Affluent Fractional Buyers: Time As Precious As Gold

Once upon a time, there was a successful real estate investor named Charles who would have balked at the idea of sharing his vacation house with 12 other millionaires.

Fast forward to 2010. The conspicuous consumption of the mid 2000s has turned into conscientious consumption; and whole ownership for the affluent has taken a backseat to experience. Charles doesn’t want to tie up all of his financial assets in a multi-million dollar summer vacation house that his family is realistically only going to use 4-6 weeks out of the year. Ultimately, he wants more time with his family and enjoy the memorable experiences that are made possible by the fruits of his labor. He still wants the most desirable vacation home money can buy without the headaches and stresses of absentee home-ownership. Yet, he wants to be smart with his money, only buying what he will use.

Charles may be a fictional character, but his story illustrates the mindset of many affluent travelers. They still value their leisure time—just as much as (if not more than) their money, according to a 2009 report called “The Affluent Shared Ownership Buyer: A Market Profile.”

Shared ownership, or fractional ownership, in private residence clubs such as The Èlan Collection, remains a “smart” vacation option. If Charles were to buy a $1.25 million share in an oceanfront property in La Jolla, for example, he would get four weeks guaranteed use, amenities and services ranging from a luxury vehicle to private Èlan concierge, the option to exchange his use rights for flex time at another Èlan property, and the peace of mind of knowing that The Élan Collection takes care of all of the details associated with typical home ownership (and is dedicated creating memorable vacations).

Have you encountered a Charles while selling whole ownership vacation properties? Do you agree that time and experience are just as precious as gold in today’s vacation home market?

Elan’s Best Places for Vacation Homes

When Steven Sears of The Wall Street Journal declared last week that “the market for luxury real estate is coming back to life,” it was hard for those of us in the high-end real estate industry not to take notice. Could the summer buying season be starting early this year? Is the luxury real estate market truly warming up?

Says Stan Tonkin, Vice President of International Marketing and Sales for The Èlan Collection: “Our residence specialists continue to find that interest is heating up among their affluent clientele. We think it’s going to be a great summer to buy a vacation home, especially one that costs a fraction of the price and comes with a list of world-class amenities attached.”

In honor of luxury real estate’s leisurely return, Sears took note of Barron’s “10 Best Places for Second Homes,” which included lush locales like Maui and Palm Beach, as well as The Hamptons, Aspen and Pebble Beach—which are three (current and upcoming) Èlan destinations.

1. The Hamptons—Few locales in the world possess the cachet of The Hamptons, long favored as a summer retreat for high-powered New Yorkers. No. 3 on the Barron’s list, The Hamptons is known for grand Colonial estates and beaches bordered by farms, vineyards and meadows. Should it be a surprise that The Èlan Collection will soon be adding a property here to their private residence club?

2. Aspen—Four major ski hills, the Tom Fazio-designed Maroon Creek Club, posh shopping and an emerging cultural center… Aspen truly has it all. Occupying the fifth position on Barron’s list, Aspen is an ideal year-round vacation spot—which is exactly why The Èlan Collection has plans to soon offer a residence here.

3. Pebble Beach— The Èlan Collection recently added a stunning view-oriented, one-acre Mediterranean estate on legendary 17 Mile Drive to its portfolio—and for good reason. No. 6 on Barron’s list, Pebble Beach is a golfer’s paradise. The Pebble Beach Golf Course hosted four U.S. opens and The Links are rated the No. 1 public course in America by Golf Digest, while legendary spas, shopping and restaurants are all within close distance.

What do you think about the vacation home opportunities in The Hamptons, Aspen and Pebble Beach? Any cities that didn’t make the list, but should have?

Market Sharing with Vail's Liz Leeds: PART 2

EDITOR'S NOTE: This is the second part of our "Market Sharing" Q&A series with Liz Leeds, a 17-year Vail Valley native, 25-year of sales and marketing veteran and one of the area's top fractional real estate experts.

TER: What are your affluent clients’ top wants and needs?

LL: Ease of use is their number one desire. They want to be able to come to their vacation property and have all of the services at their fingertips. They also want to be able to travel quickly to their home, so that they can board a flight in the early morning and be on the slopes by noon! A premier location also sits right at the top of their list of wants.

TER: For the first time in 2009, luxury fractionals in Pitkin County, Colorado actually surpassed high-end luxury home sales by a 20 percent margin. Are you encouraged by this report?

LL: There is no doubt that fractionals makes great sense for the buyer who can only visit an area a few times a year. It does not tie up so much financially for them. I see the fractional market only continuing to grow in and around the U.S. The Pitkin County numbers do not surprise me, but I am encouraged that more and more people are thinking along these lines when it comes to owning vacation properties.

TER: Where do you see the luxury market in Vail heading in the next 2 years?

LL: We are already seeing an increase in sales in the Vail luxury market. For example, in January of 2010, we have doubled our luxury sales from January 2009 to January 2010. Properties across Vail in the $7 million to $12 million range have sold during the last few months as well. I am not sure Vail will ever see the inflated prices we had a few years ago, but I see the luxury marketing improving year after year by quite a bit.

TER: Are you optimistic about the luxury shared ownership opportunities in Vail?

LL: Yes, the numbers are showing us that there will always be a

market for shared ownership here in Vail.

TER: Tell us a little bit about The Èlan Collection’s shared ownership opportunity at The Arrabelle.

