|
Are You Right for Fractional
Sales? Fractional Ownership has
captured the attention of discriminating people all over America.
Ragatz Associates, of Eugene Oregon, reports that this unique sector
of the resort development industry has steadily increased from 6
projects in 1996 to 264 Fractional and Private Residences and 21
Destination Clubs in 2006. Sales volume has grown from $160 million
in 1996 to $2.1 billion in 2006.
Breakdown of Sales, Price and Product for 2006:
-
Sales for 2006 -
$2.1 billion total
-
$473 million
Fractional
-
$1.1 billion
Private Residence Clubs
-
$576 million
Destination Clubs
-
Price
-
Fractional -
$163,000 per share; $25,000 per week; $631 square foot
-
Private
Residence Clubs - $248,000 per share; $70,000 per week; $1803
square foot
-
Destination
Clubs - $405,000 per share; $2.7 million per house; 3,700 square
feet
-
As of 2006,
there are about 5,000 members in the 21 clubs surveyed
-
Fractional
Product
-
Average size
of development is 40 units
-
Average size
of unit is 1,710 square feet
-
Average size
of fraction is 1/10 and 1/4
-
Average size
of private residence club is 1/10 and 1/8
The
Four Categories of Fractional Ownership
As defined by Richard Ragatz
Traditional Fractional Interests (TFIs)
Product selling for less than $500 per square foot. These are
usually resort homes of average quality, in regional resort areas,
with typical resort amenities and services. Often characterized as
at the “three star” level of quality.
|
High-End Fractional Interests (HFIs)
Product selling for $500 to $999 per square foot. This product
represents a step up from the preceding category, typically due to
some combination of more desirable location, lower density, larger
unit size, higher construction and furnishings quality, or
additional amenities or services. Often characterized as “four
star” quality. This product has attained the trappings of a true
industry within the past five to ten years.
Private Residence Clubs (PRCs) Product
selling for $1,000 or more per square foot. These represent the
pinnacle of quality – not just among fractional interest projects
but in comparison with virtually any resort accommodations available
– due to a combination of locations in the top tier of resort
destinations on prime sites, extraordinary architecture and design,
and the highest levels of services and amenities. “Five star”
quality in every way. As HFIs, this product has attained the
trappings of a true industry within the past five to ten years.
Destination Clubs (DCs) This product
differs from the above three in that they are based on selling
deeded real estate in a particular resort home or development while
Destination Clubs involve selling memberships in an equity or
non-equity club. Membership allows access to a network of resort
homes in a variety of locations.
To Learn More About
Fractional Ownership, Click on the articles below:
|
