Real Estate News

Sharing Their Space

Shared ownership may be poised to have its time in the sun, real estate industryexperts predict. As the economy recovers, timeshares, vacation anddestination clubs and other fractional private residence clubs are trendingto rebound more rapidly and strongly than whole-ownership second homes, accordingto data recently released by industry research firm Ragatz Associates.

the Hilton Head Island area since the late 1970s.A recent survey by the Hilton Head Island-BlufftonChamber of Commerce's Visitor & Convention Bureaushows 25 percent of vacationers to the area stayin some sort of fractional ownership property.

Ragatz, an Oregon-based international consultingand research firm, specializes in following resortproperties. The firm recently surveyed about 300shared ownership projects around the world andconcluded that affordability combined with an increasingconsumer desire for convenience and flexibilityare making fractional projects more attractive.

"We anticipate shared ownership to experiencesignificant growth as the national economy recovers,"said Michael Burns, president and CEO ofPrivate Residence Resorts of Seattle, whose firmspecializes in the development and marketing offractional ownership resorts. He is a consultant toThe Sanctuary at Hampton Lake. The local residenceclub recently re-structured its residences andpricing to conform with new customer research.

ATTRACTIVE PRICINGIndustry research shows that most vacation homesare owner-occupied only three to six weeks of theyear. Burns encourages prospective buyers to comparethe costs of owning and maintaining a comparablesecond home with that of fractional ownershipat a residence club such as The Sanctuary, where thefurnished, three-bedroom, three-bathroom lakesidehouses start at about $150,000 each. Owners have aguarantee of at least six weeks of vacation time.

"The true value of the fractional product speaksfor itself," he said.

Hampton Lake president Gerritt Albert said theno-maintanence convenience of fractional ownershipis attractive to many buyers who enjoy having"a vacation getaway home without the price tag orthe hassles of whole ownership."

Equity Estates Fund is a boutique investment fundwhich offers luxury properties on Hilton Head Islandand abroad. The company's president, PhilipMekelburg, often recommends fractional ownershipprojects to clients.

"Even high net worth families who can afford tobuy a million dollar vacation home are finding itpreferable to share this way," he said.

ABILITY TO SWAPOwners consider the flexibility to exchange theirtime for weeks at other locations an important factor.Hilton Head is one of the most sought-after locationswithin Marriott's Vacation Club program, which recentlyconverted its developments to a points system.Marriott has four timeshare projects on Hilton HeadIsland, and the new points system allows owners tomore easily swap weeks and destinations with ownersin other locations, company representatives say.According to Ed Kinney, Marriott Vacation Clubvice president, Marriott's new program gives a "lumpof points" for which the owners can tailor upcomingvacations to include other Marriott TimeshareResorts as well as Marriott branded hotels, cruisesand an assortment of 2,500 other global resorts associatedwith an affiliated resort company."The idea of exchange is significant to the purchasedecision by most buyers even if they don'tend up choosing to swap," Burns said.The Sanctuary at Hampton Lake has partneredwith The Registry Collection, which offers ownershipexchange opportunities at about 200 resorts onfive different continents.AMENITIESThe Ragatz Study also said 83 percent of fractionalowners expressed that having an array of on-siteamenities were important in their purchase decision,so it is no surprise that the area's top propertiesare stellar resorts with beautiful pools, accessto golf and tennis, fitness facilities, concierge servicesand clubhouse amenities.On Hilton Head, Disney's Vacation Club ShelterCove location, which has two pools, children'sactivities and family entertainment year round, issold out, but resales are available.Likewise, owners at The Sanctuary enjoy anaward-winning aquatic park and lakefront amenities,including fresh water bass fishing, kayakingand canoeing. Membership privileges also includeplay at the championship Pete Dye golf course inHampton Hall.Disney Vacation Club and Marriott VacationClub are both timeshare products, and The Sanctuaryis categorized as fractional ownership. Thedifference is that while all three projects comeunder the umbrella of "shared ownership," a timeshare is more of a prepaid vacation production thatmay or may not come with deed and title to thereal estate.In contrast, fractional ownership is presented asan alternative to owning real estate in a locationthat one visits on a regular basis. Members receivea real estate deed.