Sadly, this is a real problem. Portugal is littered with half-developed properties, abandoned because of financial problems. There is a huge development in Lagos, right on the water, a prime location, that stands half-built and empty, and has done so since probably 2008 - the place literally has multiple signs on it saying “soon - new hotel!” “soon - different new hotel!” - both faded, and these were major brands. There are multiple buildings in Sao Martinho do Porto that stand half-built and have clearly been that way for a while, and these are in locations that are obviously desirable.
When I first looked into all this, I was interested in the real estate path and there were many many developments being offered - but it started to feel like what was happening was that projects were being proposed but no one was able to show how the thing was going to get funded, or when it would get done. It is possible for example that the development in question here is out of cash money and waiting for more investors to contribute capital so that development can resume. This is frankly why if someone is going to do real estate I tend to think Mercan is the best path - simply because their funding model is clear, they can front the money to do the development and accept some of the risk, and they have a proven track record of executing. Too many of these investments… that’s unclear.
I eventually purchased into a development project - not for GV, but because we wanted the apartment. However, I watched it getting built - I was able to see it over the course of a year and thus saw that yes people were working on it continually, it was backed by a major firm doing business across the Silver Coast, and the contract included a “completed-by” with a penalty for non-performance. As it was, they barely made that timeline.
Of course you might call me paranoid. I had lunch with my lawyer and my fund manager, and I make a point of trying to drop in and say hi when I am there - Portugal runs on personal relationships. I eyeballed my property multiple times before investing a dime. For one real estate investment I was considering, I hired a third party assessment firm (Prime Yield) to go physically onsite inspect it before even considering it.
(It was telling to me that, when I did have lunch with my lawyer, she said either she’d never had a client meet her in person before, or I was one of very few, I can’t recall exactly. It was a really nice lunch.)
I would not lean on your lawyer to make such judgments. Certainly not NSM. They explicitly stated at the beginning of my journey with them that investments are not their expertise on the whole and while they offered contacts to potential investments, they passed no judgment on them; they were there to help and advise on the process, not the investment. Which I think is the right answer. I personally have been well served by NSM, and having interviewed and priced out several firms at the beginning of the process, can say that NSM has provided value for money.
