September 2010 Blog

Just back from England. Among the meetings I had: Nick Turner of Registry Collection, Piers Brown of Fractional Life and James Dawson former operating officer of Premier Resorts.

England is in the trough as is the US, so very little action. But, a couple of bright spots: Pier's Miami conference was very well attended especially with delegates from the Caribbean and Central and South America. He has a Middle East conference coming up in November, so that participation will be interesting to follow. Lastly, Piers has his annual London-based conference in February and his numbers will be key to addressing the economic revival 'over there'.

Nick Turner's approach is to go out and bring the message to the market; country-by-country beginning December in Ireland and then in 2011 in Portugal, Spain and Italy plus other countries. These daylong meetings will feature a primer on fractions in the AM and then face to face contacts with practitioners in the afternoon. This is a kick-start for the local developers to get going with their planned projects.

From the trenches, so to speak, James Dawson is laying low [he bought a country inn in Wales] until he sees movement in the marketplace. One of his past sales execs is still doing very well working the high-income folk to buy sun-country homes at the current lower prices. His concern, as well as others, as well as us here in the US, is with prices for second homes; will they go lower than they now are?

Back here in America I am awaiting the mid-term elections, which will dictate the 2011 market. If the Republicans win back one of the Houses of Congress then I expect the market to open up a bit as there will be gridlock which we love to hate.

Progress on our deals? Slow but sure. We continue to be buffeted by buyers offering low-ball prices for our fractions. As those of us in the business for some time know this just did not happen 'back in the day'. Now, it's a free-for-all. The buyer expects to offer and get a price break not necessarily taking into account the inherent price break in the fraction itself.

So, Whitefish moves along. Interesting that Canadians, long-time buyers of Montana real estate, are now lecturing us on how lousy our economy is being managed compared to theirs as a reason for not buying.

At Dye Villas we are making sales while ramping up our marketing programs and our mini-vac lead generation programs. No home run numbers yet, but if there is any market in the Southeast we'll get it at Dye; the product, amenities and pricing are just too good for the buyer not to act -- if our sales team correctly handles the buyer.

ULI's semi annual meeting coming up in a few weeks, so more reports from the front line. And, keep a lookout for the Kelsey-Norden research report on buyers and non-buyers that they will be shortly previewing…I head it got some really good info in it.

July 2010

Pushing the economy uphill? We are trying it again after our start at the Whitefish Lake Residence Club a year ago. That gamble turned out pretty well. The market did not bang down the doors, but we made enough headway to keep going, and anticipate a very good summer.

Now we are re-launching Dye Villas, Barefoot Resort, Myrtle Beach SC.

Myrtle Beach you say? You say very middle class, so what kind of fractional location is that for a PRC? Well I went from an $8.50 excellent clubhouse sandwich to a $42.50 filet mignon on successive nights. So there! Pay your price and pick your enjoyment. Our market research shows that there's lots of money on the Grand Strand.

Barefoot Resort has four golf courses, three rated in the top 100 in the USA: Dye, Love, Fazio and Norman plus 110 retail shops, 10 restaurants and three big time attractions. Over 130,000 rounds played a year. Definitely hot stuff!

Dye Villas, purpose built three bed/three full bath condos, at the Dye Clubhouse. Owners get full golf memberships at all four courses whether in residence or not. Hot stuff!

Before the financial collapse Dye was 50% sold on a 1/6th basis. Now, we have both 1/12 and 1/6 interests to sell, and we're going at it.

Hart Rist, major fractional pro is our project and sales director, which grounds us big time. Our team has activated: Ron Frank for the SRG University sales education, Mac MacEwan for all marketing and lead generation, Scott Tracy for escrow, admin and legal and Bob Wengel for overall project leadership.

So are we concerned about the results of the Wall Street Journal/NBC poll out at this writing? Sure, but never shy we are moving ahead… big time!

April 2010

It's the week after the Ragatz Conference, which had a smaller attendance than in the past, but it made networking all the better. Surprisingly for me there were some quality deals there. Here are my top line impressions:

1. No bank money now and probably not 'till well into 2011, so go the private capital route. The banks are still whipsawed between what the White House says to do and what the FDIC examiners demand not to be done = lend money.

2. Take out the bottom-feeders and there are few buyers. A handful of projects report decent sales volume, but I question that in light of our experiences.

3. Broad agreement that buyer motivations have changed, and for the foreseeable future, too. More cautious, value and quality oriented and as usual the Harrison Group gave a very interesting report.

4. Discussions about cutting prices, and for those who do the length of time it will take to raise them back up to pre-financial collapse levels vs. using other incentives. Will the prices ever get back to yesterday's levels?

5. Conversions from whole units to fractions got a broad 'thumbs down' due to the innumerable hurdles involved.

6. Still no success with the conversion of single-family homes to fractions.

7. Some thought that fractions will become a points-based product.

8. Rental income is a necessity today for owners.

9. Star is the only full service company of its kind still in business today.

March '10 Blog

Signs of life out there? It seems so. The phones are ringing, development partners are talking, are the banks lending? Well, two out of three isn't bad compared to 2009.

Ragatz conference is upcoming next week; chock filled with lawyers and suppliers and woefully short of marketers and developers - a sign of the times. We'll be there.

ARDA last week - many upbeat, but the timeshare business has really been decimated. And, with fewer new sales and more defaults it brings back the scary scenario of a tidal wave of resales swamping developer sales. Far too long has this issued been ignored.

ULI coming in three weeks where the meeting landscape will be littered with stalled deals and deals gone back to lenders and underfunded HOAs. Those will probably be the common topics…how and when a workout occurs.

Consumer uncertainty has been the largest impediment to buyers, other than bottom feeders, coming back into the market. One part of that uncertainty the House of Representatives took care of last Sunday with their vote on the health. Like the higher taxes or not, worry about available quality medicine aside at least one, large social issue has been decided. Energy is next.

Once that has been decided, and we have the November election buyers will come back. I predict that the winter season 2010-11 will be terrific. Like the social policy or not, like the higher taxes or not, like who controls Congress; at least those who wanted 'change' have it, and we all need to get on with our businesses.

Our Whitefish MT project continues to chug along. We are looking at moving into two other, major deals. So, count Star with the glass half full crowd…at least maybe filling to the half level.