A source at Sunterra says the company acquired the management contract for the existing units as well as the excess land for development. Existing on-site amenities include pools with swim-up bars, whirlpool spas, tennis courts, a poolside bar and grill, and two beaches.

Without revealing the number of units it is planning, Sunterra says the first two phases of development will comprise two thirds of the total number of units, with completion slated for sometime in 2006. The units in the third and final phase will have oceanfront views of Cabo San Lucas and the famous arch at "Lands End."

Newport Beach, CA-based Koll and Greenwich, CT-based Starwood Capital Group recently acquired the 22-acre oceanfront Hacienda Hotel property in Cabo. The JV's redevelopment plans call for 203 for-sale condominiums and 30 single-family homes.

The project will be developed in four phases. Delivery of the first units is expected in late 2006 or early 2007. The total sell out is estimated at around $400 million.

Koll's acquisition and development manager Bill Larkin told GlobeSt.com in November that the bulk of the units will be in a series of low-rise buildings up to six stories. In addition, there will be 30 single-family beachfront homes. The development will offer direct access to the Cabo San Lucas Marina and include a beach club with full restaurant, infinity pools, spa, workout facilities and lounge for the use of residents.

Larkin says that the design and entitlement processes are under way and demolition of the existing hotel on the property will take place in late December. The size of each of the phases will be determined in January based on the amount of interest shown by prospective buyers.

The land for the development was sold to the JV by the Parr family of Cabo San Lucas. Larkin declined to reveal the purchase price or the expected development cost, citing confidentiality agreements.