounts for one third of the GDP, followed by commerce and hospitality (20%), non financial services (15%), transportation and communications (13%), and financial services (10%). Agriculture accounts for 4% of the State's GDP. The main industrial sectors are automobile related, processed foods, home appliances, electronics, paper, and poultry. Education (30-40% of higher education students come from other states and countries) and tourism (the state is considered the second largest non-beach-resort destination in the country) also play an important role.

Garbett Homes is building contemporary single-family homes in Querétaro's trendy Juriquilla district, about two hours north of Mexico City. Our primary target buyer is a middle class Mexican couple with one or two young children. The area where we are building (Juriquilla) is experiencing a housing boom. Our competition is absorbing similar product at an average of 4 to 5 homes per month. We are priced aggressively for our product offering at $280,000 to $300,000.

The largest builder in the area (FamiCasa) joined with Pulte Homes Mexico and formed Altta Homes. This new entity is now the leading developer in our area. Atlas Homes is one of the largest developers in Northern Mexico and has a strong presence in the area. Urbi Homes is the largest builder in the country and is also developing in our area. Hines is also developing here. Hines is a privately owned, international real estate firm based in Houston Texas. In Queretaro they are building 200 stacked flats. The market is strong and developers are not sitting on unsold product.