LL: The Arrabelle at Vail Square is nestled at the base of the Vail ski resort and just footsteps from the Eagle Bahn gondola. The Arrabelle itself was inspired by the classic grand alpine hotels of Europe. The Arrabelle offers a variety of services and amenities such as valet parking, ski and boot storage, a beautiful spa and health club, outdoor ice skating rinks, all surrounded by shops and restaurants. Everything is at your fingertips at The Arrabelle. It’s truly a great fractional ownership opportunity starting at $950,000 per share.

Market Sharing with Liz Leeds, Elan Residence Specialist in Vail: PART 1

EDITOR'S NOTE: Due to the length, we have decided to break up our Market Sharing Q&A into two parts.

Liz Leeds, a 17-year Vail Valley native with 25 years of sales and marketing experience, is one of Vail's reigning fractional real estate experts. She has sold hundreds of fractionals during her real estate career, led educational broker seminars and written articles about fractional real estate for Vail Daily. As The Èlan Collection's very first Residence Specialist chosen for our monthly ”Market Sharing” Q&A series, she shares her insights on the Vail luxury vacation market, the art of selling luxury vacation homes in one of the country’s most popular ski destinations, and what the future holds for the local fractional market.

The Èlan Report: What makes Vail a unique vacation home destination in your mind?

Liz Leeds: Vail has always competed with Whistler, British Columbia for the number one ski resort spot in North America. Vail has so much to offer in both the winter and summer. The ski mountain has fabulous terrain for all levels of skiers and snowboarders. The back bowls are world renowned coupled with all of the other activities that are available on the ski mountain such as snowshoeing, tubing at Adv

enture Ridge, snowmobiling and more. Then when you add in potential summer activities in Vail such as hiking, biking kayaking, golfing and all of the performing arts—there is not much you cannot do here in Vail when vacationing.

TER: What ultimately sells your clients on Vail?

LL: The fact that Vail is very easy to get to from Denver International Airport—one can make the drive in two hours. The Eagle County Airport also serves many airlines from around the country for those who fly commercially or privately. The fact that the ski mountain is number one in the country makes it very appealing for families who want to build lifetime memories here in Vail.

TER: Where do your luxury vacation clients generally come from?

LL: I have several clients from South America and London. They can find good values in the U.S. now, especially in Vail. Domestically, many of my clients come from Texas, New York and the Midwestern states such as Kansas and Minnesota.

A Piece of the Vacation Real Estate Pie: Top 3 Take-Aways from Fractional Summit 2010

Fractional Summit 2010 recently wrapped its annual delegation of the biggest and brightest stars in the international fractional industry. What were the key take-aways from the event?

1. Fractionals are resilient in the current market. We’ve been saying it all along. Fractionals, or shared ownership opportunities (as we prefer to call them), are “the smart buy” when it comes to purchasing luxury vacation properties in today’s real estate climate. Rather than hassling with the headaches of typical home ownership, the affluent can own a piece of the ocean, a slice of the good life in wine country, or a share of the mountain. It’s due to the fact that “fractionals have win-win appeal as both a lifestyle buy and an investment"; while Piers Brown, founder of the UK’s Fractional Life, noted: “Despite the economic slowdown, there are green shoots starting to appear and a week doesn’t seem to pass without Fractional Life featuring news of a fractional real estate launch somewhere in the world.” Where Piers sees green shoots, we see the glimmer of élan… but we both agree that the future looks bright.

2. Fractionals have high levels of consumer satisfaction. The delegation also found that fractional owners in a variety of price points are happy with their investment. It’s easy to see why. When you look at the offerings at fractional private residence clubs such as The Élan Collection, owner-members will have more than their fair share of benefits (forgive the pun): luxury amenities, services, affordability, flexibility, reduced running costs, stress-free management and the potential for capital appreciation.

3. Fractionals are a natural upgrade from a timeshare. Fractionals often get compared to timeshares, but they exist in a league all their own, says Stan Tonkin, Vice President of International Marketing and Sales for The Élan Collection. “Shared ownership private residence clubs like The Élan Collection offer a rare opportunity to own a luxury vacation residence for a fraction of the price,” he said. “It’s vacation home ownership at its best.” According to the delegation, shared ownership "is a viable solution to second home ownership as it fills the gap between timeshare and whole ownership. As Bryan Lunt, Chairman of the Absolute World Group of Companies, commented during Fractional Summit, “Fractionals have lower management fees, more benefits and feel like more of an asset.”

What do you think of the Fractional Summit panel’s findings? Are you seeing more enthusiasm for shared opportunities verses whole ownership opportunities? Are affluent clients embracing the fractional concept in your market?

Fractional Sales More Than The Whole

Last week, Stan Tonkin, Vice President of International Marketing and Sales of The Elan Collection, shared some good news and sales data about luxury high-end shared ownership or fractional homes with our residential specialists. For the first time in 2009, luxury fractionals in Pitkin County, Colorado (where Aspen is located) actually surpassed high-end luxury home sales by a 20 percent margin. See the full story in the Aspen Times, here.

"It's an astounding statistic that supports what we've believed all along," notes Tonkin. "Buyers of high-end vacation homes see the benefits of shared-interest ownership. They know that they won't actually use a vacation home for more than four weeks a year. Shared ownership gives them the same realistic use, in a residence that meets their expectations, at a fraction of the cost of whole-ownership."

The Elan Collection is already being received worldwide as a unique and fresh redefinition of the private residence club concept by industry experts, real estate professionals and buyers. New properties continue to be added to the network on a regular basis, with many more to come on line soon... including (TEASER ALERT!) a grand wine-producing estate in Napa Valley and a Mediterranean classic on the famous 17 Mile Drive in Pebble Beach. Keep an eye on the web site www.ElanPRC.com for new residences, as well as our Facebook Fan Page and Twitter profile each week.