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Acapulco, Another Mexican Drug War Casualty

A spike in homicides hits the beach resort’s real estate market
Bodies near Acapulco’s Caleta Beach
Bodies near Acapulco’s Caleta BeachPhotograph by Bernandino Hernandez/AP Photo

Acapulco, once a teeming beach resort city, is now one of the most blood-soaked precincts in Mexico. A spike last year in gangland killings by drug cartels has terrorized residents and curbed tourism. It’s also made it even harder to sell real estate in a city already falling behind rival resort enclaves along the Caribbean.

Few real estate developers feel the pinch as keenly as Sare Holding, Mexico’s fifth-biggest publicly traded builder that got 36 percent of its sales from Acapulco in 2010. The company is selling $1.4 million luxury condominiums in Acapulco and has seen its sales and stock price collapse in recent months. Sare’s revenue in Acapulco dried up completely in the fourth quarter, dragging the city’s full-year 2011 home sales down 54 percent, to 330.2 million pesos ($26 million), according to the company. Sare’s home sales nationwide plunged 90 percent, in part a result of the violence in Acapulco, it says. As of March 13, Sare’s stock was down 14 percent since the company reported earnings on Feb. 27.