The $33-million first phase of the relationship began this week with the acquisition of 136 acres in Mexico City and the pending acquisition of 71 acres in Acapulco. The Mexico City property will be planned for 3,970 housing units with a sales mix of 80% in the affordable housing segment and the remainder being middle-income homes. The Acapulco property being acquired will be planned for 1,118 housing units, 90% middle-income housing and the remainder higher end.

PREI's head of Latin America Roberto Ordorica says there are several avenues for participating in the Mexican homebuilding industry, but PREI decided the best scenario was to leverage the local expertise of a local homebuilder with PREI's development and global capital markets expertise. The corporate and legal infrastructure created via the joint venture will allow the two companies to consistently develop housing communities throughout Mexico, allowing them to launch subsequent phases according to Geo's expected growth, says Ordorica.

Geo chairman/president Luis Orvananos Lascurain says the joint venture, which took months of negotiations, will provide his company most of its future land needs. "The partnership with Prudential is part of a concerted effort to position Geo as the homebuilder with the highest accessibility to land reserves in Mexico, while achieving, at the same time, the best ratio of Land Bank to Sales in the industry," adds Corporacion Geo VP of Finance Victor Segura Gomez.