Overcoming A Troubled Past
“I get my information on the Internet, and it is available to you as well, and I am sure you are aware of it. In researching Medellin, I found stats relating to murder rates among the highest in Central/South America, which would be a concern for anyone considering Colombia unless they had been living in a cave…”
Poor Medellin. Will she ever be able to escape her troubled past?
For decades, this city was a drug-cartel capital. Pablo Escobar, the billionaire godfather of the Medellin drug trade, and his drug goons reigned over Medellin, terrifying this good city’s other citizens.
But that’s all history.
Yes, the drug and gang culture exists here still, but Pablo Escobar is dead, shot and killed in 1993 by Colombian security forces. Colombia has made dealing with its drug-related problems a priority ever since and seems to be having much greater success curtailing the associated violence than other countries (including Mexico, for example). A piece this month from a reporter for the Los Angeles Times gives some good perspective on this.
Nevertheless, many outside the country believe Escobar’s reign of terror continues, even minus Escobar.
Lief and I are back in Medellin this week, our 9th or 10th visit of the past two years, and we’re struck again by the stark contrast between the idea of this city that the world, especially the average American, carries…and the reality on the ground.
The reality on the ground? Businesspeople dressed smartly coming and going from their offices…women shopping, running errands…children riding bicycles and roller blading in the parks…couples wandering from restaurant to bar to nightclub…
The reality is that Medellin is a peaceful, tranquil, welcoming place.
Lief takes up this issue directly in the feature article for his inaugural Simon Letter issue. As he explains:
“The murder rate in Medellin continues to be high on a global scale, but you need to remember that, as in most cities around the world, the violence and killing is gang-on-gang. Those in the drug industry are mostly killing each other. Innocent bystanders do end up getting hurt or killed as well sometimes, but the real trouble areas are contained.
“Nobody can guarantee that the drug gangs will never again have the power and the reach that they once had in this city, back in the days of Pablo Escobar. However, I can tell you that the people of Medellin have no interest in losing control of their city again. Paisas, as they are called, take enormous pride in their beautiful city. They speak openly of the troubles they’ve lived through and want very much both to keep any lingering problems in check and to change the way the world views Medellin.
“Most of the world has no idea of all this, though. Thanks to their long-standing reputations as danger spots, Colombia in general and Medellin in particular have been off the world’s radar as retirement or investment destinations. This has left the local real estate market to the locals. The result is that property prices are a tremendous value on a global scale. You can find livable older properties in excellent neighborhoods for less than US$1,000 a square meter. New properties are more expensive, currently selling for as much as US$2,000 a square meter, but, even at that valuation, they are more than reasonably priced for the quality both of the construction and of the city where they’re located. Compare Medellin pricing to US$2,500 and up for comparable apartments in comparable neighborhoods in Buenos Aires, for example.
“As the stigma of the drug wars diminishes and more people visit Medellin to see the city for themselves, as more international businesses relocate to Medellin and as retirees discover all this city has to offer, real estate prices will likely pop…”
Prices are up already about 15%, on average, from where they stood when we began drawing your attention to this city. The current average price to buy in Medellin is US$1,300 to US$1,400 per square meter, up from the average of even eight months ago but still a bargain on a global value scale…and current rental yield projections remain in the double digits.
This is the starting point for the discussions we’ll be having with the 75 attendees joining us in this lovely City of Flowers starting tomorrow for our first-ever Live and Invest in Colombia Conference.
If you aren’t able to join us in person, don’t worry. We’ll be getting it all on tape and will make the conference recordings available at a specially discounted pre-release price starting Thursday.