0609 nar's webinar: bridge to the fractional world v4

A bridge to the Fractional World for Real Estate Professionals and Developers

National Association of Realtors® International Programs

Aida Turbow GRI, CIPS, TRC, CDEi™ June 10 th , 2009

Historical Background of Shared Ownership. What is Fractional? Why Fractional Ownership? Technology and Internet impact. Comparison with Timeshare. How Benefits Buyers, Developers and Real Estate

Professionals. Questions Frequently Asked. References and Resources.

Outline

After this presentation, participants will be able to:

Become cognizance of one of the fastest growing areas of residential real estate

Know the historical background, current trends and emerging opportunities

Have an awareness of the types of shared ownership.

Identify elements which make a fractional development a success for developers, lenders, and real estate professionals.

Summary & Objectives

• Was inspired by the fractional ownership achieved in the aviation industry.

• An article in National Real Estate Investor, traces the concept of fractional ownership, as a way to hold title to real estate, to the 1800’s.

• Developers of ski resorts, in Colorado, started to offer fractional ownership to unrelated individuals in the early 1990’s.

Fractional Ownership

Historical Background of Shared Ownership


We live in a Fractional World!!

What is Fractional?

Aviation: Aircrafts

Marine: Boat Racing, Yachts

Art Collecting

Equestrian

Applications of Fractional Ownership

What is Fractional?

• Real Property:

Applications of Fractional Ownership

Commercial

Second Homes

Vineyards

What is Fractional?

Global Fractional Ownership in Real Property

What is Fractional?

The Answer…

is…

Property Management!!

What is Fractional?

Change over the same period was about 48.9%.

The Growth!!!Shared Ownership Sector

(in billions $)

2004 2007$0

$500

$1,000

$1,500

$2,000

$2,500$2,298

$1,543

Why Fractional Ownership?

Fractional Ownership: A Global Phenomenon

• Projects in each continent

Africa: South AfricaAmericas: Argentina, Belize, Bermuda, Canada, Costa Rica,

Dominican Republic, Jamaica, MexicoAsia: New Zealand and Thailand Europe: Cyprus, France, Italy, Spain and U.K.Middle East:United Arab Emirates

11


Fractional Ownership is one the fastest growing segments in the Second Home/ Luxury Vacation industry. Benefits:

1. Affordability

2. Diversification 3. Sharing of Benefits/Risks and Responsibility




BENEFIT 1

• A new pricing structure for the fractional product is required.

• A true second home ownership model.


Why Fractional Ownership?BENEFIT 1 …CONTINUE

New Marketing Strategy –New Paradigm

• The marketing objectives have changed.• Old traditional marketing methods no longer work• 99% of today’s marketing must be executed

online

• A sustainable and scalable prospect generation is required. Leads and Prospects are GOLDEN

• Prospects need to experience the product.


Why Fractional Ownership?BENEFIT 2: FRACTIONALS INCREASE CONVERSION

FRACTIONAL OWNERS could access WORLDWIDE EXCHANGE BENEFITS.



FRACTIONAL PROSPECTS INCREASE HEADS IN BEDS & REVENUE GENERATED

BY INCREMENTAL AMENITY USE.

BENEFIT 3: REDUCES MARKETING COSTS


New Scalable Sales Approach

• Scalable technology platform

• Concierge service based • Consultative sales approach

• Thorough training process

• Performance management

New Philosophy

• Turn key solution (…from A to Z)

• A long term partnership

• Experienced management team

http://www.e3fs.com/company/e3-team.html



Technology

We Are Becoming a Single Global Information Society

The Internet has exploded the international marketplace

to more than…. One and a 1/2 billion Internet users around the

world.

Technology and Internet impact

Chart from http://www.internetworldstats.com/stats.htm

21

Timeshare Fractional Ownership

Holders only have the right to use the facilities.

Owners receive a fractional deed or shares in the corporation that owns the property.

Apportioned in units of time, weeks, and for a specific week of the year.

Annualized as a period of time.i.e. 1/4 fraction = 1/4*52 wks =13 wks

Option to exchange vacation weeks, within the home resorts’ portfolio or through an independent exchange company.

Limited but available.

Comparison of Timeshare to Fractional Ownership

Comparison with Timeshare


22

1/2 fraction

50% Ownership50% Responsible for Maintenance and Expenses

Whole Ownership

100% Ownership 100% Responsible for Maintenance and Expenses52 Weeks a Year (property usage)

1/4 fraction

25% Ownership25%

Responsible for Maintenance and Expenses

3/4 fraction

75% Ownership75% Responsible for Maintenance and Expenses

I. Flexibility

II. Location

III. Sensorial Experience

IV. Value

Benefits of Fractional Ownership to Prospective Buyers

How Benefits Buyers, Developers and Real Estate Professionals

Bahía Príncipe Resort & Golf

365 days of sun, beach and peace

Professional golf course Club house and Spa A modern contemporary

architecture concept Mixed use development;

Whole ownership and fractional

6 star concierge service

Courtesy of Grupo Piñero - Bahia Principe, Tulum - Mexico


www.BahiaPrincipe-RE.com


Introducing The Registry Collection®

The Registry Collection® exchange program represents luxury leisure travel at its finest.

Courtesy of Borrego Ranch – Montesoro - California


Questions Frequently Asked

Exchange Programs for Fractional Ownership and Destination Clubs http://www.preferredresidences.com/index.html http://www.destinationclub.com/home.php http://www.theregistrycollection.com/

Fractional News http://www.quintessentiallyestates.com/ http://www.homesoverseas.co.uk/ http://www.hvs.com/ http://www.fractionallife.com/ http://www.opp.org.uk/index.asp http://www.fractionallife.com/fractional_boats_yachts_listings.asp http://www.fractionaljetownership.com/ http://www.fractionallife.com/fractional_private_clubs.asp

Fractional Ownership Resources

References and Resources

Fractional Ownership Resources

Outstanding Destinations http://www.castellodicasole.com http://www.theorchardatcarneros.com/orchard/ http://www.golfingfractions.com/ http://www.aquapura-villas.com/ezine-eng/index.html http://www.bahiaprincipe-re.com/ http://www.lasolas-foundersclub.com/

World Class Consultants http://www.ragatzassociates.com/ http://www.timbersresorts.com/fractional-r http://www.fractional.net/ http://www.fractionalownership.co.za/consult.php http://www.e3fs.com/company/e3-team.html

References and Resources

Special Collaborations for this presentation

Research materials: Jorge Cantero, GRI, CIPS, TRC

and

For more information or a copy of this Presentation please contact: [email protected] or [email protected]

Thank You!Obrigado …

Gracias!谢谢 danke

ありがと

mailto:[email protected]

mailto:[email protected]